Why Word of Mouth will Always be Essential for Small Business Growth

by / Thursday, 05 June 2014 / Published in Small Business Financing

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A growing small business needs new clients like a plant needs water, but business owners should think of their repeat customers and loyal referrers as the stable ground from which that plant grows upwards. Digital marketing has vastly opened up the audiences that small business owners are able to reach, and their marketing can make a huge difference in how fast they are able to tackle larger and larger projects, but in order to ensure that their business is ready to accelerate, business owners should use the strength of their word of mouth referrals as a barometer.

If you are not getting word of mouth referrals, that could be a sign something is wrong. People will generally tell others about when they have a good experience, which is why checking on how much business is being sent to you from satisfied customers is so important for gauging satisfaction with your business. An apparent lack of customer referrals could be an indicator that part of your business needs work. The most obvious culprit is customer service, but poor product quality can also be to blame. In order to figure out what is wrong, if anything, reaching out to past customers to ask about their experience with your service is a good idea. If none of your past customers are wiling to engage with you, then that is another negative sign and a thorough evaluation of business procedures and quality of service should be undergone. Bear in mind that some businesses will naturally get fewer referrals than others by nature of their industries. If you are unsure what constitutes a healthy amount of buzz, perform some market research to get a more clear idea of the size and demographics present in your market and within the area you serve.

Keep track of how much of your incoming business is from word of mouth. It’s a mistake to not pay attention to where business is coming from. In order to optimize marketing spend as well as plan for future expansion, a business needs to know where its leads are coming from. Furthermore, identifying how many leads are coming in from word of mouth referral allows business owners to reach out and thank the clients they have who have been advocating for them, inspiring more loyalty and keeping them open as a lead source. Almost every business will begin to gain its first clients through personal recommendations, but as a marketing budget is developed and more diverse leads begin to come in, it pays to make the effort to stay connected to the people who helped pave the way to a broader audience. Social media, newsletters and even direct mail can be a good way to stay in touch with these important and formative customers.

Photo Credit to Lovelorn Poets on Flickr

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