In April 2020, while we were in the early stages of the COVID-19 work-at-home period, I conducted a market survey via LinkedIn to better understand where new client business originates.
For a long time I had a been working on a hypothesis I called New Client Pathways. From my own experience and observations – and in conversations with lots of successful consultants, financial advisors, marketing specialists, attorneys, accountants, etc. – I had arrived at a rough model of the top pathways that new clients typically arrive.
Furthermore, I believed that there was an inherent hierarchy to the success rate of these client pathways. My hope with launching this market survey was to test this hypothesis with the experiences of many other successful professionals.
While the survey is far from a large-scale academic study, I think the high-level findings are interesting and useful to us in our own efforts to win new client business. The key findings of the survey are:
• Referrals are the most common client pathway
• The leading source of referrals is from your current/former clients
• Inquiries are a close 2nd as the source of new client business
• Inquiries are nearly evenly split between those you already knew and those you didn’t previously know
• Your website is the top source of inquiries from those you didn’t previously know
• Warm prospecting (with someone you know or had an introduction) contributes nearly 2x as many new clients as cold prospecting
Based upon these key findings, I arrived at the following key take-aways as it relates to our own business development efforts:
Takeaway #1: The Importance of “Doing Great Work”
It is hard to separate “doing great work” from one’s success at winning new client business – as demonstrated by the leading client pathway: referrals. We won’t earn repeat business or referrals if we don’t have a reputation for providing high-quality work and service.
Takeaway #2: Given the consumer behavior of prospective clients, referrals and inquiries will have a higher success rate than warm/cold-prospecting
With any research, we have to be careful at confusing correlation with causality. That being said, it is not hard to believe that those interested in our services are more likely to buy than those we are warm/cold-prospecting. If this is true, that begs the question: How do we increase our number of referrals and inquiries? This is the focus of my current research and will be a key topic in my 2nd book, How To Win Client Business.
Takeaway #3: Prospective clients research us online before reaching out
The prevalence of inquiries sourced from firm websites suggest that we should think carefully about what our websites are telling our clients about us. What are clients looking for from our websites? My take is that prospective clients are looking to find out more about our expertise, who our typical clients are, the work we have done for others and for helpful content. Further research and discussion is needed here.
Takeaway #4: Most of us have a dominant pathway for winning new business
There are those of us who tend to rely on referrals/inquiries for our new clients. For others, warm/cold prospecting is where our business originates. Some businesses lend themselves to referrals and inquiries. For others, warm/cold-prospecting is the more dominant pathway to new business.
Much more work needs to be done, and that is the focus of the next phase of my research. I welcome your thoughts and feedback.
The results of this survey are available for download in PDF format.