The Power of Word-of-Mouth

Effective marketing is the lifeblood of an entrepreneur’s operations.  There are two main challenges for most business start-ups – how to get people to know they exist and how to convince them that they should buy their product or service.

How can an entrepreneur be successful at marketing with a tiny or non-existent advertising budget? Networking can be an inexpensive way to get prospective customers to hear about you. Here’s another low-cost method to influence them to accept your offerings — referral marketing.

Referral marketing is simply using your existing customer base as a sales force to spread the word about your operation. Think of how eager you usually are to check out a new restaurant or movie when a friend gives you a glowing recommendation. The same process can work for your business, if you encourage your clients to enthusiastically tell others about your product or service.

How can you harness the power of word-of-mouth to work for you? Let’s look at some key steps:

Satisfy your clients

The first step to getting great reviews is to provide an exceptional buying experience. Focus on delivering high quality products and services, as nobody will recommend your business if they’re really not ‘wowed’ by what you have to offer.

You can also create trust and loyalty by building solid relationships with your clients. There are some professions, such as therapists or hairdressers, where customers are gained mainly on the basis of positive recommendations.

Ask and you will receive

Some entrepreneurs may feel a little uncomfortable about asking their current customers to refer their friends and acquaintances. Unfortunately, salespersons have gotten a bad reputation as being pushy and self-serving, and many business persons would rather not risk offending their customers by appearing to ‘beg’ for customers.

One definition of an entrepreneur is someone who solves people’s problems for a profit. If you’re confident in the quality of your offering, you should be eager to solve as many people’s problems as possible.

A great time to ask for a referral is after your customer has congratulated you on a job well done. Respond to the compliment by saying, “I’m happy that you appreciate my work. Do you know any one else that you think could benefit from my services?”

Develop a referral system

David Frey, writing on www.businessknowhow.com, declares that simply asking existing customers for referrals doesn’t usually provide dramatic results, as it is not a systematic process. “People don’t get even a tiny amount of the referrals they could be getting simply because the whole ‘asking’ process is flawed,” Frey points out.

To be successful in referral marketing, Frey explains, you have to create a system that will give predictable results and solid returns. The idea is to offer incentives to existing customers at every point of contact.

For example, you can give out coupons to your customers offering discounts if they bring a friend the next time they shop at your establishment. If you send out monthly bills, include a leaflet highlighting the referral benefits.

So, create a repeatable process that consistently encourages and rewards your existing clientele to become your evangelists, and you could truly experience the immense marketing power of word-of-mouth.

(c) 2008 Cherryl Hanson Simpson

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