Marketing / Attracting new business

Generating word of mouth referrals

Referrals are one of the most effective ways of getting sales, and cost you virtually nothing. So how do you go about generating word of mouth referrals?

28 September 2010 by

In Flying Solo’s Understanding Micro Business 2010-11 survey, word of mouth referrals were nominated as the leading method of gaining new business by 85% of respondents.

Clearly this is an area none of us can afford to ignore, so here are some ideas for generating more word of mouth referrals for your business.

Word of Mouth on the Web

Companies such as Word of Mouth on the Web specialise in generating business for other companies via word of mouth referrals.

If your target audience is B2C, this site is a way to compile online reviews about what you do, which can then be used in your email signature or as a link on your website.

The site itself may even generate word of mouth referrals for your business, and is well worth checking out.

"If you do a great job you will ultimately get referrals, but if do an outstanding job or provide a surprisingly personalised service you’ll get even more."

Ask everyone you know for a referral

Over the years I’ve heard many people recommend the strategy of asking all of your current clients to refer new clients to your business. It’s not my personal style, but I know this approach works very well for some people.

A less intrusive way of soliciting referrals is to ask clients for testimonials once a project is complete or after a few months of working together. This is a more subtle way of letting them know that you would appreciate them referring your company to their own clients, friends, family and colleagues.

To reward or not?

One of the issues involved in generating word of mouth referrals is knowing whether or not to reward the person who sent you the referral.

I purchase from an online shopping club and they have a system of sending a cash reward to members who refer new paying customers. That seems to work well in the B2C market, but I’m not sure it’s as effective in B2B.

Perhaps the solution is to offer a business-related reward, such as books that are relevant to your industry but aren’t available here in Australia. (You could purchase them in bulk from Amazon).

Have you been caught up in this dilemma? How did you solve it? Please feel free to talk about your experiences in the comments section below.

Want more articles like this? Check out the attracting new business section.

Be an active networker

Participating in a variety of networks is another way to generate word of mouth business – especially if you take a strategic approach to networking. Here are some ways networking can be a valuable component of your word of mouth marketing plan:

  • Consider joining a networking group in which members actively promote the businesses of others in the network, such as BNI.
  • When you’re out and about, keep an eye out for businesses that have the same target audience as you, but are in separate industries, and then step up and propose shared promotional opportunities.
  • Network online by participating in forums, commenting on blogs and being active on Twitter and other social media sites. (This is sometimes referred to as ‘word of mouse’).

Look the part

If someone is kind enough to give you a glowing recommendation, the first thing your prospective new client will probably do is visit your website.

Making sure it is up-to-date, fully functional and very classy is an excellent way to reinforce the positive information your prospect has received about you. In my opinion, if you’re planning to attract a lot of business via word of mouth, this is vital.

Go the extra mile

If you do a great job you will ultimately get referrals, but if do an outstanding job or provide a surprisingly personalised service you’ll get even more.

For example, today the owner of an online food store I shop with dropped my delivery off in person. Not only was it great for me to meet Emma and put a face to the company, but I’ve already told four of my friends how impressed I am with her service.

Do you have any other tips for generating word of mouth referrals? Please spread the word below.

Jo Macdermott

from Next Marketing works with business owners in Melbourne who require marketing support. Jo specialises in tactical marketing plans and campaigns that are pragmatic and make a lot of business sense.


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