Are Word of Mouth Referrals Enough To Help You Grow Your Business?
Everyone loves a word-of-mouth referral. Having a prospect get in touch because of a recommendation from an existing customer or supplier, and then having them proceed to becoming a customer themselves, is a great feeling.
It feels like money for nothing and is, on an important level, a sign you’re doing something right in the way you deliver your services, because no one recommends a company with a reputation for poor quality or bad service.
However, is word-of-mouth marketing, or referrals, a sufficient means of growing your business? While word-of-mouth still generates good leads for many businesses, in our experience, your returns can always be complemented and enhanced by a good online sales strategy.
In this article, we will survey the pros and cons of word-of-mouth marketing and how these can be strengthened by a tailored digital marketing strategy.
Why Word Of Mouth Referrals Are Good For Your Business
Word-of-mouth referrals are good for your business for several reasons, including:
- There are no acquisition costs for lead generation, potentially lowering your cost per sale.
- Your referee has already broken the ice on your behalf, and hopefully given the lead a good understanding of the types of products and services you supply, and the experience of working with you (but maybe not…)
- Referrals build referrals. If a referral becomes a customer and is happy with your business, they may be more likely to refer you to their network in turn, building a momentum of referrals.
You can encourage word-of-mouth referrals through incentive schemes to your existing customers and prospects, and by providing shareable social media content and marketing materials that referees can pass onto potential leads – thus keeping any information they supply in line with your marketing strategy.
The Downsides Of Word-Of-Mouth
Are there any downsides to word-of-mouth? Unfortunately, yes, and they all relate to your complete lack of control over the messages used and the quality of the referrals.
- You don’t know what your referees are saying about your company. Although you can count on the information being broadly positive, to what extent the information is accurate about your services, products, and prices, is anyone’s guess.
- You don’t know if the referred lead is a good fit for your company. Leads that come into your business through digital and other marketing means are prequalified, meaning that by the time your sales team speak to them they already have a good understanding of your business and what it can provide, and you know that the lead is a genuine potential customer. The same can’t be said for referrals. You could go through the sales process only to find that you’re not what they’re looking for after all, or they don’t have the budget to make a purchase.
- You can’t predict the quantity of word-of-mouth referrals. As you don’t know how many word-of-mouth referrals you’ll receive from month to month, is impossible to use them as the basis of a growth strategy.
Using Word-Of-Mouth Alongside A Tailored Digital Marketing Strategy
No sales tactic or marketing approach is necessarily bad if it gets you money. Our role as marketing specialists is to help businesses accentuate their strengths and focus on the strongest strategies for their industry and business, in order to cut the cost of sales and deliver higher overall margins and revenues. This is why, while not discouraging word-of-mouth, we nevertheless recommend companies engage in a broader spectrum of marketing activities to get the most success with online sales.
By applying a holistic approach, many businesses find their level of word-of-mouth referrals increases, and the quality of these leads also improves, leading to higher value sales and less wasted time. To find out more about digital sales and how we can help your company succeed online, please give us a call, or send us a message today.
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