The most powerful form of marketing

No one will question this. A friend talking about a new product, getting excited, will sell us on the idea that we should buy that same product a million times faster than some 30 second television commercial.

Word of mouth is the most powerful form of marketing that exists.

It's also the slowest to achieve any substantial results.

A friend recently asked me about the power of referrals. His idea is to create WOM marketing for his new business. But he wants it to happen fast, which is like asking an elephant to tiptoe gently (impossible).

He has a business that he wants to pay a referral fee to customers who generate new business for him.

Here was my response.

Money will motivate some people to give you a referral. Agreed that profit margins are good enough to afford referral fees. However keep in mind that most will gladly refer for free if you do a good job with an amazing guarantee. The reason most people don’t refer companies to their friends isn’t because they aren’t paid. It's their friendship credibility that's at stake if the friend has a bad experience with the referred company. To most, credibility is way more important to them than a few bucks.

Think about the other side of the equation. If I’ve been referred to your business by a friend in which I spend a significant amount of money. It doesn't matter if I like the product or not, if I found out that the friend made money in converting me to your client, it makes me feel used. 

To combat that, you can make a better deal - an insider’s deal or a friend’s and family deal.

Offer this instead:

If a client knows anyone else who might also like the product, not only could you give a referral fee, but you could also give the referred customer a percentage friend and family discount. Now everyone wins and no one will feel taken advantage of by a friend.

Remember, the deflector shields will be up. How do they come down? When we are able to help others. A pay it forward discount to our friends will be seen as helping others and not taking advantage of a client's personal network.

Social Media is a form of Word of Mouth marketing. It can speed up things significantly. But the credibility factor will remain. Most won't share in fear of hurting their own social standing. They will protect their network, and their credibility unless they know without a doubt that you won't let them or their friends down.