Traditional Marketing: Referral & Word of Mouth Marketing 101
What are Referrals and Word of Mouth Marketing?
Referrals or Word of Mouth marketing is the process of asking existing customers, family, friends, and contacts to recommend you or your company. This can be something very basic or more complicated where you offer special rewards or incentives for people providing you referrals.
How are Referrals and Word of Mouth Marketing Used in Home Services Marketing?
Referrals or WOM are used in home services marketing very often, especially as a home pro is starting out. A home pro may specifically ask their customers to refer them to new business, or it may happen more organically by a satisfied customer passing along a home pro’s contact information during or after their job is complete.
Referrals are usually very cheap or free in most cases. If you are offering someone an incentive like a gift card or a % discount on their job then there may be a nominal cost, but usually it will be one of the most affordable marketing options that you have.
You do not have to wait to see results from referrals or word of mouth. It can happen quickly, but it can also take time depending on how many people you can ask for referrals.
What are the Pros of Referral/Word of Mouth Marketing?
The biggest pros of referrals and WOM marketing is that it has an extremely high conversion rate and it’s very affordable (free in most cases). You will close a very high percentage of referral business and outside of doing a good job for the customers you have, there isn’t a lot of effort you need to put into getting the work.
The sales cycle will also usually be a lot faster and the lead is much warmer from the beginning because they already have a trusted resource telling them that you are reliable and can get the work done. You’ll find that not only will you close more jobs, but a lot faster than you normally do off of different types of marketing leads.
What are the Cons of Referral/Word of Mouth Marketing?
The biggest negative of referrals is that it is unpredictable. You never know when they are going to come in and they are hard to count on. Because you are relying on your customers to send you leads, you can’t have any way of predicting when the work will come in. You also will not know what type of work you’ll get a call or a referral for- it could lead to a more profitable job or it could lead to something smaller.
What are the key elements that should be done to ensure referral/word of mouth marketing is successful?
Automated emails are a great way to stay in your customers’ minds. After a new customer is acquired and a job is done, move them to a quarterly automated email that incentivizes them using a promotion to send you referrals like discounts on your services or an $100 Amazon gift card for successful referrals.
This is a great way to improve the efficiency of your referral pipeline.