You may be thinking: Since I'm not asking anybody to refer me, word-of-mouth marketing isn't something I need to concern myself with. If I provide good products or services and my customer service is up to par, I'll naturally get more customers by word-of-mouth. Why bother with plans and strategies? Why spend all that extra effort on getting referrals? I'm getting word-of-mouth every day, and it's not costing me any time or effort.
Yes, you're getting word-of-mouth every day. It just may not be the good kind. The message you're sending may be unclear or too vague. It may even be negative.
"Negative?" you may be asking. "But I have plenty of satisfied customers."
While you have lots of satisfied customers, they're not the ones doing the most talking. You may have 100 satisfied customers for every one customer who leaves your shop less than happy, but guess who talks loudest and longest? It's that demanding, unreasonable customer who thinks you're a lousy tailor because you wouldn't take care of her snarling, yapping cairn terrier while she went next door to the bakery ("Don't go to that tailor; he was so rude to me."). Or the customer who came in on the one day of the entire year you had to close early for an emergency ("That store? Why, it's never open.").
Negative word-of-mouth has legs. A study conducted in Texas revealed that the average dissatisfied customer gripes to 11 people about his experience, and these 11 in turn each tell five others. That's 66 or more horror stories about one unhappy trip to your store. Ask yourself if your average happy customer makes sure 66 people hear about your great service. Of course not. Would business be easier if they did? Of course, but they don't.
Also, passing on the gripe from a single dissatisfied customer to the next 55 takes some time, which means that the negative word-of-mouth feedback is "out there" a lot longer.
What's the lesson here? Good customer service is important because it reduces negative word-of-mouth. But by itself, good customer service won't generate enough positive word-of-mouth to build your business. So it's up to you as the business owner to ensure the positive counters the negative.
Even if you discount the occasional disgruntled ex-customer, your word-of-mouth may be so vague as to be useless: "Good tailor, eh? What does he do besides alterations? Does he do reweaving? You don't know?" Or it may be misleading: "Well, he has a full lineup of men's clothing, but I don't know whether he does custom tailoring or alterations. It may all be ready-to-wear."
Positive word-of-mouth that's inaccurate or aimed at the wrong target market may hurt your business as much as negative word-of-mouth. Suppose somebody gets the idea that you're in the trucking business when you're actually selling trucks. The aggravation of straightening out an honest misunderstanding may leave enough of a sour taste in the prospect's mouth to cost you future business and referrals.
The same is true if your business focus is on high quality but your source promotes you as a low-cost provider. It's important that your marketing message be conveyed accurately and realistically.
How do you keep up with the demands of running your business and making sure the word gets out about how wonderful your business is? Start small with your family and friends. It's amazing what a good word by a spouse or relative can do for your business in the right place and time. Branch out to your friends or members of organizations to which you belong. With family and friends, the key is ensuring they have up-to-date information and a thorough understanding of your company. Don't forget the vendors who provide products or services to your business. Remember that the IT consultant who helps with your server every other week will visit (and talk with) many clients in between.
Word-of-mouth is always working; it just may be working against you. If you don't have a strategic plan, then you're not in control of what's being said about you. And if you don't have a way to measure the results of your word-of-mouth marketing, then you have no idea if it's really working.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.