5 Tips on Growing Your Business Through Word-of-Mouth Marketing

by Kathryn Hawkins

2 min read

Like most small business owners, you probably spend considerable time and money on marketing to attract new customers. But it may be worth spending more of your efforts focusing on building referrals instead: According to a global Nielsen survey, word-of-mouth marketing is the most trusted form of advertising, and customers were far more likely to buy a product that had been recommended by a friend than one they’d seen an advertisement for. Here are some tips for getting your business’ name on the street organically and bringing in new customers… via your old ones.

  1. Network, network, network. The importance of building a good network of business contacts can’t be overstated. Join your local chamber of commerce and attend events frequently, giving a business card or two to everyone you speak with. Be sure that you have a good elevator pitch about what your business does, but don’t get too sales-y—making a new connection is the important part; you can always follow up later to talk business. You might also consider joining a group that’s specifically targeted at building referrals, like BNI. (Check out this post to see whether BNI is a good fit for you.)
  2. Focus on great customer service. Customer service should be a prime concern for any business owner, but when it comes to building referrals, you’ll want to go above and beyond what’s necessary. For instance, if you own a restaurant and a customer comes in requesting a gluten-free menu option, don’t just tell her to get a salad — talk her through the entire menu, discussing the ways you can customize each item to suit her needs. She’ll likely be so impressed by your concern that she’ll recommend your business to all of her friends.
  3. Be direct. When a business contact asks if there’s anything she can help you out with, don’t be afraid to ask for a referral. And be specific: If you’re a real estate agent and are looking to sign with clients who want to sell homes worth between $400,000 and $600,000 in the Chicago metropolitan area, give her the full rundown so no one wastes time on off-base referrals.
  4. Pay your customers to tell their friends about you. Consider offering a specialized incentive program for existing customers: For example, if you own a hair salon, give your existing customers 10 percent off their next cut when they send a new customer your way. The upfront cost for a new customer may seem steep, but consider how much you’d otherwise spend on advertising with no guaranteed return on investment. You’ll also find that word-of-mouth marketing nets better customers: A study focusing on the referral program of a German bank found that referred customers are more profitable and more loyal than customers acquired through other means.
  5. Do as many favors as you can. When it comes to your contacts, focus more on what you can do to help them than on how they can help you. Be generous with introductions and advice, and even consider joining nonprofit boards for causes that are important to your business associates. Forget about an immediate expectation of quid pro quo. Simply focus on being as helpful as possible, and you’re likely to see your efforts pay dividends in the form of referrals in the long run.

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