Saturday, September 08, 2012

One Marketing Secret that Drives Over 50% of New Traffic to Your Business 31/101

Word of Mouth Marketing - Marketing Secret 31

Referrals Beat Every Other Method as a Source for New Clients, and Excellent Quality Clients at That

I make my living helping small businesses figure out the best way to increase sales.   My services are much more necessary for helping with print, trade shows, packaging, new product development, blog, websites, videos, social media, and email than they are for the most effective tool in marketing for generating new business.  WOM - Word of Mouth.

However, I spend huge amounts of time convincing my clients to do the very things that will increase referrals.  You can read about them throughout this post and throughout this blog.

In fact you can read the first 30 successful marketing elements in a small business here.  With #31 in the series we now move to building on that foundation with specific approaches to delivering phone calls, foot traffic, and online activity.  The goal will be to go from the most effective for the most businesses to the least effective.  Effectiveness would be defined as those things which provide the highest return on investment of time, energy, and cold, hard cash. 

There are certainly times when you will want to undertake marketing methods that have a low ROI, but still create absolutely certain results at appropriate times.  Sometimes the ROI is not easily identified, but can only be seen over a very long term.  For our purposes, we will look only at high, immediate, ROI as the criteria.

With that introduction, we return to the number one source of new business for almost any new business.  All the statistics show that at or above 50% of new customers are showing up at small businesses because of this factor.  My own conversations with 1000's of companies would show the same results.  Anywhere from 50% to almost 100% of new customers are derived from word of mouth (WOM).

The interesting thing about WOM is that most of the cost of traditional WOM is free.  WOM is most commonly driven by things like quality, customer service, and overall experience.  Achieving those three elements in a business may require the hiring of better people, training investment, use of better materials, and spending on fixtures and systems.  Almost anyone who has studied these kinds of business costs has come to the conclusion that the savings from scrap, obsolescence, rework, and lost customers alone pay for these expenses and more.  That they are also responsible for increasing sales and profits through WOM is basically icing on the cake.

    32.    Creating Effective Word of Mouth (WOM) About Your Customer Service Edge
    33.    Experiential Marketing
    34.    Amazing Products and Services?  Grade Yours!    
    35.    Amazing Follow Up.  Are Your Customers Out of Sight, Out of Mind?
    36.    Stay in Touch to Create Maximum Word of Mouth
    37.    Equipping Your Clients to Recommend You Can Increase Word of Mouth
    38.    Find the Influencers in Your Community to Spread Word of Mouth
    39.    7 Ways to Thank Those Who Send You Business to Build WOM
    40.    Do you Cultivate Customers, Clients, or Fans?

Virtually every company I have ever discussed marketing with will tell me one minute that WOM is the number one source of new clients, but then assume that the future will depend on the internet or some other factor.  My first thought is always, "how do we capitalize on what is already working."

Obviously, Word of Mouth is no longer only the traditional case of one person telling another in a face-to-face or telephone conversation.  There is now an entire industry based on internet reviews and social media that has pushed WOM into something quite different.  I will go out on a limb however, and even offer you the chance to tell me I'm all wet.  Traditional WOM can provide all the potential that it always has.  And if the company is doing what it should to create traditional WOM, the online version will do quite well, thank you very much.  Online WOM or WOMM will be discussed in future chapters.
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