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Which Online Marketing Tools Lead to Substantial Growth?

Thursday is guest post day here at Duct Tape Marketing and today’s guest is Lee W. Frederiksen, Ph.D. – Enjoy!

There is a revolution going on in professional services marketing. More and more buyers are going online to learn about possible solutions to their business challenges and find and evaluate potential service providers.

This revolution is already having a major impact on the growth and profitability of professional services firms. My firm recently completed a study of 500 professional services firms and how they used online marketing tools. The results and their implications are described in our new book, Online Marketing for Professional Services.

A Competitive Advantage

The research revealed that the proportion of new business leads generated online had a direct impact on both firm growth and profitability.

Fig1Fig. 1. Online Lead Generation Drives Firm Growth and Profitability

Figure 1 shows that as the proportion of leads generated online increases so does firm growth and profitability. The highest growth rate comes from firms that generate 40-60% of their leads from online sources. Talk about a competitive advantage!

The bottom-line advantages of online marketing are clear and compelling. But where do you start? When you get down to it, what really works?

Evaluating Online Marketing Tools

There is no shortage of opinions about which tools are most effective. But we were interested in results, not rhetoric. So we investigated the effectiveness of 15 of the most common online marketing tools as experienced by three different groups:

  • High Growth Firms — These were the fastest growing and most profitable firms in the study. We were interested in what they were doing differently than their peers.
  • Average Growth Firms — These were the firms that experienced only average growth.
  • Experts — We recruited a panel of 20 top online marketing experts to provide their perspective on the relative effectiveness of the tools. We reasoned that if anyone understood the full potential of the individual tools it would be these folks.

Figure 2 shows the effectiveness ratings for the 15 tools.

Fig2
Fig. 2. Effectiveness Ratings for Experts vs. High Growth vs. Average Growth Firms

A couple of overall findings are clear.

High Growth Firms find almost all the online tools significantly more effective than do their Average Growth peers. And with the exceptions of Facebook and banner ads, the online marketing Experts judged the tools to be more effective than did the High Growth Firms. Perhaps the better you know the tools the better use you can make of them.

Relative Effectiveness of the Tools

Search engine optimization (SEO) is the single most effective online marketing tool in the eyes of both the Experts and the High Growth Firms. SEO is closely followed by web analytics and blogging.

In some ways these top three tools fit together nicely. They provide the content (blogging), the method of attracting visitors (SEO) and a mechanism for evaluating and optimizing the process (website analytics). Notice that the Average Growth Firms largely miss the importance of these core tools.

As we move down the list, we add more analytical tools (usability testing) and more content (white papers, ebooks). In the mid-level of effectiveness we find email marketing and some social media tools such as LinkedIn and Twitter.

Other social media platforms such as Facebook and YouTube rank relatively low in effectiveness for professional services firms. Banner ads were judged least effective by all groups.

What Does This Mean for You?

Understanding these online marketing tools can give you a real edge. Since most firms (the Average Growth group) do not realize the power of some of the techniques such as SEO, blogging and website analytics, you may want to focus your energy first on these tools, which can give you a true competitive advantage.

Just as important, you can avoid investing a lot of resources in tools that do not show as much promise, such as banner ads or Facebook. Does that mean you should never use these tools? Not necessarily, but it does suggest how you might prioritize your efforts.

While your competitors try to generate new clients using less effective techniques, you can focus on those techniques used by the fastest growing firms and favored by the Experts who know the tools best.

Online marketing is changing the face of professional services. Some firms will win more business and earn more profits. Others firms will fall behind and find it harder and harder to attract new clients. With a little knowledge, the choice is yours.

LeePhotoAbout Lee W. Frederiksen, Ph.D.

Lee is Managing Partner and Director of Research at Hinge, a premier professional services branding and marketing firm. He brings over 30 years of marketing experience to the firm’s clients. He is co-author of Online Marketing for Professional Services.

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