Editor's note: This month's column is excerpted from
Ivan R. Misner's The World's Best Known Marketing Secret(Bard Press).
Reality-check time. How many ways are there for you to increase
your business? Dozens? Hundreds? Maybe thousands? Guess again. Try
four. That's right, there are only four main strategies you can
incorporate to increase your business. Don't believe me? Then
read on.
First, you can advertise. Competition for
customers in our society is fierce. Your competitors are trying to
win over the same clients or customers that you are. Even in a good
economy, advertising doesn't guarantee success over your
competitors. The people you're trying to reach, by some
estimates, are bombarded by nearly 2,000 advertising messages per
day. This constant inundation means your prospects potentially have
many alternative sources of supply for the products or services you
provide.
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The second way to increase your business is through a
public relations campaign. This can be very expensive
and time-consuming for a small business. Therefore, if your company
is too small to hire a PR firm, you need to create your own
personalized PR program.
The third way to increase your business is through word of
mouth. Word of mouth has long been recognized as the most
cost-effective form of marketing a business can use. Tom Peters,
author of Thriving on Chaos, regards word of mouth as
one of the major ways a business can bring in new clients or
customers. Peters asserts that one has to be "just as
organized, thoughtful and systematic about 'word-of-mouth'
advertising" as with other forms of advertising and marketing.
Yet, "you never see a 'word-of-mouth communications'
section in marketing plans," he says. I, too, believe that if
you don't have a well-structured plan, you're not likely to
have impressive results. Many business professionals make the
mistake of thinking that developing good word of mouth is about
providing "good customer service."
There's one other marketing strategy that a lot of people
use as an alternative to advertising and PR, and that is, yes,
that's right, the "C
word"--cold-calling! Cold-calling--just
mentioning it makes me shiver. Given the other options, who in his
right mind would want to spend the rest of his professional life
cold-calling?
Well, there it is, your marketing reality check. Given only
these four strategies for increasing your business, I'd have to
recommend advertising. However, most businesses have a limited
budget to spend on advertising. PR is best used in conjunction with
other marketing efforts. And I don't know about you, but many
years ago I promised myself I would never do a cold call ever again
for as long as I live! That leaves only one other way you can
effectively build your business: by word of mouth.
A Cost-Effective Form of Advertising
Word of mouth is a form of advertising and, like media advertising,
requires careful planning to achieve a worthwhile return for your
time and energy. As you begin to use and benefit by word-of-mouth
advertising, you'll see that it's a very cost-effective
medium. If you haven't developed a structured word-of-mouth
marketing program to generate referrals, then you can't enjoy
its benefits.
While many entrepreneurs recognize the value of referrals to
their respective organizations, they're not clear on how to
consistently generate a large number of referrals. Worse, they
don't realize there's a segment of the population looking
for their product or service right now.
People Want Referrals
People don't want to go to the telephone book to pick a lawyer.
People don't want to pick a real-estate agent from the Yellow
Pages--or an accountant, or a chiropractor, or an insurance agent,
or a dentist, or a mechanic. People want referrals! Historically,
the only problem has been linking the people who need services or
products with the people who provide them. A structured
word-of-mouth campaign begins by acknowledging that there's a
segment of the public that wants you and your service as badly as
you want their business.
People from all walks of life want referrals--not just the
business community, but the general public as well. Few people want
to choose a dentist, for example, from a printed advertisement.
People want to have more personal information before making such
selections because whenever you choose a professional exclusively
from an advertisement and have no other source of information, you
may be taking a big risk as to the quality of service you will
receive. With referrals, the risk is greatly reduced. Someone else
has done business with that person and is recommending that
professional to you with confidence.
Referrals Are Good Business
Compare a lead that you receive from an advertisement with a
similar lead (that is, referral) that you get from someone you
know. The referred lead is easier to close and costs less to
obtain. Often, the referral provides a higher-quality client or
customer with less chance of misunderstanding or disappointment.
When I ask audiences why referral business is better than the
business they get from ads, they say the referred business:
- is easier to close,
- has far fewer objections,
- has a stronger sense of loyalty,
- remains a client longer, and most important of all,
- has a higher sense of trust.
Relying on the advice of a mutual friend or acquaintance, the
referral starts with a higher level of trust for you and your
product or service. Getting dozens of people to send such referrals
your way every day is what building successful word-of-mouth
business is all about.
Ivan Misner is Entrepreneur.com's "Networking"
columnist and the founder and CEO of BNI, the world's
largest referral organization with thousands of chapters in dozens
of countries around the world. Ivan's also a New York Times
bestselling author--his latest book is Masters of Success: Proven Techniques for Achieving
Success in Business and Life.