for reference only

A popular theme these days in the business world is to say that you are a “referral only” business or that you focus on “word of mouth” marketing. Now what does reference only really mean? There are a few different schools of thought.

Some believe that it is a status in business to achieve. It provides a feeling of exclusivity and doing any type of marketing would be seen as a kind of contamination of this “club”. Members of this club focus most of their attention on attending networking meetings with the goal of building a circle of power that refers to them regularly. For a strategy like this to be successful, one must constantly be in front of those who have the power to refer. Referrals in this strategy can come and go depending on the whims of the networking groups the business professional belongs to.

There are others who believe that the only way to achieve a referral-only business is to have a strategic marketing plan. These business professionals build relationships with previous clients and referral partners through various marketing methods, such as newsletters, e-zines, cards, letters, small gifts, and more. Through systematic means, they can achieve predictable and traceable benchmark results.

Now, what about word of mouth marketing? It can be a great tool, but I warn you that on its own it is very dangerous. Why? Because of the phone factor. What is the phone factor? The phone factor is the result of all the phone games we played as kids.

Remember how someone started with a sentence and when they went around the circle it was completely different? Well, when you rely on word of mouth as your only marketing tool, you’re tempting the fate of the phone game in a sense. Someone is bound to completely screw up your message. It is the nature of humanity.

But is word of mouth advertising completely useless? No, but it should be the byproduct of your marketing and it should be delivered in a carefully crafted message over and over again so that the person trying to help you knows exactly what to say about you. Otherwise, you can do much more harm than help.

Those who believe that word-of-mouth and referral-only advertising are a realistic alternative to a well-thought-out marketing plan that is strategically implemented are missing out on a huge amount of potential profit. Just like an ostrich sticking its head in the sand doesn’t make you invisible, saying you’re only by referral doesn’t make you invisible if you don’t have a strategy for building those referrals.