According to the Business Dictionary, Word of Mouth (Referral) Marketing is: Oral or written recommendation by a satisfied customer to the prospective customers of a good or service. Considered to be the most effective form of promotion, it is also called word of mouth advertising which is incorrect because, by definition, advertising is a paid and non-personal communication.
I’d like to throw my definition in the hat and see Referral Marketing as: Turning your customers into your most effective sales and marketing asset by delivering exceptional service that they didn’t expect, thus giving them a positive story to tell.
To achieve a referral, you need to understand that competency doesn’t create conversation. When you do exactly what your customers expect, paid for and anticipate you will do, they do not mention that to anyone because there is no STORY there. Delivering what was expected won’t get you a “Wow”!
I have never said – to anyone – “Hey, let me tell you about this perfectly adequate experience I had recently.” That would be a terrible story. Not interesting to tell, and not interesting to hear. Word of mouth requires story crafting. Word of mouth requires not just going that extra mile (kilometer for our South African friends), but going to the moon and back and picking up a few stars along the way when you pass the Milky Way…
Competency does not create Conversation
Reactive Word of Mouth Definition: When your customer mentions your product or service when prompted, in the midst of an offline conversation, an online exchange, or similar. For example, if I was with some friends at dinner and someone asked, “We’re going on a trip to Cape Town, any idea where we should stay?” I might chime in with “Yes! The One and Only is terrific, and the High Tea between noon and 3 in the afternoon is to die for. Oh yes, and don’t forget the amazing view of Table Mountain”
I am reacting to the situation and am making a recommendation in that context. “Referrals” is what reactive word of mouth is called in some instances.
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Proactive Word of Mouth Definition: When your customer introduces or inserts your product or service into a topically unrelated offline conversation, online exchange, or similar. For example, if I was at the same dinner, with the same people and someone asked, “Anyone do anything interesting lately?” I might answer “Yes! I was in Cape Town last week. I stayed at The One and Only, and you would not believe the amazing selection of sweets and pastries I had at their daily High Tea.”
In this scenario, I am not waiting for the topic to come around to hotels before mentioning The Only and Only and their famous High Tea. Instead, I am inserting the High Tea into a broader conversation and turning the topic toward The Only and Only.
Word of mouth is the most persuasive and most common way that people make buying decisions.
However, proactive word of mouth is the superior type because it requires your customer to be so enthralled with your product or service that they are compelled to find a way to bring it up in conversation, even if it’s not on topic, per se.
Telling a story when asked is one thing. Telling a story without being asked is something else entirely. It requires more conviction and more passion.
To make sure the word of mouth about you is proactive as much as possible, you need to make certain that your Service/Product is truly differentiated. You have to do something different, that your customers do not expect, and then find irresistible.
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