The Power of Referrals and Word of Mouth Marketing

I’ve never sold anything at any business networking event

So let’s go out and do some more right now, ok?

business card exchange

Doing the business card shuffle

I have been going to business networking meetings at Chambers of Commerce and gallery openings and industry specific events and conferences and seminars and dinner parties and everything in between for the past 11 years. I network with anyone from start ups and solo entrepreneurs, to owners of SME’s and everyone in between, some of my activities are really social networking, and  I often refer to myself as a business networking trollop. As they say: “I’ll turn up at the opening of an envelope”. I can’t get enough of it, it seems, yet I don’t think I have ever sold anything at any event I have ever attended.

For the past 8.5 years I’ve been a member of a business networking group. You might have heard about it, it’s called BNI, which stands for Business Network International (There are many BNI groups around the world have a look at www.bni.com )

When you are a member of a BNI group, you take networking to another level altogether, and we meet every week for breakfast at 6.30 am, week in week out, about 48 weeks of the year.

Why ever would I do such a thing?

Strange behaviour if I’ve never actually sold anything at a networking event, right? Maybe I and my weekly breakfast partners are we masochists? I suppose some of us might be, I wouldn’t like to speculate… But I’m certainly not. I get up week after week, rain hail or shine for one reason only, and that’s because it’s worth it.

Boredom

bored I get up every week because it is the most effective form of local small business marketing i know. I meet with my fellow members for the purpose of referring qualified business opportunities to each other, real honest to goodness paying clients. I and most of the members of my BNI group, rely for a significant percentage of our new business on the group. About 50% in my case. That’s worth getting out of bed for, don’t you think? Now I can hear you thinking: “Oh spare me, I’ve been to so many networking events and nothing ever comes of it. There is nothing more boring I can think of doing … watching paint dry is more fun… no one’s ever bought anything from me, networking, chamber of commerce gatherings, you name it, they’re all an enormous waste of time.”

Fair enough, I hear you, they usually are… That’s to say, if you go to a networking event with the aim of selling stuff, they will just about always be a complete waste of your time.

I heard someone give an address to a networking event some time ago and he said: “Hands up everyone who’s here to sell something?” and most people raised their hand. Then he asked: “Hands up everyone who is here to buy something?” This time no one raised their hand, demonstrating once and for all that going networking to sell stuff is a waste of time.

The mindset

So why does my business group work for me and for most of the members of the group? The difference is a mindset. In BNI and in some other business networking organisations we support each other by focusing on one thing only, and that is: Word of mouth referrals.

What that means is this: We don’t set out to sell stuff to each other, because we know that mostly the others in the room don’t necessarily want to buy stuff. Instead we ask our fellow members to introduce us to their friends and clients and their network.

Here’s how that works: the other day I had a conversation with one of my fellow members who is an event manager. I don’t run events, none of my friends are about to get married and none of my clients are planning a conference, so on the face of it there was little I could do to assist her. But we spent some time getting clear about her perfect clients and then she and I went digging around in my existing networks. We found 4 people in Linkedin, as it happens, who met her criteria and I sent all 4 of them an email mentioning that I have a good friend who is an event strategist and would it be ok for me to introduce the two of them to each other. Within half an hour I had a reply from one of those contacts saying: Yes please we are just about to start looking for someone and it would be great to talk to your friend because we’ve had some terrible experiences with event managers in the past.

Just last week my friend signed a contract with this company for a small user conference to be held in a few months.

Sabre Tooth Tigers

sabre tooth tiger Great outcome all round, it made me feel great to have made the introduction and I’m sure that my friend will do a great job for this client because she always does.

And that is the point of this whole article. The best, easiest, cheapest, most profitable new business you can get for your business comes from word of mouth referrals.

If I need a plumber, I am 10 times more likely to ring a friend and ask him for the name of his favorite plumber than to go to the local paper or search on Google for a plumber.

We are wired that way as human beings. It’s actually a leftover from prehistory, the days of the Sabre Tooth Tiger (I wrote about the principle in an article some years ago here) Of course there is a place for all kinds of marketing (and even advertising), but if you can get a referral from someone who trusts you, you are so much more likely to get the business and it costs you nothing.

Seth Godin

As so often, Seth Godin said it best:
“If you want to be successful in business you only have to do two things:

  1. Do great work
  2. Make sure lots of people know about it”

And that is how simple it is. Make sure you deliver a great product or service and then make sure that people know that they can trust you to do great work.

The quickest way for people to trust you is by having someone they trust tell them they can trust you.
Focus on having others spread the word for you and you will indeed build a Fun Business that sustains you for years to come… I promise you.

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4 comments on “The Power of Referrals and Word of Mouth Marketing
  1. This is such a great article. I found the information very helpful to able to be at networking. Thanks a million and please keep the great advice coming.

    Emily Berryman
    Advanced CPR Training
    Helping to save lives, One class at a time!

  2. Eric Brown says:

    Spot on Roland

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