Every business I come in contact with and ask them where do they get the majority of their new business from, ineveitably they say “word-of-mouth”. If you are one that actively records where your leads come from, I’m sure it would support this claim. In fact, from my dealings I have found that on average, 60-75% of new business can be attributed to WoM and customer referrals. Sometimes much higher.
It is the cheapest form of marketing and one that can be harnessed by delivering the customer a better solution or service than the next competitor. I’ll do a little shout out here for a coffee shop that I think is the best one in Vancouver – hands down. Almost every morning I visit a cafe on my way to work and “no!” – it’s not that one with the green mermaid from the Emerald City. The place is called Prado located on Commercial Drive in Vancouver. They serve coffee and espresso using organic fair-trade beans from 49th Parallel Roasters in a cafe with minimalistic decor, free wi-fi, and friendly service. That’s all great, but why do I like them? Because their coffee is damn good! Effective WoM always starts with a great product. The free wi-fi, the trendy white walls, smiling faces, globally-conscious beans are all great add-ons. Together, they compliment the core product (tasty coffee) to deliver a greater experience to the customer (me). The combination makes me want to rave about them, as I’ve done here (sometimes reluctantly so that I don’t have to face any ridiculous line ups from too much boosting). There is nothing like third-party endorsements to warm potential customers up to your business.
If you are in the early stages of your marketing and have a limited budget, focus first and foremost on how you can get new business through WoM. An excellent product with complimentary services that your customers value is a great start. If you’re not sure what those services should be, ask your customers… they will give you all the ideas you need and in turn, rave about them to others.
Rajan is the founder and Editor-in-Chief of BIG Marketing for Small Business. He's an award-winning marketing strategist who is passionate about branding, digital marketing and social media. He spent nearly a decade as the marketing executive at global IT firm Peer 1 Hosting and was instrumental in their explosive growth.