For several years, the word-of-mouth method used to happen offline. For smaller industrial businesses looking to drive new leads, referrals from word-of-mouth tactic is an effective tactic, allowing them to strengthen brand awareness organically. However, as time passed by, these businesses started to realize that relying on just word-of-mouth can dampen their lead generation efforts.
On top of that, given the escalating popularity of social media and the digital shift in sales and marketing, traditional marketing and old-school referrals have been negatively affected. Now, instead of asking someone in person for a product or brand recommendation, most people opt to post on their social media accounts. This way, they can just wait for anyone to comment on their posts. Either that or they are likely to perform a Google search.
In this article, we will be discussing some of the main reasons why word-of-mouth referrals provide the best results when supplemented with an inbound marketing strategy.
One way to avoid risk is to expand to new markets, however, doing so by relying only on organic word-of-mouth referrals can be tough. After all, customers who refer your company to other field professionals only have so much connection. While your current clients will help you in getting recognized as a trusted brand, they’re likely to be referring you to people within their industry and region. And if this is the case, then eventually, the results of these referrals will sooner or later dissipate. Relying solely on your customers for lead generation is like driving your business to be confined in just one specific industry. Consequently, it will gravely limit your chances of expanding to new markets and nurturing your company into new localities. Also, it pushes your business on the cliff should your main industry encounters problem and crisis.
Another downside of using only word-of-mouth as your marketing tactic is that you’re making your brand look like you’re only depending on your clients to spread the word about your brand instead of taking the initiative yourself. This could lead to incredibly inconsistent sales since the number of leads coming from referrals varies mostly every month. Moreover, no matter how much your customers love and appreciate your products, they don’t keep your brand top-of-mind all the time because after all, they have their own matters to focus on. You may have the most loyal and trustworthy clients, but keep in mind that they are not your salespeople. You know your business like the back of your hand more than anyone else. Hence, it’s only you and your team who can best market your offerings.
Monitoring user activity and analyzing how potential leads interact with and respond to your different marketing tactics--e.g., email, SEO, website, PPC, or social media--is imperative for growing your company and executing necessary modifications. When you have this data, you can see what potential leads are looking for, how they’re engaging, and what they’re downloading with your brand. However, with organic word-of-mouth referrals, you don’t have this opportunity, thus, making it hard to determine which aspects of your business have to be adjusted or improved. On the contrary, customer testimonials can still make a world of difference so long as you have a strategy to collect them, analyze their responses, and promote it. Without a strategy and the data, it’ll be a struggle to scale your business and come up with the right business decisions.