Marketing Mistakes 101: Relying only on Word-of-Mouth & Referrals

This is going to be a touchy subject.  Why?  Because small business owners are notorious for relying wholeheartedly on word-of-mouth marketing and referrals from past clients and other vendors to build their business.  Though it’s not my intention to rain on your referral parade, my purpose of this post is to open your eyes to the control you relinquish to everyone else when you rely on their impression of your business alone.

FACT:   Word-of-Mouth marketing is the only uncontrollable form of marketing you have of your business.  It’s the simple truth that you cannot control what people say and do.  Yes, good work likely produces good referrals but it’s not necessarily someone’s opinion I’m referring to.  Here are aspects of word-of-mouth you cannot control…

  • Timing. You cannot control when someone will refer you new business.  It may be a week, a month or a year before your happy client runs into someone who needs your services.  You never know.  If you rely on an event planner for referrals and that event planner isn’t as go-get’em as you are at building business, it may be many moons before she has a client that needs your services.  Meanwhile, you’re waiting listening to crickets.
  • Sphere of Influence. You cannot reach nearly the same about of eyes and ears with 1 or 10 people as you can with mass marketing.  Twitter this, facebook that, the number still won’t add up.  Or perhaps you’ve always worked in weddings and now would like to break into the mitzvah market but the planners who refer you only do weddings.  Everyone’s sphere of influence is different and limited.
  • Opinions. You can produce excellent work all day but if your personality quirks are stronger than your excellent imagery and your referral sources are “over you” you can’t control that and they will soon refer someone else.
  • Spreading the love. Referrals are a two way street.  It’s not wise for a business to only give referrals to one specific person and expect all their returning referrals from that one source will build the bottom line.  In the referral world, like marketing, it’s about maximizing the sources.  So, if you’ve enjoyed working with a particular venue over and over again and all of a sudden they start referring another planner,  their decision may have nothing to do with an opinion of you but rather an opinion of their own referral practices.  They want more referrals coming in from multiple sources which means they have to spread out their referrals to those other sources too.  Spreading the love to other businesses like yours happens all the time and can leave you with less word-of-mouth traffic.  I’ve had the conversation too many times with wedding professionals.  Their stream of referrals from particular venues, caterers or planners used to runneth over and now it runneth dry.  Competitors are savvy.  If you have a great relationship with a caterer, bridal salon or venue, there are 10 other planners just like yourself vying for that referral source.  They will attract the attention of your word-of-mouth well, it’s inevitable.
  • Business decisions.  You cannot control the goals and aspirations of others.  I spoke with one photographer once who used to receive a lot of referrals from two planners.  Ironically, both planners decided to take a leave of absence from the industry and move to motherhood.  The referrals took a leave of absence too.

Take heed, if you rely on word-of-mouth and referrals as your only source of new client inquiries, when those referrals dry up, business dries up too.  It’s likely it’ll happen without you ever noticing and leave you hustling to find new clients.  Marcia Yukin, author of 6 Steps to Free Publicity and publisher of Marketing Minute recently wrote to Trent Ernst on his blog here saying “Desperation is not conducive to effective marketing.”  Amen.

Don’t wait until it happens to you.  Make a marketing recipe.  Toss in a little bit of this, a little bit of that.  Don’t advertise in just one magazine and don’t rely on just word-of-mouth.  There is no secret recipe, no one ingredient.  Full Circle marketing is a collective effort of many different lines of communication between you and your perfect client.  You’ve got to invest in your business for your client to invest in you.

Here are two excellent blogs I found explaining more about the woes of word-of-mouth….  Read on.

Do you trust too much in word of mouth?

Seven Reasons Word of Mouth Marketing isn’t Working For You