Recently, I had the chance to sit in on a webinar with Kevin McKeown of LexBlog and Lee Frederiksen of Hinge Marketing, as they discussed the topic of blogging for clients, focusing on how online relationships can lead to real-world clients.
Since this is a meaty topic, I'll be breaking this up into multiple posts.
The speakers started by letting us know what the planned to cover in the webinar:
- The economic case for online marketing
- How trust is developed online
- Developing your strategy and tools
- Implementing your plan
Lee said he would be drawing on research from a recently published study done by Hinge of 500 professional services firms. The firms averaged 319 employees and $53,929,835 in revenue, but they also included two important analyses - they also looked at high-growth firms (those growing 20% or more per year on a compound basis) as well as experts in online marketing (those top of the field with regard to specific techniques).
Economic Case for Online Marketing
Lee showed a graph which looked at the rate of growth of a firm against the proportion of the leads that they generate online:
- 0% leads generated online: 15% growth (over a two year period)
- 1-19% leads generated online: 20% growth
- 20-39% leads generated online: 33.3% growth
- 40-59% leads generated online: 63.9% growth
- 60-79% leads generated online: 53.8% growth
- 80-100% leads generated online: 60.7% growth
The graph shows that the slowest growing firms are those who do not generate any leads online, followed by those who generate a few leads. About 40% of leads generated online is where you get a big jump in the growth rate - those getting between 40-60% of their leads online, actually grow the fastest of all of the firms. Lee said this shows that online marketing is accelerating the overall growth of the firms, and not just marketing growth, but overall growth.
While growth is important, they also looked at the measure of the profitability, and found a somewhat parallel result:
- 0% leads generated online: 15.0% (profitability as a percentage of gross revenue)
- 1-19% leads generated online: 14.0%
- 20-39% leads generated online: 20.0%
- 40-59% leads generated online: 25.0%
- 60-79% leads generated online: 30.0%
- 80-100% leads generated online: 32.5%
This graph revealed that if a company generates a few leads online, up to about 20%, it doesn't impact profitability much either way. However, once they start to get above that, you see an increase in profitability. When they're at the 60-80% mark of leads generated online, they're almost twice as profitable as those who are generating under 20% of their leads online.
It's clear that this has a big impact on growth and profitability. Lee said that what's going on here is that it takes a certain level of online lead generation to really see the true benefit. It will impact a company's growth a little right away, but it takes a bit more to impact profitability. This may be because online lead generation is cheaper than other forms of lead generation, but there are also other things impacting it, such as the added focus an online approach can give a company.
Kevin added that this type of research supports what he would be talking about next - his statistics were sourced from Greenfield Belser, American Lawyer Media Legal Intelligence, Inside Counsel, Greentarget and Zeughauser. His key statistic was:
78% of Executive-level buyers go online to search for outside legal accounting & consulting professionals" -- Greenfield Belser
As an example, Kevin talked about Dan Schwartz, a relatively young lawyer out of Connecticut, who runs the Connecticut Law Blog. Dan has taken the time to join conversations, and build and create a strong online identity. He is now seen as an expert to such a degree that Sixty Minutes has asked him to be background on their employment stories. He's top of mind with CEOs and the C-suite, and those are the influencers who decide who they're going to hire.
From a law perspective, Kevin said that we know, based on the research from American Lawyer that:
40% of legal professionals surveyed said that blogging and social networking initiatives have already helped their firms bring in new work." -- ALM Legal Intelligence
Kevin used Peter Mahler as an example - he's been blogging for two or three years, and Kevin speaks with him once a quarter. He's been averaging one new client a month, and signed his largest client to-date because of the way that he's cultivated his online identity.
55% of in-house counsel say a law firm's blog influences hiring decisions." -- Inside Counsel, Zeughauser, Greentarget
In-house counsel may be quiet online, but it doesn't mean that they're not watching what lawyers are doing. This number grew from 50% the previous year, so the trend is up. Kevin said that Dave Donoghue of Holland & Knight illustrates this - he's blogging on complex IP litigation and has secured just shy of $2 million in revenue in the last two years. More importantly, he secures high complex IP work by the way that he blogs.
84% of in-house counsel perceive law blogs as credible." -- Inside Counsel, Zeughauser, Greentarget
Kevin noted that this statistic is interesting because it asked about law blogs - not journalist's blogs. These statistics support what Lee talked about and make the case that professional services firms need to start to dip their toes into social media.
Lee then pulled up a poll for the webinar audience to get a sense of what proportion of their marketing budgets are devoted to online tactics, meaning blogging, social media, content marketing, SEO, etc. The results were:
- 0-1% of budget: 15%
- 2-20%: 54%
- 21-40%: 12%
- 41-60%: 5%
- 61% +: 14%
Lee noted that it was interesting that there was almost an equal percentage of those spending 0-1% of their budget and those spending 61% or more.
He said that one of the things that they're seeing is a big shift towards recognizing the importance of the online, evidenced by the overwhelming response to this webinar. Kevin agreed.
