A few months ago, I was speaking to a marketing manager and I was shocked. I could not believe what she said. When asked how well known the business was in the local area, she said:
'The ones who need us, know about us. We don't promote locally'
This was completely against my instincts. Could they be right?
How did 'the ones who need to know', know? It sounded like a secret club. When I explored further it turns out they didn't advertise locally as they relied on referrals. Now I love word of mouth and referrals but is it the way forward? Can you grow a business like this?
Is this a good strategy? Let's consider the advantages of relying on referrals for the local area.
Word of mouth is powerful
There is no denying it, customers who have been recommended to your business by friends and family are more likely to buy from you. The stats show if a customer is told about your business by a friend or acquaintance, they are likely to spend more and they will recommend you to others (stats here ).
Word of mouth is a cheap marketing method
Word of mouth costs you very little. You can focus promoting your business to current customers, instead of spending money promoting to new customers.
Sounds good, but what are the disadvantages:
You have no control over referrals
People may forget you and your service. People may also say negative things about your business.
Your audience will remain small
If you only have a few loyal customers, they will only be able to refer you to their friends and family, which limits your audience.
Your brand can be damaged
If you have changed your business, and people refer you for what you have done in the past, this will promote the wrong perception of your brand.
Should you just rely on word of mouth?
The answer is no. Word of mouth should be one part of your marketing strategy, not the main method.
Instead define your target market and promote to them, whether they are near or far. As a marketer or business owner you need to tell everyone who is your potential client about your business, not just rely on others to do the work for you.
Am I wasting money if someone who isn't my ideal client sees my business?
No, as long as you are mostly promoting to your main client base.
For example you own a baby goods shop. Your newspaper advert is seen by everyone in the local area, who are mainly parents. But five 80 year old men see the advert too. Is this a waste?
No because one of those men is a grandad, who will tell his children about your shop.
Word of mouth has organically started, however you have taken action.
The wider you cast your net, the more results you will see. It is that simple.
So, what was my answer to the marketing manager?
A good strategy relies on multiple promotional methods including word of mouth and methods which you can control. Narrow your audience and tell them how you do things better. Niche, but do not rely on others to spread the word.
I would love to know what you think? Do you rely solely on word of mouth or other methods?
If you would like to establish the best promotional methods for your business check out the Impact Plan or my DIY courses.
Sign up here for my latest webinar, helping you troubleshoot your marketing and find the steps for success.
Sharing marketing ideas, business tips and so much more.