Some organizations thus have trouble understanding and optimizing their ongoing interaction with referral sources, leading to more guesswork than understanding when it comes to building an firm referral source relationship management strategy.
It is the professional advisors who are most effective in driving demand. These "referral sources" serve the individuals with business problems who need real solutions to their issues. In many cases, they won't show up in pipeline reports or end up as qualified leads, but they are in the lion's share of cases the ones driving the really big deals.
Furthermore, referral sources are far more likely to have many connections in the community. Positive attitudes or recommendations will be amplified, along with negative ones.
Referral Source Engagement and Advocacy: The 'Pipeline' for Relationship Marketing
Two objectives are most important when building relationship marketing strategies:
(1) maximizing ongoing behavioral engagement with referral sources
(2) driving toward advocacy for a firm and its offerings
Engagement can be defined as a "give-and-take conversation" between a referral source and your firm. Advocacy is, simply stated, the willingness to recommend or "go out on a limb" to recommend your firm.
Engagement and advocacy are linked: Proactive engagement of referral sources at the best professional firms and consultants is a fundamental driver of these individuals' perceptions of your brand and their willingness to advocate doing business with your firm.
One could say that the fundamental job of the relationship marketer is to encourage referral source engagement and promote referral source advocacy.
Engagement Drives Advocacy and Value –
Engagement drives advocacy over the long term and that advocacy is the most powerful attitudinal predictor of successful relationship – for both parties.
Generally, it is not outbound marketing, but rather a discussion that takes place over months or years and covers relevant topics that drives deal flow. This engagement ultimately drives referral sources to recommend your company and its solutions in competitive situations and to think of your company first when client financial and investment problems arise.
Examples of engagement include:
- Attendance at hosted face-to-face events such as conferences, roundtables, and seminars;
- Subscriptions to firm-published newsletters, whitepapers, and magazines
- Participation in online activities such as webcasts, virtual meetings, and online communities.
With the framework in place, the following four steps form an outline for a relationship marketer developing an engagement—advocacy—value strategy.
Step 1: Develop an Engagement Mix
An engagement mix is the combination of tactics, content, and targeting to drive referral source advocacy. Events designed explicitly for referral sources have a stronger impact than events designed for more technical audiences. Among referral sources, events with outside strategic content were more effective than events focused solely on a set of offerings or on a specific solutions.
In determining the best mix of engagement vehicles, however, it is important to factor in the cost of hosting various types of activities, and to determine the ROI of the different engagement activities, seeking a balanced and cost effective mix.
Step 2: Integrate Outbound Marketing
Once an engagement mix is defined, an effective contact strategy must be developed to promote engagement. Different outbound marketing touches can be more or less effective in driving engagement depending on audience.
For example, content-rich email is a powerful method for contacting more technically oriented referral sources, while telephone touches can be very effective with generalists.
Referral sources want to talk to someone who can answer their questions, and feel like their relationship is important. A focused campaign by principals, for example, can work wonders after an initial email to drive referral sources to engage.
Step 3: Practice Continuous Contact
Determining the sequence and cadence of outbound tactics and hosted engagement activities is important to campaign success. Since an referral source engagement program can take up to 18 months or more to generate a "win," engagement continuity is imperative. We have found that lapses in active engagement greater than three months are associated with loss of advocacy and lower probability of referrals.
In addition, the sequence of touches and engagement activities should provide content appropriate to and facilitative of a referral sources progression along the advocacy stages.
For example, at early stages, "Seeker" referral sources gain awareness and seek information regarding the company's offerings. Accordingly, "Seekers" should be provided solutions-oriented content to ensure comprehension and understanding of available products. Once referral sources are familiar with the firm's value proposition, strategy-focused interactions should feature more prominently in the mix.
Step 4: Implement Measurement, Tracking, and Analysis Tools
Accurate measurement and tracking of outbound marketing touches, engagement and advocacy, and firm-level sales activity are requirements for developing a rigorous, data-driven approach to understanding and managing relationship marketing. A basic relationship management measurement system will include the following four data sources:
• Outbound RM touches
• Engagement
• Advocacy
• Value
When the various component data sources have been linked and enough historical data has been compiled (a two-year period is usually adequate), it is possible to construct an analytic model connecting the constructs and revealing the dynamic inter-relationships among marketing stimuli, engagement, advocacy, and value.
Conclusion
Relationship marketing has lost its meaning in many organizations. The function, in many cases, has become dominated by a "stimulus-focused" approach that advocates increased contact, whatever the reason or content, in lieu of true engagement. This approach is deeply flawed and distorts the true objective of RM—to generate a conversation that will eventually lead to advocacy among key referral sources.
This advocacy does not manifest itself in weeks or even months, but can take a year or more; and when it bears fruit, it is difficult to measure.
However, this is all the more reason to undertake true relationship marketing, because the advocates it generates are long-lasting and uniquely suited to influence large opportunities that otherwise would go to competitors.
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