Sales and Sales Management Blog

December 26, 2007

The False Promise of Word of Mouth Marketing


We’ve all heard the advice: turn your clients into your mini ‘sales force’ by encouraging them to tell others about you and your business.  Word of Mouth Marketing is touted as being the easiest and best marketing any salesperson, professional, or business can hope to get.  Not only does it get your word out, but nothing is more powerful than a customer telling others about how great you are.  Customers will flock to your door if your clients create a buzz about you.

There is some truth to those statements.  If you can get your customers to create enough ‘buzz,’ you will see an increase in your business.  Customers will come.  Sales will increase.  Nevertheless, for most small businesses and salespeople, the hype about word of mouth marketing is a false promise of easier, less stressful marketing and increased business. 

The problem isn’t with the concept.  A broad, expansive word of mouth marketing campaign can work wonders for a business.  If you can get enough people talking about your product or service—or you, the method can be one of the most effective marketing formats there is.  A spontaneous recommendation from a very satisfied customer is a powerful thing that few other marketing methods can match.

The problem with word of mouth marketing is the breadth of buzz needed in order to see an increase in business–and the passive nature of the method itself. 

True word of mouth marketing seeks to create a substantial level of general discussion and awareness within the community of a product, service or individual business.  This awareness isn’t spontaneous but is rather generated and directed by the company who is seeking the promotional benefit of the marketing.  True word of mouth marketing is typically engaged in by large companies who commit millions of dollars to creating the ‘spontaneous’ viral marketing by ‘customers.’  Often the ‘customers’ who are spreading the word about the product or service are not actually customers but are hired to appear as satisfied customers or are receiving some type of incentive for talking up the product or service.

On a much more modest level, small companies, professionals, and individual salespeople try to create word of mouth marketing by asking their legitimate customers to tell others about their services.  Unlike the major word of mouth campaigns above, these are simply a handful of truly satisfied clients whom the salesperson or company encourages to spread their word for them by telling family, friends and acquaintances about their experience and then encouraging the prospective customer to call the salesperson or company. 

Of course, this mini word of mouth campaign can never begin to reach the magnitude of buzz of that created by the major corporate campaigns, but the hope is the same—increased business through the transmission of the company or salesperson’s message to potential new customers through their existing client base.

Unfortunately, for the typical individual salesperson or small company, the numbers simply don’t work.  Despite their effort to encourage each client to tell others about them, in reality only a small percentage of customers will actually tell anyone else about the salesperson or the company.  Recommendations generally only come when the client happens to hear someone say they are currently looking for the salesperson or company’s products or services, and these occasions of happenstance occur very seldom for any one customer.  Consequently, for the word of mouth marketing campaign to generate a substantial increase in business, the salesperson needs hundreds or even thousands of customers spreading the word for them.

To compound the issue, once the customer has made the recommendation to a potential customer, the prospect must then take the initiative to contact the recommended salesperson or company.  All the salesperson can do is hope the client passes the word along and that the recipient of the recommendation decides to act upon the recommendation and contact the salesperson.

Word of mouth marketing is a passive activity where the salesperson has no control over any aspect of the process once they have encouraged their client to tell others about them and their products.  Either the customer chooses to tell others or they don’t.  Once a client has encouraged a prospect to seek the company or salesperson’s services, the prospect chooses to contact the recommended company or salesperson or not. 

For a small company, professional, or salesperson to rely on word of mouth marketing as their primary method of generating new business is dangerous.  Asking others, no matter how much you trust them or how sincere they are, who do not have a stake in the success of your business is to risk your success and future on chance. 

This is not to say that word of mouth marketing should not be a small portion of your marketing plan.  Word of mouth marketing certainly has its place in the marketing lexicon of most businesses.  It is simply to say that it should play only a minor part in the marketing strategy of your business. 

Nor is it to say that some small businesses haven’t used word of mouth marketing successfully.  For some certainly have.  Most of those who have found word of mouth marketing to be highly successful have tended to be retail stores and others who rely heavily on walk-in traffic. 

Moreover, it isn’t to say that a salesperson or company’s client base can’t be the primary source of new business, for it certainly can, and for most businesses and salespeople, it should be.  However, it shouldn’t be through word of mouth marketing but rather through referral selling. 

Although often used as synonyms, word of mouth marketing and referral selling are distinctly different marketing methods.  As mentioned, word of mouth marketing is a passive activity.  On the other hand, referral selling is a highly proactive marketing format.

Whereas with word of mouth marketing, you have no control of the process; with referral selling, the you retain complete control of the process. 

Referral selling is a process where you work with your client to acquire direct introductions to others your client knows who may need or want your products or services. 

True referral selling is a disciplined process that establishes a relationship with your client that has a predictable outcome—receiving a large number of high quality referrals from the client.

Unlike the referral method most salespeople, professionals, and business owners have been taught, true referral selling isn’t just “doing a good job and asking for referrals.”  That method, like word of mouth marketing is more chance than process.  The most typical result of ‘asking’ for referrals as most have been taught to ask, simply results in the client claiming they have no referrals to give or if they do give a name and phone number, it is most often little better than taking out the phonebook and simply pointing at a name at random.

In order to turn referral selling from being little better than a warm call to a suspect rather than a true prospect, you must develop a referral generation process that:
•  Gives your client an opportunity to get comfortable with giving referrals
•  Lets the client know exactly what a quality referral is
•  Gives the client a reason to give referrals
•  Gives the client ample opportunity to think of quality referrals to give
•  Helps the client come up with several quality referrals to give
•  Turns contacting the referred prospect from a warm call to a direct introduction

A referral process that meets the above criteria turns referrals into a disciplined process where you retain complete control.  You know exactly where the process will end—with several high quality referrals to people you know you want to be referred to and with a direct introduction to them from your client.

Word of mouth marketing is dangerous for the typical salesperson or company if relied upon as their primary marketing method.  It is easy.  It is safe in the sense that the salesperson seldom hears rejection.  But for most salespeople and companies, it cannot produce enough new customers to sustain the business.  The promise of easy marketing and increased business is false because the premise of word of mouth marketing on a small scale is false.

Yet, taking the time and effort to learn how to generate high quality referrals from each of your clients will expand your business many times over by eliminating chance and replacing it with a predictable process to generate new customers.

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4 Comments »

  1. Carnival of the Capitalists

    Hello, and welcome to this week’s Carnival of the Capitalists for January 7, 2008. This is the first CotC for the year, and perhaps the last of its kind. This site, Small Business Essentials, provides information for small business owners and ent…

    Trackback by Small Business Essentials — January 7, 2008 @ 12:47 am | Reply

  2. Thanks for including my article in the Carnival of Capitalists entry this week. I’m honored to be included in your select list of sales and marketing articles.

    If you haven’t been to Carnival of Capitalists, I suggest you go–they have some excellent articles in their weekly collection.

    Comment by pmccord — January 7, 2008 @ 6:18 am | Reply

  3. […] for hosting this weeks Carnival of the Captitalists, with some interesting information on Word of Mouth Marketing , I agree with this article and I do think it is a necessity in any market, I also have to say it is […]

    Pingback by Trade Show Display Exhibits Blog » Blog Archive » Carnival of The Capitalists - Small Business Essentials — January 8, 2008 @ 11:30 am | Reply

  4. But is that really word of mouth marketing?

    Trackback by The Journal Blog — January 16, 2008 @ 10:19 am | Reply


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