“We don’t do marketing. We get lots of referrals – word-of-mouth works for us.”
It sounds terrific, doesn’t it. You do a good job, and your happy clients do your marketing for you, passing your name on to other relevant prospects – who want to work with you, because they’ve seen the results you’ve achieved for their best friend or colleague.
Unfortunately, “we’ve been relying on word-of-mouth” is also frequently cited by companies who come to us for help, because their business has stalled, or simply isn’t growing as fast as they want.
Here’s the word-of-mouth paradox.
On the one hand, referrals really are the best advertising there is. A personal recommendation from someone you know will always be considered more reliable, and more attractive, than anything a company can say about itself. And lots of businesses do grow steadily like this – for a while.
On the other hand, word-of-mouth will never power your business to tremendous growth, except under exceptional circumstances (when you go ‘viral’).
- It’s very slow – when you rely on individuals to recommend you, you can only reach a limited number of people
- They probably only mention your business once or twice. If they tell right people but at the wrong time, nobody nurtures these prospects
- Referrals are completely limited to your existing network
But most problematically, you’re not in control of the process of growing your business.
You are completely dependent on the kindness of others. You have no control over what they say about you, and they will probably not sell your business in the way that you would. If they decide to stop recommending you for any reason, your business falls away. If you decide that you want to grow your business faster, you have no way of ramping up their efforts.
Relying on word-of-mouth as your sole, or even main source of new clients, therefore, is limiting – and risky.
What every company needs is a system for growth – one where they are active, not passive in their own marketing; which brings in a reliable and consistent stream of business; and which can be expanded fast when the company wants to grow.
This is also known as a ‘sales funnel’.
If you leave your marketing to others, your business is at their mercy.
Do you agree? How has word-of-mouth marketing worked for you? Let us know in the comments!