The Word of Mouth Lie

One of the most widely held pieces of misinformation relates to word of mouth advertising. Specifically, business owners believe if they do a good job, people will tell their friends. This is just plain false.

You’ll understand why, when you realize two facts. First, people expect you to do a good job. Generally you are only noticed if you some how manage to wow them, or if you disappoint them. Second, most people don’t naturally talk about businesses, even ones they’ve had good experiences with.

While some may argue with me, I would assert that it’s not possible to wow every customer, or even most. You can provide great customer service, and better products than your competition, but that alone probably won’t give you the wow factor.

Doing a great job is only half of the process anyway. The other side is helping your customer understand how he/she got a great deal. This can be difficult as we’ve been taught from an early age not to brag. By default many of us go above and beyond for our customers without the customers even knowing. While this is fine, it certainly doesn’t allow our customer to understand what a great decision he/she made.

Don’t you like making a great deal… getting an outstanding product or service at a fair price? So do your clients, so be sure to let them know all you do for them.

Note: This is best done after the sale. Too much information during the sales process is a classic way to lose a sale.

As a business person you probably put yourself in the position of a connector. You try and help your customers and in doing that you seek out opportunities to recommend qualified people to solve problems whenever possible. The thing to keep in mind is that your customers probably don’t do the same thing.

You need to educate your clients so they understand how important referrals are to you and you need to stay in touch with your customer base. When you are constantly in front of your current clients, they are more likely to remember to give out your information when presented with an opportunity to give a referral.

Referral Programs

When people talk about getting more word of mouth advertising, the subject of referral programs comes up. The question is, should you pay people to refer business to you. If you ask me, the answer is no…

But why? It’s because for many people this will create an inner dialog about passing out referrals to you. They will have to decide if they are just doing it for the bonus, or if they really believe in your service, and either way your clients are likely to feel guilty for making money from “selling” something to their friends. Not only may this reduce the number of referrals you get, it may also create fewer good leads. In other words, the people getting referred to you will have some idea that somethings up and won’t be as open to your sales message.

You want people to feel good about referring you. You can do a few things to make people happy they referred business to you.

  • Do a great job – Most importantly, you must do a good job helping the person who was referred. When someone gives a referral, both the referrer and your reputations are on the line.
  • Speak highly of the referrer – Sometimes you may get a referral where the prospect still hasn’t closed his/her deal with the referrer. If possible, help that process along.
  • Call and say thank you – Not only is this polite, it will reinforce your message about how important referrals are to you.
  • Send a thank you card
  • Send a gift basket
  • Send a gift card

Note: It may seem counter intuitive to give out gifts to referrers when I just said not to pay them. The idea is that you don’t have something in place where they know ahead of time that they will be paid. Gifts afterwards are great. If you give a gift and you normally just send a card or make a phone call, you may want to include a note and tell them why this was such an exceptional prospect. This avoids someone feeling slighted in the future.

Marketing to your existing list to get referrals is usually the best money and time you can spend. I highly suggest you focus more of your energy on it, unless you are over run by business.