Word of Mouth Marketing vs Referral Systems

At first glance, Word of Mouth Marketing and having a Referral System in place appears to be similar. but in truth, one is haphazard and the other is proactive and managed. 

Most small businesses rely solely on Word of Mouth Marketing (WOMM) to generate new business. As a result, the struggle with:

• Inconsistent deal flow (up one month, down the next)
• The "feast or famine" roller coaster of booms and depressions
• Worrying where your next deal is going to come from

By virtue of organization, referral systems allow you to:

• Build a steady, consistent, reliable flow of new business
• Predict and control your income (like turning on a faucet)
• Sleep like a baby (with peace of mind), knowing your revenue is rock solid

Doesn't that sound a whole lot better that leaving your family's livelihood and future in the hands of chance?

Referral Systems Are The Answer

By definition, a system is, " A set of detailed methods, procedures and routines created to carry out a specific activity, perform a duty, or solve a problem." - BusinessDictionary.com

These systems can be simple or complex. For any small business person, these can be a couple of actions that are carried out as a routine. These can be:

• Having customers check in on Facebook or Yelp when they visit. Give discounts or awards when they do so.
• Asking for referrals at the point of sale.
• Creating individualized content for your clients, such as Snapchat or a YouTube video that would inspire a share or referral.
• Drip feeding all your past clients with informative emails that can be shared on social media.
• Offering referrals cards which look like credit cards. There is a great company that offers these types of cards, VivaConcepts.com.

Referrals Must Be Measured 

"What gets measured, gets managed." - Peter Drucker

Having built and managed referrals systems for all of my sales and marketing career, you must measure the referral system. For without measurement, we devolve back to word of mouth marketing. Measuring assures accountability. 

I suggest you keep weekly or monthly statistics. Now must begin to document the systems, regardless how simple or easy they may seem to be. Documentation with checklists and lists of resources and "how to" ensures that the systems can be taught and replicated in the actions of others. 

Here is the sequence:

• Develop a system.
• Measure and manage it consistently.
• Document it so that others can implement these actions as a routine.
• Continue to develop and perfect it over time, and with experience.
• Repeat.

Systems are the solution to building a business with a high level of profitable customers being developed and serviced.