Referrals often drive the best client acquisitions, especially in the legal industry. But if you aren’t leveraging B2B referrals, you’re missing some key benefits this powerful client acquisition technique has to offer.
Here’s a quick lesson on B2B referrals: Say you’re a law firm specializing in mass tort cases. This quarter, you suddenly have more mass tort client prospects looking for representation than you can handle. You don’t want to just ignore these individuals, so you turn instead to Mass Tort Firm B down the road. There, you offer to refer them 20 new leads you can’t serve for a finder’s fee or mutual referral agreement. A B2B referral program lets you offer any overflow leads to nearby firms serving the same practice areas for a set price.
As you can imagine, B2B referrals are extremely valuable and play a role in any successful firm’s client acquisition plan. However, establishing friendly relationships with other local law firms specializing in the same practice areas usually isn’t enough. You need to have formalized agreements in place to leverage a significant marketing tool like B2B referrals for your firm.
Top Three Reasons Why Successful Law Firms Use B2B Referrals
What makes B2B referrals so powerful compared to affiliate marketing leads? Here are three reasons firms should consider adding B2B referrals into this quarter’s marketing strategy:
Reason #1: More Consumers Now Actively Seek B2B Referrals for Legal Services, Which Improves Overall Quality
Affiliate marketing was all the rage for many years, but this tactic has its issues — especially for the legal industry. Affiliates get paid a fee for every lead they sell, so sometimes, these third-party vendors sacrifice quality for volume. In affiliate marketing, you have no idea whether leads are seriously looking to hire an attorney or not. An affiliate can purchase email address lists online for pennies on the dollar, mark them up, and re-sell them to you. Without quality standards in place, you could waste valuable marketing dollars buying unqualified leads that your firm’s intake staff cannot convert.
B2B referrals are superior quality because the motivation behind them’s based on a mutually beneficial relationship between industry professionals. Your firm and others participating in your B2B referrals program wish to see that prospective clients’ legal needs get met. In most cases, B2B referrals come to you pre-qualified, making the lead intake process faster and easier than ever before. According to Clio’s 2017 Legal Trends Report, 31% of consumers looking to hire legal representation were referrals from another lawyer:
Reason #2: B2B Referrals Have Higher Conversion Rates and Lower Acquisition Costs
B2B referrals also, and perhaps more importantly, offer significantly more lifetime value than leads sourced through affiliate sites. The Wharton School of Business reports a 16% higher lifetime value for referred leads than clients acquired through other methods. The 2017 Clio report shows a staggering 94% of firms don’t know how much it costs to acquire new clients.
If you want to grow your firm’s revenue or scale up into new practice areas this year, don’t dump more money into your ad spend! Instead, calculate your current lead conversion rate: divide total clients retained by your total leads generated, then multiply by 100. If you needed 1,000 leads to generate 100 retainers, then your overall lead conversion rate is 10%. Next, break that conversion rate down for each marketing channel. How many retainers are you getting from billboards? How many from newspaper ads? Social media? Find where your money’s going first and how it performs, then look at which channels have the highest conversion rates. We think you’ll find B2B referrals at the top — or pretty close to it.
Reason #3: B2B Referrals Have a Shorter Closing Cycle
Leads are often pre-qualified because they’re just overflow that the referring firm simply cannot represent. These leads are ready to convert and already meet most firms’ standard screening criteria. Similar firms sending you referrals are good matchmakers charging comparable fees, so close-ready clients already know what to expect. Because these referrals are good matches, you’ll only have to complete the last few steps of the lead intake process.
As profit margins tighten, B2B referrals could keep your business profitable without cutting essential staff or services. According to research from Influitive and Heinz Marketing, 86% of firms with formalized B2B referral agreements recently experienced revenue growth. Compare that to just 75% of firms growing revenue without using B2B referral programs over the same two-year period.
An Amplifinity report shows that B2B referrals definitely stand out compared to leads generated through standard marketing methods. Three out of 4 B2B buyers engage their peers on buying decisions, and 80% of buying decisions rely on direct experience or peer influence.
So what are you waiting for? Now’s the time to see if switching from affiliate marketing to B2B referrals can boost your firm’s revenue growth.
Get Close-Ready Leads Delivered In Real-Time
With the right partner focused on sourcing quality prospects, you’ll get new, local and pre-screened leads delivered directly to you. LeadingResponse has a reputation built on decades of success in the client acquisition industry. With a full-service marketing agency working hard to bring you new clients, you can focus on increasing billable hours instead.
Not sure how well your leads are converting? Use our free, secure Lead Management System (LMS) software to score prospects for quality. Still haven’t figured out how to market your services to Millenials? According to the 2017 Clio Legal Trends Report, 30% of Millenials prefer using technology to share legal documents with their lawyers. Our free and secure LMS software allows you to share and sign eRetainers directly through your web browser. You can also use the LMS to communicate with clients via text or send emails, which 19% of Millenials prefer to in-person meetings or phone calls.
Track each lead as they come in to identify any pain points in your lead intake process. Don’t have a dedicated intake team handling your conversions, or ready to scale your business up quickly on a budget? Put our U.S.-based call center agents to work cold-calling leads for you 24/7! After all, an InsideSales.com study shows you’re 21x more likely to convert leads when you call in the first five minutes:
Our agents call every new lead six times, and initial calls happen in six minutes or less. Currently, our agents boast a 70% contact rate and handle eRetainers as well as live transfers.
Interested in learning what LeadingResponse can do for your firm? Contact us with your questions, and the right person will get back to you within one business day.