Let’s start with the punchline:
Way too many marketers who work for wonderful referral-based businesses in the offline world, fail when they try to drive new customer businesses online.
What do I mean by this?
When you talk with the owners/founders/executives at many great companies, they will eagerly tell you that their best business comes from the networks that they’ve built up over the years. I’d argue that these include the majority of B2B businesses, including most financial institutions, legal firms, real estate brokerages, etc.
These people at these companies know that they live by referral business.
But for whatever reason, when they start doing online marketing, the let their marketers go into data-driven analytical mode with a laser-like focus on attracting their next client (“acquisition marketing”) instead of using their website/content/social to appeal to the people who are already inclined to work with them (“referral marketing”).
Luxury Real Estate Example
A few weeks ago, I was asked to give a presentation in Miami to some of the top luxury real estate brokers in the world on how they should be using social media. The 50+ brokers who attended are regularly helping billionaires and other extremely high-worth clients buy properties in excess of $10M in places like Malibu, Beverly Hills, the Hamptons, Manhattan, Monaco and Miami.
In putting together the presentation, I took the chance to review every one of their websites and social presence and the thing that stuck out for me was how so many of the sites were focused on driving inbound leads through SEO.
Almost all of the brokers who had websites included:
- CTAs (Call-to-actions) all over the site
- Landing pages for every neighborhood in their service area
- Big beautiful homes featured along site home search functionality
All best practices for real estate agents in today’s hyper competitive world, right?
Except I asked how many of the luxury brokers in the audience were happy with the leads that came through their website and almost nobody raised their hand.
Of course, almost none of the luxury brokers were happy with the results from their websites.
And why should the be. People who register for a home search in Malibu or Miami are already always lookie loos. They’re just noise. They’re a nuisance for these brokers who want to deal exclusively with high net worth individuals.
High net worth individuals are rarely, if ever, googling “miami real estate broker” to find their agent. Instead, they’re asking friends, lawyers, business partners, etc. who they would recommend.
But here’s where it gets interesting.
Those same high wealth individuals are using google. Once they have a recommendation, I’d argue that the vast majority will Google the broker’s name to see if that person really is credible.
In other words, the luxury broker’s website has an AWESOME opportunity to convert the exact kind of clients they want. Done right, their website should ooze credibility.
Essentially, their website should scream:
“I am the dominant luxury broker in this market. If you’re a high-worth clients looking to buy a luxury home, you’ll be safe working with me. Even better, I have access to exclusive information, reports, pocket listings, etc. and a top-notch team that mean you simply won’t be able to get our level of service from anyone else in the market.”
Instead, the vast majority of the luxury agent websites were:
- Featured the same content (property listings and lots of landing pages for every neighborhood in the area) that any agent with access to the MLS could replicate
- Often only gave lip-service to the broker since, presumably, they’ve been told that people are only interested in home search and they need to get them there quickly.
What if instead of trying to attract leads, the agents homepage was designed to give confirmation to the high net worth client that they were working with the right person?
That’s the assumption I made when putting together this presentation for that Miami event:
In summary, the great luxury real estate agents drive their business from referrals and they know it…. and yet, when they market online, they inevitably become convinced they need to adopt new customer acquisition strategies that often don’t even have a place in their business model.
Crazy… and it doesn’t have to be that way.
Air Cover for Sales
However, far from being exclusive to luxury real estate, I’ve seen this assumption from startup founders and enterprise executives who will readily admit that the majority of their business comes from referral sources, but put all their online marketing efforts into driving inbound leads.
The example I used in the presentation to illustrate this was from the financial services space by comparing the websites of Goldman Sachs and e-trade.
- E-trade is loaded with CTAs and clearly looking for every lead they can get
- Goldman Sachs has no lead capture form (at least none I could find)
Goldman Sachs uses their website to build credibility with people who are already inclined to work with them.
In other words, the Goldman Sachs website is being used to provide air cover for sales and this is a super important role. The people doing marketing at Goldman Sachs know someone who is thinking of doing business with them is going to look at their website… The people are going to be comparing working with them vs working with another large financial institution. They want that business, so they have ever incentive to show that they are the dominant player in the space and the best choice for exclusive clients.
I love the example Goldman Sachs because it’s so obvious that they don’t even want online leads.
Are you aware of other companies that use their website to build credibility with potential referral partners instead of trying to drive leads?