On Referral Partnerships
Why is effectiveness not leading marketing strategy?
Last year's BenchPress report with benchmarks for consulting businesses showed that 41% of their new clients come from referrals. This is not surprising for us in the industry. The biggest insight for me is confirming what's in the second place, and how consultants look at it.
When asked, "Other than referrals, what are the most effective ways of picking up new clients?", the top 3 answers were:
- Strategic alliances with referral partners (21%);
- Networking (18%);
- Organizing your own content event (12%).
One can argue that strategic partnerships leading to referrals should still be counted as "referrals". But that's not the point here. If these alliances are that effective to activate pipeline, you would imagine many boutique consulting firms are exploring the idea. Right?
It turns out that less than half of the consultancies have tried to implement strategic alliances with referral partners in the 12 months prior to the survey. Most firms have concentrated their marketing efforts on LinkedIn, creating more written content, networking, and email marketing.
Which leads us to the big question: why?
After looking at this question for a while, I believe many things are happening here. Most consultancies might not be aware of this information. The way partners and advisors lead and manage their firms - their strategy, operations, and financial capabilities - also plays a role. And the difficulty of creating powerful, win-win commercial partnerships is often not discussed.
In the next couple of days, you can expect more posts about it. I want not only to share what I've learned from advising boutique firms, but also to explore blind spots and new perspectives when looking at partnerships.
If you have had any experience with using strategic alliances with referral partners as a sales channel, feel free to reach out and share your thoughts on it.