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When it comes time to buy, it’s hard to ignore a raving personal recommendation. The most credible form of advertising comes straight from the people we know and trust: our friends, family and colleagues.
But referrals are really only a starting point. To be truly effective, they must be accompanied by a strong, positive online presence. Businesses with poor digital footprints risk losing referred customers before they’ve even had a chance to serve them.
This is more common than you might think. In a Hinge Research Institute study, more than half of respondents ruled out referrals from friends and colleagues before ever speaking with the suggested professional services firm in the first place.
The top-cited reasons for ruling out a referred company all related back to an inadequate or unremarkable online presence: more than a quarter of respondents cited a poor online reputation and nearly as many cited poor quality online content. Almost a third of respondents referenced unimpressive websites, which is unsurprising given that 80 percent of buyers look at a firm’s website to learn more about the business.
The impact of a messy online reputation can be particularly devastating depending on the industry. In healthcare, for instance, 90 percent of patients frequently change their mind about a referral due to the provider’s poor or weak online reputation.
In the restaurant industry, negative reviews are so heavily tied to business success that every one star in a restaurant’s Yelp rating means a five to nine percent increase in revenue.
Negative news articles can have a profound effect on business too, regardless of the industry. Companies risk losing 22 percent of business when potential customers find one negative article on their first page of search results. That number increases to 44 percent lost business with two negative articles and 59 percent with three.
Businesses looking to avoid the potential pitfalls of a lackluster online presence won’t find immunity by remaining offline. In fact, failing to show up online at all is another key reason customers rule out a referred company. Even inactive social media accounts can cause potential customers to change their mind.
If brand building is such a critical part of turning referrals into real business opportunities, how can companies create a compelling digital footprint that avoids serious referral leaks?
Given the damaging impact negative reviews have on a business’s bottom line, fixing review platforms is an obvious first step. Eighty-five percent of people trust online reviews as much as a personal recommendation, so it would be a mistake not to take that seriously.
Most are familiar with the generic customer-facing platforms like Google or Yelp, but don’t forget about industry-specific platforms too, like ZocDoc for doctors or Avvo for lawyers. Even employees have the ability to review and research their own company experiences on platforms like Glassdoor and Indeed.
No matter the platform or the focus, a rating lower than four out of five stars is usually a red flag for interested customers. Businesses that give their happy customers a chance to review the business — and make it as easy as possible — have the best chance of mitigating the impact of sporadic negative reviews.
Assuming reviews are in good shape and trending positively, the next best step is auditing the company’s website. A high quality, well-designed, and active website sends a number of positive social cues to potential customers including legitimacy, tech-savviness, and responsibility.
If a company doesn’t take care of its own website — the logic goes — how much can the business be trusted to take care of their customers?
But it’s not just about first impressions. A corporate website is also one of the first places potential customers go to learn more about what the business offers. Once visitors land on a company's homepage, 86 percent want to see information about that company's products and services.
If that information doesn’t exist, or is presented in a confusing way, potential customers are less likely to understand the value — and less likely to make a purchase.
Other key elements of a strong online presence include an active social media presence, educational or entertaining blog posts, and external credibility in the form of earned media.
In fact, the value of positive brand building is so strong that it can actually lead to additional referrals — even from people who aren’t existing clients.
If that sounds too good to be true, consider this: 81.5 percent of businesses have received a referral from someone who wasn’t a client. The majority of these are expertise-based referrals, where people refer the business simply because they are aware of the business’s specialization in solving a given problem.
The Hinge Research Institute’s Referral Marketing study found that the most common motivations for making an expertise-based referral include hearing an expert speak, reading blog posts or articles they had written, and interacting with them on social media.
By projecting one’s expertise into the market — through speaking engagements, earning external press, publishing thought leadership articles, and the like — it is possible to not only secure existing referrals, but also generate referrals from people that have never experienced your product in the first place.
