Is Word Of Mouth Marketing Slowing Your Business Growth?

Whenever I speak to business owners, the topic of conversation invariably turns to marketing. When I ask how they market themselves, “word of mouth” almost always comes up as the primary or only form of marketing they rely on.

This used to shock me but now I’ve come to expect it. Whilst word of mouth marketing is powerful, it’s an extremely slow and unreliable way of building a business. Assuming you do everything right, it can take many years, even decades, to build a successful business on the back of word of mouth alone.

Word of mouth or referral marketing is the business equivalent of a free lunch. Sure it’s nice when it comes your way and you appreciate it, but do you really want to rely on it to feed your family?

By being solely reliant on word of mouth, you’re putting the fate of your business in the hands of others – hoping they both like you and remember you often enough to regularly send new business your way. This is an extremely dangerous path to be on. If it’s similar to what you do in your business, now’s the time to start building a much more robust marketing system.

Building An Unbreakable Marketing System

Having only a single source of new business is extremely dangerous. Being unable to control that source makes it doubly so.

I advocate having at least five different sources of new leads and new customers. Further I recommend that most of these five sources be in paid media i.e. they cost you money to market yourself. The reason paid media is so important is twofold.

Firstly it’s extremely reliable. If I pay a newspaper to run my ad, there’s an extremely high probability the ad will actually be run. It’s much harder to get such reliable and consistent lead flow from free marketing methods such as word of mouth.

Secondly paid marketing forces you to focus on return on investment (ROI). If a paid marketing method is not working, you cut it. You don’t waste further time or money on it. Whereas when the marketing method is nominally free, such as with word of mouth, we tend to be less ruthless and often end up wasting huge amounts of time because we didn’t have to pay anything upfront. However there’s an opportunity cost which, if careful analysis is done, often translates to a surprisingly large amount of real money.

The art and science of being able to consistently turn a dollar of paid advertising into a dollar or more in profits through direct response marketing will make your business resilient and can help you turn the tap on to rapid business growth.

Boosting The Reliability Of Word Of Mouth

While we don’t want to be solely reliant on word of mouth, we do want to amplify it’s power and increase it’s reliability where possible.

One of the best ways I’ve seen this done is by straight out asking for referrals from customers for whom you’ve delivered a good result. It’s amazing how many business owners hope for referrals yet rarely ask for them. Something as simple as:

“Mr Customer, it’s been such a pleasure working with you. If you know anyone who’s in a similar situation as yourself we’d love you to give them one of these gift cards which entitles them to $100 off their first consultation with us. One of the reasons we’re able to keep the cost of our service low is because we get a lot of our business through referrals from people like you.”

See what’s going on here:

  • We’re acknowledging them and appealing to their ego.
  • We’re not asking them for a favour but instead offering something valuable they can give to someone in their network.
  • We’re giving them a reason why they should give us referrals – a reason that directly benefits them.

By putting a system around generating referrals, we’ve dramatically increased the reliability of word of mouth marketing. And while not everyone will give you referrals, many will and it sure beats just silently hoping.

Relying on the goodwill of others is not my idea of being an entrepreneur. By creating multiple sources of new leads and increasing the reliability of word of mouth marketing, you take back control of your lead flow and build a solid foundation for rapid business growth.

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About the author: Allan Dib


Allan is a serial entrepreneur, rebellious marketer and technology freak.

He has started, grown and successfully exited multiple businesses in various industries including IT, telecommunications and marketing.

His last business was in the hyper-competitive telecommunications industry. It went from startup to four years later being named by Business Review Weekly (BRW) as one of Australia’s fastest growing companies – earning a spot in the coveted BRW Fast 100 list.

Allan writes regular columns in several online and print publications and appears as a guest speaker at technology, business and marketing events.

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This article was first published by Allan Dib