What’s the Word? Why Customer Referrals Are So Vital

LorettaJones Insightly FULLby Loretta Jones

Despite all the focus that goes into advertising and marketing campaigns, there’s nothing like word of mouth to generate interest in products and services and influence customers.

Industry studies show just how much power there is in word-of-mouth recommendations. For example, a survey of 2,000 Americans by Nielsen’s Harris Poll Online and Business 2 Community published in March 2016 showed that a huge majority (more than 80 percent) seek word-of-mouth recommendations when making a purchase of any kind. The report also shows that word-of-mouth is not limited to specific industries or demographics, and that when people share or talk about brands on social media, there is a significant link to buying behavior. And a poll by Alignable, a social network for small business owners, showed that 64 percent of more than 1,000 business owners indicated that “word-of-mouth referrals” are the most effective way by far to acquire new customers.          

The fact is, people genuinely value and trust the opinions of family members, friends, neighbors, co-workers and even social media contacts. Considering this, marketers need to find ways to encourage their customers to spread the word about their brands. This is not to say there’s no value in other marketing and ad campaigns, of course. However, if companies can figure out a way to generate word of mouth, they stand a much better chance of seeing revenue increase along with the customer base.

When you think about it, a company’s satisfied customers are likely to be its biggest fans. Who else is better suited to tell others about how great its products or services than customers are? Word-of-mouth is not limited to discussions around the dinner table, at the office water cooler or across the backyard fence. It can include things such as online reviews through sites like Yelp, Angie’s List, TrustRadius and others. Positive ratings also come through postings on social media sites such as Facebook and Twitter, which can help drive purchase decisions. Think about the impact book reviews on Amazon.com or hotel reviews on Expedia.com can have on a customer’s buying decisions.

One of the best aspects of word-of-mouth referrals is that they are free. Companies can offer discounts to customers who are willing to refer others or put in a good word online. But for the most part, the most valuable word-of-mouth referrals are voluntarily shared by customers. If they’re happy with the results, they’re often happy to spread the word.

Get everyone talking about you

So how can companies make sure they are taking full advantage of word of mouth opportunities to generate more business? One way is to keep in touch with customers so they remember you. That includes actions such as sending email communications that ask about recent transactions you’ve had with the customer. Ask them what they think of the product or service, and how well they were treated by your employees.

You can also highlight upcoming events, promotions and information about products or services that might be of interest to them or people they know. Additionally, ask other local business owners to promote your business to their customers, and you can do the same for them. These companies are likely already trusted sources for local business information, so form a mutually beneficial relationship to help generate word-of-mouth traffic.              

Employees can also have a big impact on word-of-mouth efforts. Make sure your team understands the importance of customer referrals. If there’s a company culture that reflects a high level of personalized service, customers are probably more likely to spread the word.

And finally, technology can play a key role in leveraging word of mouth. For example, by centralizing customer data, companies can help ensure there is smooth customer engagement from every employee. To create and maintain personal relationships with each customer, take into account every touchpoint and look at them as opportunities to deliver top-notch customer experience. That requires the ability to locate and access important customer data quickly, wherever the data resides. Solutions such as customer relationship management (CRM) can help companies move prospects through the sales process more easily and create long-lasting relationships with them. A CRM can also help companies determine customer preferences, such as when they want to be contacted and by which method.

By paying close attention to the wants and needs of its customers, a company can create a distinct advantage over its competitors. It can also increase the likelihood that customers will go out of their way to spread the word about how pleased they are with the service. That’s how companies can leverage the power of word of mouth.

Loretta Jones is the vice president of marketing at Insightly, a San Francisco-based SaaS CRM application for small businesses. With more than 15 years of experience in marketing, including marketing strategy, communications and lead generation, Loretta has grown marketing programs for both SMB and enterprise customers at Coveo, Adobe EchoSign and several other companies. She holds a bachelor’s degree from Brown University.

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Loretta Jones

Loretta Jones

is the vice president of marketing at Insightly, a San Francisco-based SaaS CRM application for small businesses. With more than 15 years of experience in marketing, including marketing strategy, communications and lead generation, Loretta has grown marketing programs for both SMB and enterprise customers at Coveo, Adobe EchoSign and several other companies. She holds a bachelor’s degree from Brown University.
Loretta Jones

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Loretta Jones

Loretta Jones

is the vice president of marketing at Insightly, a San Francisco-based SaaS CRM application for small businesses. With more than 15 years of experience in marketing, including marketing strategy, communications and lead generation, Loretta has grown marketing programs for both SMB and enterprise customers at Coveo, Adobe EchoSign and several other companies. She holds a bachelor’s degree from Brown University.