Marketing Consultant: Talking the Talk

POSTED: May 18, 2010 BY: CATEGORY:

One of the most cost-effective ways of getting sales in the door when you are on a shoestring budget is through word-of-mouth referrals.

I have been able to gain new clients from these types of referrals, which is great.  There have been times and some instances though where the process has not delivered the types of clients that I was searching for and this has proven to be tricky to manage.

Why write about and recommend word of mouth referrals when it hasn’t always worked for me?  The answer is sleep deprivation.  As a new parent there was a period where I wasn’t sleeping for more than a few hours at a time – it was challenging to say the least.

But I did eventually stumble across Kate, a sleep consultant, who was able to help me.  How did I find Kate?  The answer is through talking to other mums.  Since then I have referred Kate to other mothers who have also engaged Kate’s services.  In my networks it seems that word travels fast, especially when it comes to sleep.

It was through this example that I realised that I could do more in my own business to leverage word-of-mouth referrals.  The question I asked myself was does word of mouth really generate significant revenue for business (big and small), and how does a company on a shoestring budget generate more of these types of sales without breaking the bank?

I started with Google.  I was initially surprised to discover that there are companies who specialise in generating business for other companies via word-of-mouth referrals.  One particular company is called Word of Mouth on the Web (WOMOW).  If your target audience is B2C, this site may be a way to compile online reviews about what you do, which then can be used in your email signature or as a link on your website/blog – or to generate referrals for your business.

If what you do is B2B or consulting work, then no doubt a lot of your work comes from word of mouth referrals.  Consultants like Denise Shrivell have told me, “I get most or perhaps all of my business through word of mouth.”  For many B2B companies social media tools such as LinkedIn and Twitter can also help.  While previously you used the phone to catch up with all of your contacts, social media tools can provide a quick and easy platform to spread the news about your business.

Many people over time have suggested that I ask all my clients to refer me to other potential clients.  While I’m reluctant to do this, I know of other business people who work this way.  Perhaps a less intrusive way of soliciting referrals is to ask clients for testimonials once a project is complete or after a few months of working together.  This is also a more subtle way of letting them know that you would appreciate them referring your company to their own friends, family and colleagues.

If you are still uncertain how to approach word of mouth referrals, networking coaches like Sean Grobbelaar, have developed businesses dedicated to giving you advice and training in this particular area.  One issue with word-of-mouth referrals that you may have faced in your own business is the concept of rewarding the person who originated the referral.  I’ve purchased from an online shopping club that has a system of providing a cash reward to members who refer other members that go on to make purchases.  While that seems to work in the B2C market, I’m not sure that it works as effectively in B2B.  Don’t you agree?

Delving further into the psychology of word-of-mouth referral is Paul Benson, who runs a financial planning business and has made an interesting observation about the types of people who are willing to make referrals.

Benson believes that there are some people who, no matter how happy they are with your product or service, will never refer.  Then there are other people who will refer over and over again.  Have you noticed this?

Benson suggests those people who refer your business to others are usually the go-to people in their social circles, who rarely have qualms in telling people what they should do or who they should see.  To capitalise on this, Benson says that his business makes ‘a bit of a song and dance about the referral’ by sending a thank you letter, making a phone call to say thank you and providing such things as a Myer gift voucher or even Gold Class movie tickets.  Perhaps a reward program does work in this instance, whether it is B2B or B2C.  If you want to identify those who have referred in your business, why don’t you consider creating a segment in your database dedicated to this?  It would be a good way to track results over a period of time and test if Benson’s theory works in your business.

Other suggestions you may like to include in your word-of-mouth marketing plan:

  • Reward those who have referred in your business with books that are not available in Australia; perhaps purchase them in bulk from Amazon and rotate the list of people who receive them
  • Join a word-of-mouth referral group such as BNI
  • Have a professional looking website – it’s always easier to refer people who at least look good online
  • Look for partnerships with other businesses that have the same target audience, but are in separate industries
  • Use ‘free’ promotional tools such as radio station segments, speaking opportunities etc, and
  • Use the web and blogs as much as possible – Craig Reardon from The E Team calls this ‘Word of Mouse.’

But what should you do when, even after all of your effort, you end up being referred to the wrong type of clients or business?

Marc Harrison, a consultant based in Melbourne, explains that taking on board a ‘wrong fit client’ is a risk, but is easily done.  If you do so, you may not do the job well and this makes the original person who referred you look bad because you have indirectly let them down.

If you do think that a new lead will not make a great client, be honest and do what you can for them, including helping them find someone that is right for them.  They will likely go back to the original person who referred and thank them, and this also makes it more likely that this person will refer you to someone that is likely to be a better client in the future.

In summary, if you do a great job you will ultimately get referrals.  Emma, the owner of an online food company that I buy from, delivered my goods in person today – I have already told four of my friends.

By going that extra mile, you word-of-mouth referrals will follow and with some formal plans in place to leverage on this, it will no doubt become an important part of your marketing plan.

Publication: Marketing Magazine

Issue: 5

Month: May 2010

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#Jo Macdermott - turning good businesses into great businesses is all in a day’s work for marketing consultant, Jo Macdermott. Jo leads Next Marketing, a multiple award winning business, which she has grown from scratch. Jo is commercial, empathetic and always has her eye on the end game.