Word of mouth is a prime marketing tool for small business owners

By February 15, 2018 Blog No Comments

One of the bigger challenges in a small business’ early days is attracting attention. If marketing and advertising budgets are small — or nonexistent — the business is at an immediate disadvantage.

Yet there is power in word of mouth, both in old-fashioned ways of people spreading the good news about a new business and more modern methods of sharing opinions online and through social media.

A study by Alignable, as reported by Entrepreneur, shows the importance of word of mouth. The survey asked “What’s the best way to acquire local customers?” The overwhelming answer — with 85 percent of the 7,500 small business owners surveyed — was word-of-mouth referrals. The other answers (Google/Facebook ads, radio ads, newspaper ads and direct mail) pale in comparison.

Here’s a look at how entrepreneurs can encourage customers to spread positivity about a new small business.

 

Excel at customer service

One criticism often heard regarding a new business is that of general disorganization. Take a restaurant just getting off the ground. If the wait time is longer than expected, if there is any menu confusion or if there is a negative attitude among any employees, customers will take note and potentially use that to determine if a repeat visit is desirable. On the other hand, a new business that places a premium on customer service may make an impression that creates an instant bond.

Susan Ward explores this in a story for The Balance, reporting on this statistic from a ClickFox survey: “More than half of disgruntled customers will tell their friends and family about poor customer service experiences, and 32 percent will take their business elsewhere.”

“Show your customers that they are important to you and treat them with the courtesy, respect and interest that you would hope for in their place,” Ward writes. “Listen to customer complaints, learn from them, and train your employees accordingly. Follow these practices consistently, whether you run a retail store or a website, and positive word of mouth is sure to follow.”

For businesses to make a strong connection with customers, it may require going even further than what we generally regard as good customer service. Kimberly de Silva discusses extra efforts in a story on Entrepreneur.com.

“Word-of-mouth is triggered when a customer experiences something far beyond what was expected,” she notes. “Hence, you need to delight and please your customers with their entire experience. It’s important to remember that this is not so much about gifts and promotions, but about how you treat and communicate with the people who drive your business growth.”

 

Online reviews

Just as the Internet and social media have altered the course of many industries, they have done the same for customer feedback. Online reviews — through Yelp, Facebook, travel websites and many others — are a primary way to opine and to see what other customers are saying about a business’ products, services and customer service. As this story by DashBurst on smallbiztrends.com notes, positive reviews are obviously a boost for a business, and the opposite is naturally true for negative ones. But also beware of a lack of online reviews:

“Something else to consider as a small business owner is that having no reviews at all can also have a negative impact on your business’ potential. Today’s consumers are savvier than ever. When the average person is glued to his or her smartphone, you can bet your bottom dollar they’re Googling your business before using it — especially if they’ve never heard of it before. Finding little to no information tells them that it’s either a new business and therefore they shouldn’t subject themselves to being the proverbial ‘guinea pig.’ Or worse … people care so little about you that you’re not even on the radar. Yet just a few positive reviews can reassure potential customers that you’re worth checking out.”

 

Networking

The power of networking is significant, and new small businesses should be on the lookout for opportunities to connect with peers and professional groups. This is a natural way for business owners to share their stories with others who could become clients or collaborators. Writing for QuickBooks, Kathryn Hawkins notes how this can become effective word-of-mouth marketing.

“The importance of building a good network of business contacts can’t be overstated,” Hawkins says. “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.”

 

Referrals

If a business’ connection to customers is strong enough, it can be worthwhile to explore the idea of asking for referrals. Some customers may be put off by this idea, and view it as an unwelcomed task that they would have to fit into their schedules. But those who are more enthusiastic may be willing to spread the word. Anita Campbell discusses ways to “consciously develop initiatives that get happy customers talking” in a story for smallbiztrends.com. Among her referral tips:

  • Ask them: “Many customers are willing to give referrals — but they are busy. You have to nudge them, without irritating them. This could be done in a phone call saying, ‘Glad you’re happy. Feel free to refer any colleagues to us — we’ll take good care of them.’ Or send a followup letter or email with a thank you and gentle nudge.”
  • Use referral cards: “Have a preprinted card your customer can leave with a friend. It helps even to leave behind several business cards so they can hand one to a neighbor …”
  • Provide links: “If you deliver a beautiful email newsletter, make it easy for people to share that and at the same time you may gain a new subscriber who eventually may become a customer.”

Small business owners can also sweeten the deal with incentives, some sort of perk for customers who help with referrals. As Marcia Layton Turner writes for Forbes, this can include gift cards or gift baskets — “something you’re pretty sure your customer will like.”

“Some businesses give the gift whether the customer buys anything or not, as a sign of appreciation,” Turner explains. “That’s the smart approach, which gets customers thinking about who else they can refer, in order to enjoy more thank-you gifts. … Offering an incentive for simply making the referral also takes the onus for selling your services off the customer and puts it back on you, where it should be.”

 

Cleanliness and organization

It’s not hard to turn off a customer in a brick-and-mortar business with a poorly thought out presentation or less-than-desirable conditions. The same concept can apply to a web client: If the purchasing experience is difficult and the navigation is confusing, the customer will likely look elsewhere. And when these customers tell stories of their experiences, the negativity toward the business can grow.

In Ward’s piece for The Balance, she writes of hearing a rumor about unsanitary practices by a restaurant: “Whether or not this is a true story, I’ve never been to that restaurant since; I can’t help but think of it as dirty and unsanitary. See how bad word of mouth works?”

“Good word of mouth travels, too,” she says. “People will tell other people how organized your shelves are, what state your restrooms are in, or how pleasant your waiting room is. To get good word of mouth building about your small business, think about what makes up a pleasant customer experience in your case and make sure that all the elements that would contribute to such an experience are in their best shape. On the web, that means things such as having search functions and site organization that make items easy to find and visible information on ordering and shipping and returns.”

 

Generosity and involvement

When a small business gets involved with community organizations, there is an opportunity for positive word of mouth. Helping others is its own reward, so it’s good to put the highest priority on the work done by these organizations. The business may naturally attract attention for its connection to these positive efforts. In Hawkins’ QuickBooks story, she advises taking an overall helpful approach in business, and to “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,” she says. “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.”