Referrals have long been the centerpiece of many industrial firms’ business models.

Recent research showed that generating more referrals remains the top marketing initiative for professional services firms this year. But client referrals are no longer sufficient for firms looking to accelerate growth. While loyal clients will return and recommend your firm, buyers are increasingly turning online to research and identify the best firm to address their challenges.

In fact, in a new research study from the Hinge Research Institute, 81.5% of firms reported that they’ve received a referral from someone that was not a client. Why, then, did these individuals or organizations refer a firm they haven’t worked with? Because of that firm’s strong educational content and reputation and visibility in the marketplace.

Firms that are looking to generate more referrals need to rethink their traditional approaches to referral marketing and understand the three types of referrals. They need to refocus their strategies to meet today’s buyers where they search for information. Increasingly, that’s online.

Figure 1. How Buyers Check Out Potential Professional Services Firms

The Three Types of Referrals

Most firms are fairly familiar with experience-based referrals. These are referrals from clients—people who your firm has direct experience with. Your firm puts in the time and effort and produces great work for its clients. You might sit back and hope they refer you — or you might even proactively ask them.  But by focusing on this type of referral alone, your firm is missing out on big opportunities for new business.

The next two types of referrals are often made because of your firm’s powerful brand. Remember: your brand is the combination of your reputation and visibility.

Reputation-based referrals come from non-clients. These individuals or organizations haven’t worked with your firm, but know you because of your reputation. These referrals actually make up 46.4% of all non-experience referrals, making them huge opportunities. The sources of these referrals essentially fall into two buckets: either a general perception of quality or through hearing about your firm through friends or colleagues.

Do target audiences understand your reputation well enough to make it a subject of conversation? Continued marketing efforts can encourage more of these referrals.

The third type of referrals, expertise-based referrals, can be tricky. These referrals come also come from non-clients who refer your firm because of your well-known expertise in the marketplace. If your firm specializes in solving a particular challenge, people may refer you even if they don’t have direct experience with your firm and aren’t aware of your reputation. But how do you project that expertise effectively?

Our research took a look at the sources of these referrals and the takeaway is clear. Your firm can increase its expertise-based referrals by having a strong marketing strategy and online presence.

Figure 2. Sources of Expertise-Based Referrals

The most popular sources for making expertise-based referrals include hearing an expert speak (30%), reading a blog or article (20%), and engaging via social media (17%).

Conduct market research to understand where your target audiences are finding their information. Be present and showcase your expertise across those channels. Get your experts speaking and writing about their expertise and how they can address prospects’ top challenges.

Understand where your referrals are currently coming from and start strategizing a referral marketing plan that generates more of all three kinds of referrals.