Referrals and Word of Mouth: The Holy Grail of Building Your Business
By Alan Young, Co-Founder and President of Puzzle Partner
"People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising." – Mark Zuckerberg, Facebook
One of the biggest problems plaguing most outbound lead generation tactics is that they often fall short of executive expectations. The only way many of these methods can fill your sales funnel is if there is a large enough pool of relevant prospects to target, and thus draw from. Of course, there are some outbound lead generation scenarios that work, but the percentages are relatively small. The other concern is that too many companies forget to factor in the soft costs of lead generation efforts and consider a 'lead is a lead' no matter where it comes from.
So how can you cultivate your business and maximize your marketing ROI? Marketo recently did a study which found that referrals were the best source of leads - and ultimately have a better close rate than any other channel (see chart). This should shed some light what companies need to focus on as they start out of the gate and grow.
MarketShare also stated that word-of-mouth has been shown to improve marketing effectiveness by 54%. Whether you call this referral marketing or word-of-mouth marketing, in the end, it is all about doing a great job servicing your customers, so they feel compelled to tell others.
Growing your business through targeted referrals is the 'holy grail' of new business development. In this day and age of reviews and user generated content, having a baseline goal of increasing your service levels to achieve referrals should be at the top of every organization's list of priorities, and far less challenging when your entire company is aligned with this goal. From the executive boardroom right down to the front lines, everyone should be aiming at finding ways to increase referrals.
One aspect of referral marketing that is becoming increasingly significant is in the area of advocacy. Companies need to nurture clients who are passionate advocates of their brand or products. Even B2B companies are seeing significant gains from building up their base of fans:
- 91% of B2B buyers are influenced by word-of-mouth when making their buying decision. [USM]
- 61% of IT buyers report that colleague recommendations are the most important factor when making a purchase decision. [B to B Magazine]
- 56% of B2B purchasers look to offline word-of-mouth as a source of information and advice, and this number jumps to 88% when online word-of-mouth sources are included. [BaseOne]
At Puzzle Partner, we spend a great deal of our time working with our clients to develop customer success stories and case studies. Case studies are a powerful asset when it comes to establishing proof that what you are offering is valuable and will work for them as well. Whether you are a grassroots startup or an established brand, you need to garner testimonials, gather tangible results and explore data from your best clients, then use it to develop content that drives leads. Panacea is when your products are purchased based on the influence of referrals rather than having your sales team relentlessly work the phones, send out email blasts, and use other forms of lead generation methods that have a low percentage of success.
Remember: while word of mouth is something your clients share, it is not out of your control. What you do (and don't do), has an enormous bearing so being proactive is the key. Keep on delivering exceptional experiences that exceed expectations and the referral portion of your lead generation strategy will continually grow, producing increased conversions and revenues.
About Puzzle Partner
Puzzle Partner Ltd. is a boutique marketing agency that specializes in helping hospitality and travel innovators achieve winning performance and dramatic growth. We are experts at combining strategy and tactical execution in a way that doesn't just maximize a company's potential; it redefines it. By delivering relevant, proven and effective marketing services and public relations rooted in the skills of our people and tested through real-world experience, we help our clients gain visibility, raise their profile and ultimately increase their sales revenues. To learn more visit puzzlepartner.co.
Alan YoungMore from Alan Young
About Puzzle Partner
Puzzle Partner Ltd. is a boutique marketing agency focused exclusively on complex B2B initiatives for the travel and hospitality technology industry. We are experts at combining strategy and tactical execution in a way that doesn't just maximize a company's potential; it redefines it. By delivering influential content, marketing services, and public relations rooted in the skills of our team and tested through real-world experience, we help our clients gain visibility, raise their profile and ultimately increase their sales revenues. We incorporate a holistic blend of paid, earned and owned media, along with creative services, into an integrated communications strategy to drive brand awareness ahead of competitors and deliver impactful business results.
To learn more visit puzzlepartner.co.