Why Word-of-Mouth Marketing Isn’t Good Enough

September 3, 2020

Word of mouth marketing

When speaking to clients and potential clients, one of the most common reasons business owners refuse digital marketing is because they say that all of their business comes from word-of-mouth. Although this is a good sign for steady income, it does not always last. It also does not help your business grow further and reach its potential.

Referral marketing is very important for the widespread recognition of your business. It is also very effective as it is a free form of advertising. The problem is when businesses rely solely on this method. A Harvard study has shown that on average, even if clients express their satisfaction with your company, only about 35% will actually refer your business to someone else. Very few of these referrals actually generated interest. About 12% of the referrals actually contact you. Only 8% result in profitable clients. This margin is extremely small and if your business is still profitable under these circumstances, having a large online outreach might just take your business to another level.

Word-of-mouth marketing is also very limited. A connection can only go so far. Eventually the tap runs dry and it is time to start looking for brand new clients. Without a strong online presence, this becomes very difficult. Instead of waiting around for new connections, be proactive and get your business out there. Even if you are well liked and known for your customer service, these issues will always be a factor for word-of-mouth marketing.

Another large factor to consider is the way in which referrals are communicated. Unlike digital marketing, referral marketing offers no input from you or your business. This means that when customers are discussing your business, they can only describe it from their perspective. Any issues that came up, or any misunderstandings will also be mentioned to many people. This can severely damage your brand. One error can lead to a large amount of lost business. This is why relying on referrals can be very dangerous.

When you are able to get your brand online and in front of clients, you are able to represent it the way you want, and you have full control over how it is communicated. Make sure that the primary resource of finding information about your business is coming directly from you, from your website, and from your online presence.

The important thing to remember is that word-of-mouth is always working; it just might not always be working for you. Again, it is awesome to have customers refer you to others. If this is your case, then clearly you are doing something right. If growth and more business is what you are looking for, then why not get even more people talking about you by getting your brand out there? Digital marketing and maintaining a strong online presence are the best tools for you to explore.

Picture of Adam Vanderkolff

Adam Vanderkolff

Adam is entering his fourth and final year at Wilfrid Laurier University in the Communications program. He has experience working as a manager at Radio Laurier, and writing feature stories for a local newspaper here in York Region.

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