We all know word-of-mouth is a crucial promotional medium, especially for small and medium sized businesses; we also know that it is the most uncontrollable form of promotions. We can’t specify a certain amount of our market budget to word-of-mouth, or referrals. So what can we do? Seth Godin has posted some excellent pointers on his blog:
There’s been thousands of pages written about this topic, but still, no luck. It’s too hard.
Yes, we know that referrals are the very best way to grow your business.
And we know that asking for a referral is both scary but apparently the most effective technique.
And we know that excellent service is a great place to start.
But still, not enough referrals. How come?
First, marketers often forget to look at this from the consumer’s point of view. Why on earth should I give you a referral? Yes, I know it’s important to you, but why is it important to me?
And second, I have a lot to lose if I refer a friend to you. You might screw up, in which case she’ll hate me. Or you might somehow do something that, through no fault of your own, disappoints. If I recommend a greek restaurant and my friend goes and they don’t have skordalia, and she loves skordalia… oops.
And third, the act of recommending you isn’t easy. It’s not easy to recommend a tailor to make your co-worker look a little less shabby. It’s not easy to bring up the fact that you have a great psychiatrist or even a particularly wonderful (but very expensive) shoe store.
Given the no-win nature of most referrals, you need to reset your expectations and consider a few ideas:
Make it easy for someone to bring up what you do (by changing the nature of the service or product).
Give your best customers something of real value to offer to their friends (a secret menu, a significant gift certificate). Once you do that, not giving that gift to a friend feels selfish.
Paying me to refer you rarely works, because you’re not just asking for a minute of my time, you’re asking me to put my credibility on the line.
Understand that low-risk referrals happen more often than high-risk ones, and either figure out how to become a low-risk referral or embrace the fact that you have to be truly amazing in order to earn one.
and
Be worthy. Not just in the work you do, but in your status in the marketplace. I’m far more likely to refer someone with a back story, someone who’s an underdog, or relatively unknown. That’s why saying “thank you” in deeds (not so much in words) goes such a long way.
