Word of mouth for new business: is it an effective strategy in sales?

by | Jun 8, 2021 | Uncategorized

Word of mouth for new business: is it an effective strategy in sales?

Word of mouth for generating new sales leads – effective strategy or lazy tactic?

“Word of mouth is my only form of generating new business…”

Many are the time I have delivered a presentation, attended networking or had a conversation on social groups that ask the same question; what is your number one form of generating new sales opportunities for your business? Many are the time I am met with the same response: “Word of mouth is my only source of new business

Did you know that in a recent survey published on Entrepreneur website, 85% of small business owners relied on word of mouth referrals to win more business? (source: https://www.entrepreneur.com/article/302229) . 85%! I should be totally shocked but given the volume of businesses that claim this for their own operation, it isn’t really that surprising, and certainly not shocking.

What if “word of mouth” loses their voice?

Take a moment to consider how your world, and the world of your customers, has changed so drastically since March 2020. When restrictions on movement and our usual activities were put in place, can you realistically have expected that the first and primary thought of your target customer and existing customers was for you and your products and services? Absolutely not! You should read more about how the sales environment has changed and won’t be going back!

Why Word of mouth is NOT a sales tactic to rely on.

I think resting on the laurels of word of mouth marketing to fill your new business pipeline and your business bottom line is reckless and rather naive. Word of mouth in its traditional form relies solely on other people to your bidding for you. Are you seriously comfortable handing over responsibility for your marketing to other people chatting over the garden fence or eavesdropping on other people’s conversation in the local cafe or pub on a Friday night?

We believe word of mouth is not an effective or repeatable sales strategy. In its loosest sense, can you knowingly increase word of mouth by 10% for example? Of course not, we are leaving to luck the hope that our best customers will actively talk about us and do all our work for us!

It is not a proactive sales tool and not a tactic you can rely on in lieu of any other form of sales activity. Generating leads for your business and sales growth needs to happen on platforms, communities, brand, print and outlets that you have some semblance of control over; word of mouth in its traditional form is wholly reliant on others remembering you at a time convenient to your business.

Word of mouth is not an effective strategy for business growth, it is a happy bonus and proof that your other marketing and sales pursuits are working effectively.

Plan. Grow. Do.’s Rob Taylor

I believe that word of mouth is not marketing. I think a solid referral strategy is far better and more effective than hoping and relying on others to send business your way!

You must take responsibility for your referrals

Marketing referrals for the modern business are built upon trust, collected in a considered fashion and distributed in a strategic way to improve your website visibility, allow you to raise prices, make the negotiation easier and conversions more effective.

By taking control of your reviews, referrals and recommendations you are in effect in control of your marketing and lead generation too and can be grateful for any traditional word of mouth that comes your way, rather than desperate for it to happen.

The difference between classic word of mouth and modern referral strategy is that with modern referral marketing you are in control of an everlasting feed of high value recommendations and referrals, not just hoping that your previous customers go and tell their mates about your product.

Modern referral opportunities to build new sales leads:

  1. Third party review platforms (Trust Pilot, Trip Advisor, relevant industry review platform)
  2. Google reviews
  3. Social media recommendations
  4. Email referral

As with anything for your marketing, you need to consider what you want your marketing referrals, reviews and recommendations to achieve because remember, you are in control! You can direct your customers to leave reviews, recommendations and 5-star reviews on your Google platforms, which also boost your organic search rankings and visibility online: you are making your reviews work for you – not relying on traditional word of mouth!

The 3 Rs of building your online dominance.

In a slight tweak to our famous Three Re’s opportunity for existing customers, I am taking a small liberty by replacing out repeat with recommend. When aiming for your market to generate new leads and opportunities for you, how can you encourage your customer base to review, refer or recommend you?

  1. Review – which online review platforms can you direct your delighted customers to? Where would they leave you a 5-star review and is it relevant to your target market?
  2. Refer – Can you get the happy customer to tag your product online, to share their purchase, to tweet your product range after purchase? Can they show their using of the product in terms of testimonial video?
  3. Recommend – Can you capture any recommendations on your Facebook business page, LinkedIn or will you be tagged on social media groups when others ask who they would recommend for your service?

Prevent word of mouth losing its voice!

The next time someone asks you at networking, online or in a business meeting, “what is your main source of new leads?” I want you to answer honestly and proudly that you have a considered approach to referral marketing and build reviews and reputation on platforms that you have elements of control upon. You do not rely solely on traditional word of mouth (if you do, change it – quick!). Don’t wake up the victim of word of mouth losing their voice or moving on to the next big thing; you need to bank the review, recommendation or referral. If you achieve one of these three things, your business has an evergreen review of your services that will never lose its voice.

Further reading and resources around the power of the Three Re’s for building an effective sales channel from existing customers.

Review, refer, repeat to generate new sales opportunities
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