The New Buyer
Next, Lee and Kevin moved on to talk about the "New Buyer" - who is this person who is engaged online?
Lee said that one of the things that they know is driving some of this is the change in the generations. Anyone in the workplace for less than 10-15 years has grown up digitally, and doesn't think too much about this being new or special. He said that they were recently recruiting for a position, and they were surprised that few people mentioned anything about social media expertise on their resumes. However, when they asked them about it in the interviews, they had it - but they don't think to include it anymore than they would include knowing how to answer the telephone. It's expected and assumed that you're online and active in some form of social media.
This view has led to the concept of a "free education" - the idea that you should be able to learn about a topic or solve a problem by going online and pulling down free information. This creates an expectation that people can learn about your firm and what you do without having to retain you, and if you're not providing that sort of information and transparency, someone else will be doing it.
There's also the added time pressure - online has created a much faster way to gain information or find a service provider than going to your friends for referrals and recommendations. Lee said that he'd come across a statistic about the proportion of people who have ruled out a professional services firm because of their online presence, and it's greater than 50%.
As the web isn't sensitive to time, it's also not sensitive to geography - people are more likely to pick people based on who they are and what they can do for them rather than where they are located. This will put a lot of pressure on the local orientation of a lot of firms, and this transition will only accelerate.
Kevin agreed, and said that 50% of the world's population is under the age of 30, which should be a wake-up call for firm leaders - they're using online tools and social media, and they're going to be firms' future clients.
Developing Trust Online
Lee said that there are two models for developing trust, and in the real world, these models are becoming more interchangeable and combining. The first is the traditional model:
Traditional Model of Trust
- You meet someone
- You develop a relationship
- They trust you
- You get a new client
The second is the new model:
New Model of Trust
- Someone finds you for a reason
- Your work is helpful and valuable
- They trust you
- You get a new client
This new model online usually starts with someone coming across something you've written or commented on that is of interest to them. They begin to follow your work and take advantage of the information that you're sharing, and that is the avenue by which they develop trust in you.
Lee said that they had gotten a call from a firm that was less than two miles away from them, whos said they'd been following their stuff for a while and wanted them to submit an RFP for a rebranding. While Hinge doesn't often do this, they decided to, and some time went by before the firm responded, saying that they wanted to secure them for the work. They never met with them, but said that they knew their approach already. The world is changing - people are developing trust in other ways besides being face to face with someone.
Kevin agreed, and said that LexBlog has also signed clients around the world who have done all of their research online to find them. On the topic of the new model of trust, he said that it doesn't matter what the medium is - at the end of the day, there is a deep human need to trust who you do business with. So he said it's necessary to be authentic in your dealings - in the business of relationships, trust is the fuel. You only establish trust if you're yourself and show an interest in the other person.
Kevin then presented a model from Edelman, a visual that illustrated what online activity is all about, breaking it down into "owned," "paid," and "earned." He said that "earned" is the most important, because that's the way you establish trust and demonstrate expertise and passion.
Lee showed one last chart in this section, with some data on the relative effectiveness of different online tools. In the chart, the lefthand side offered the list of tools - search engine optimization, web analytics, blogging, usability testing, white papers & eBooks, email marketing, LinkedIn, Twitter, webinars, company newsletters, pay-per-click, online video, YouTube, Facebook and banner ads.
The graph was then broken down by the perception of relative effectiveness by average growth companies, high growth companies, and experts. The average growth companies' ratings tended to be lower than the other two groups - they're seeing the least overall effectiveness in these various techniques.
High growth firms, which also tend to be the most profitable, found more effectiveness in each of the online tools, and some quite a bit more effective. For example, when we look at blogging, it's considered almost twice as effective by high growth firms than average growth firms.
With other measures, however, there wasn't a great deal of difference, such as with the company newsletter. This is a pretty well-developed technique and neither high-growth or average growth firms see it that much differently.
Lee then talked about the experts thoughts, and what they noticed is that experts are finding opportunities in many of these techniques, though not all. For example, high growth firms are finding more effectiveness than the professionals expected there to be in Facebook for professional services firms. Lee said that they've talked to many of these firms, and some of their success is in the recruiting arena. Some firms also have marketplaces that are on Facebook, but not LinkedIn, such as not-for-profits.
But by and large, you see a three step thing where the average firms see one level of effectiveness or usefulness, the high growth firms are finding more, and the most by the experts. That tells Lee that even if you're a high growth firm, and you're doing some things well, there might be more to that technique that you can apply to your situation.
Kevin said that his key takeaway from this is that you should look at experts who have a proven track record - professional services firms are full of busy people, so you want to find ways to hit the ground running as quickly as possible. So he suggests giving the right experts with the right track record the chance to help. The right experts will focus on strategy first and tools second.
Tomorrow, we'll dive into developing your strategy and tools and implementing your plan! I highly recommend watching the webinar recording (linked in the very beginning) so that you can see the data properly illustrated.