Is Word-of-Mouth Enough?

I often hear small business people say "All my business is word-of-mouth". There is nothing wrong with that. In fact, every business has word-of-mouth advertising. If you don't, you won't have a business for long. I mean positive word-of-mouth, of course. Negative word-of-mouth is often easier to come by and works against your business. It is a natural human response to more readily share a bad experience than it is to share a good one. We expect things to go well, so we don't mention it when they do; it is when things go wrong and our expectations are not met that we tend to get vocal about it.

Positive word-of-mouth is more likely to happen the higher our experience goes above meeting our normal expectations. If you have a good meal at a restaurant, you may or may not tell someone else about it. But if the meal was especially tasty, with service that went above and beyond, and if the atmosphere was great and the price seemed very reasonable, you are far more likely to mention it and to give the place a rave review.

Let's get back to the positive word-of-mouth that we have for our business. As I said, every business starts with word-of-mouth advertising. Word-of-mouth is one of the best sources for getting new business, but it has some weaknesses. You need to be aware of these, because any business depending solely upon it is destined to grow too slowly.

Consider your market area. Is it just your immediate neighborhood, your whole city, your county? Is there a radius of X miles from which you want to pull customers? Regardless of the area, word-of-mouth is a small sliver of your potential market pie. The larger your target market area, the thinner the sliver is.

Also, just because someone mentions you or recommends you, there is no guarantee that the person referred will do business with you. You may be one of several word-of-mouth referrals and one of the other referrals may end up getting the job or the sale. The person receiving the referral may not act on the referral for any number of reasons. Maybe they weren't ready to make a purchase themselves. Maybe they found someone else who was cheaper, closer, had more experience, or was better looking. No matter what the reason, not every referral will end up doing business with you.

And what about all those other people in your market area who never hear the word-of-mouth about you, yet could and would do business with you if they only knew? Do you think everyone in the area already knows you? The larger the area you are focused on, the less likely it is that "everyone" knows you. Do you want to see whether "everyone" really knows you? Have someone call ten or twenty random people out of the phone book and just ask whether or not they have heard of you. You will be surprised just how limited your reputation is.

Often it is true that the longer you have been in business, the more likely it is that somewhere, sometime, someone has a less than stellar opinion of you. You can bend over backwards to rectify a bad situation, and there will be some people that just will not be appeased. This takes us back to the negative effects of word-of-mouth advertising.

I may return to this subject later, but I wanted to give you a little food for thought on this subject. Word-of-mouth is essential to building your business, but you need to go beyond this fundamental step if you want to really kick your business into high gear and get growing.