Last week, I said that relying on passive word-of-mouth advertising is one of the worst things you can do; but active, intentional, and deliberate word-of-mouth is the best form of advertising.
People want to believe in passive word-of-mouth because it requires no effort. Besides, it’s great for the ego to convince yourself that people are falling over themselves to do business with you. Unfortunately, it’s not so great for your bank account.
Would you like the opportunity to get more word-of-mouth business? The trouble with opportunity, as someone once said, is that it shows up in overalls disguised as hard work. Generating a steady stream of quality word-of-mouth referrals requires effort. Here are two ways to make that happen.
Offer an Incentive Everyone will Want
There once was an insurance agent who’d tried the typical incentive of offering cold, hard cash for any referral sales. I mean, everyone wants money, right? So it’s only logical that offering a cash reward or a gift card should generate plenty of referrals. But, as this agent found out, it doesn’t.
But it also turned out that he enjoyed winemaking as a hobby, which he made from a small vineyard on his property. So he decided to create his own “limited stock” private label and began offering a bottle in exchange for referrals.
Besides being scarce, the wine was apparently quite tasty, and people began looking for others they could refer just to get a hold of a bottle. So, ironically, he created more word-of-mouth buzz around his referral incentive than his actual business.
It’s human nature that the less available something (or someone) is, the more we tend to value it. If you can offer an incentive that’s unique or rare, the scarcity principle kicks in, and you might find people clamoring to bring you referrals in order to obtain what you’re offering in exchange.
Create a Lead-Sharing Group
Referral incentives are nice and can general much good will. But the real powerhouse for generating continuous referrals is the lead-sharing group.
In The Truth About Word-of-Mouth Referrals, SitePoint’s own Georgina Laidlaw says this:
It’s not impossible for you to do a good job for a client, and receive a lead for another job as a consequence—but it’s not likely, either. What you really need, if you’re going to be able to actually rely on this as a means of attracting clients continuously, is a network of people.
She goes on to say that you ought to build a close-knit group that’s “willing to collaborate to pass on referrals.” That’s the definition of a lead-sharing group.
Networking groups like your local Chamber of Commerce are good to belong to. The difference is, while they do a great job providing the environment for networking and word-of-mouth to occur, they do nothing to guarantee it. Belonging to a lead-sharing group requires that you regularly and continuously bring leads to share with other members.
Another advantage is that these groups only allow one person from each type of business is to join. That means you’d be the only web designer or developer.
You can join an existing organization, like BNI, but why not start your own? It’s not rocket science. It can be as informal as finding a handful of like-minded business people who sell to the same target market as you. But you’ll get better results if you set expectations on attendance and the number of leads each member is expected to bring to each meeting.
The advantage of starting your own group, as opposed to joining an existing one, is that as the group grows, your reputation as a business leader will grow with it. And guess what? So will your business.
If the thought of starting a group all by yourself seems too intimidating, consider partnering with a like-minded business associate. After all, two are better than one.
Former owner and partner of web firm Jenesis Technologies, John is currently Director of Digital Strategy at Haines Local Search, a company providing local search marketing solutions to SMBs, including print and Internet Yellow Pages, web design, and local SEO. When not working or spending time with his family, John offers great sales and marketing advice on his blog, Small Business Marketing Sucks.