Whenever I speak to a business owner about how they market themselves, the most common answer is – Word of mouth.
That answer tells me this business has very likely plateaued and become mired in the status quo because while “word of mouth” marketing is great, it’s also painfully slow and a very unreliable way to build a business.
Word of mouth is the equivalent of a free lunch.
It’s great when it comes your way, but do you really want to rely on it to feed yourself and your family?
It takes a lot of blind faith to build your business on this method and is a very dangerous path to take.
Referrals have to be proactive, orchestrated and systematized.
Once you understand the psychology behind referral marketing, you’ll never take a passive approach again.
Think back to a time you recommended a restaurant or car dealer to a friend.
Did you do it as a favor to the restaurant or car dealer or did you make the referral because it made YOU look and feel good?
You did it because you wanted your friend to have the same great experience you had.
Keep that psychology in mind when proactively orchestrating your own referral marketing system.
It has to be reliable and deliberate.
When I first got into the car business I learned my automotive marketing and selling practices from the worlds greatest salesman – Joe Girard.
His system was created because of his “Rule of 250” he learned by observing the average attendance at a funeral was 250 and for weddings, the average number of guests was 250 for the groom and 250 for the bride.
He realized that if every person he met knew an average of 250 people then every person he did business with represented a potential 250 referrals.
So systematizing your process of delivering your product or service so that it was an exceptional experience and systematizing your nurturing and referral process is critical to growing your business.
Word of mouth is nothing more than a hope and a prayer method.
The optimal strategy for referrals is to have a system of consistently asking for one.
By putting a system in place for generating referrals, you dramatically increase the reliability and constancy of word of mouth marketing.
Relying on the goodwill of others is a fools’ errand.
The best referrals come from your ideal best customers so build your referral system around two things.
- Target your ideal best customers – the 5% to 20% that generates 65% to 80% of your business.
- Focus on the specific problem this group of potential customers has that you have a unique solution to.
If you are a B2B Biz, we have a technique called “Vendor Well” that is a unique and effective word of mouth referral system.