The facts: For small businesses with limited marketing budgets (or no marketing budgets), referrals are essential for growth. You may be competing against big chains with big budgets, and you are definitely competing for the time and money of people who don’t have a lot of time and money. If you have living breathing advocates for your business, none of that matters.
If you give people a reason to talk about you, you can spend less money on marketing. This is why I believe that the marketing tactic with the highest possible ROI (return on investment) is Word Of Mouth marketing.
People trust their friends and family more than any celebrity endorsement or high price advert. If your best friend says, “don’t go to that restaurant, they are so rude there”, guess where you are not suggesting on your next girls night? If your Mom says her best friend’s daughter took her to a fabulous spa, guess where you will be going on Mother’s Day? If your fitness accountability buddy falls in love with a trainer who teaches spin at 6am on Wednesdays, you will probably be getting up extra early next hump day.
As a business owner, you don’t have to pay any money for this type of advertising, but you can enjoy the benefits of referrals as a way of attracting new customers. People talking about how amazing you are to their friends, family, and their followers on social media is a powerful communication vehicle.
To be clear: Just because it doesn’t cost a lot of money the way a billboard advert would, word of mouth marketing still requires investment.
Word of mouth cannot be directly bought. There is no budget that can pay for people to say nice things about your business. It must happen organically. Even if you could pay people to say nice things about you, it wouldn’t mean as much, because you paid them.
So how are you supposed to get people to say nice things about you?
You put sincerity back in to your business, if it isn’t there already. And by that, I mean find ways to personally thank your customers.
Here is why it works:
The staff love it. Even the most exhausted of Managers (if you have ever worked in a restaurant, you know every Manager is exhausted) love the fact that they get to pick someone and completely make their day.
These random couples go out into the world and talk to their friends and family about this amazing unexpected thing that happened to them at the local Harbour House Restaurant in Kalk Bay. Customers would tell others that they knew someone who was a lucky couple. It gives people a reason to talk about the restaurant other than, “the fish was good.”
I recently bought shoes at Footgear’s factory outlet in Access Park, my first impression “Great!” no really fantastic, the store layout and merchandise on display was all managed but the staff’s attitude, enthusiasm and helpfulness was just perfect. What I noticed was that the customer service level from each sales staff, in each shoe department was exactly the same. I was even offered a coffee, while I browsed for my daughter’s birthday present.
It didn’t cost much, it just shows me their management is on the ball and sufficient staff training occurs regularly, while their staff are happy employees which take their jobs seriously.
The result, I will become a repeat customer who in the last three days has spread the good word to people I know. Therefore if 100 customers in a week have the same experience and tell another 100 new customers about the fantastic store with its fantastic service, we have 10 000 new potential customers purchasing. A business owner would need to spend, say R30 000 plus for an A4 single page advert in a national magazine publication with a similar market reach. Behind the scenes the business owner would need to hire a creative marketing team to come up with an advertising campaign designed to do what the word of mouth has achieved:
- Attract the customer
- Hold their interest
- Create a desire to visit the store
- Get customers to purchase
I read a case study about word of mouth advertising. Simply put, word of mouth is contagious and when it goes VIRAL, you will enjoy a thriving business which has the ability to compete against much larger organisations with big budget marketing budgets.
Here’s an example of viral word of mouth:
An engineer started manufacturing food processors, the product is great and say, an above average premium brand with sales which eventually plateaued. The owner hired a new Marketing Director to assist in taking his company to the next level, the Marketing Director heard that the owner which was an engineer by trade always testing their new models with unconventional methods. The R&D performed was done to continuously improve their designs in order for their customers to enjoy a premium quality product which was reliable in the toughest environments.
The Director had seen the engineer blending marbles to dust, so he has an idea, an idea which cost the company $36 by filming the process and placing the content onto You Tube.
The result: The videos went viral and became a discussion for customers to watch in amazement and share the content. The company performed a series of videos and even blended an iphone among many tough household items and their sales soared by 280%.
What can a small business do to create word of mouth marketing?
- Treat your staff well, invest in customer service and sales training, as happy staff lead to happy customers.
- Be Different, when the market is "zigging, you zag", differentiate your service and other elements you can control. Stand out of the crowd so people can talk.
- Social media and websites are a great tools, keep them clean and simple to navigate while placing meaningful content which is valued by your customers. Allow the content to be shared in order for your ambassadors to promote it for you. A twitter account can be used as a faq (frequently asked questions) portal. The website is a 7 day a week salesman, if you choose the correct platform you could enjoy a CRM system attached to your website by keeping your customer database attached to the site and your email campaigns could be executed from one place.
- KISS – Keep it simple stupid! Remove as much hassle from your product and service offering by thinking like your customer.