The Word of Mouth Paradox

“You can’t scale referrals”

Bollox.

It’s the most scalable channel out there. 

And this myth I think is why they get nowhere near the respect, or investment, they deserve, despite them being the number one source of new business for the vast majority of business. 

As you might expect I have some (a lot) of views on this - both on why this is, why it’s wrong, and how you can pay less attention to the well written sales messages and start putting some firm belief behind what you know in your gut is the right way to grow your business. (through an effective nearbound strategy - be that referrals from your clients, network, partners, or Margret who lives two doors down) 

I’m going to address all of this so let's set the scene and go from there.

Warning I might get a bit ranty / overly passionate at times during  this piece, but that’s because I feel so passionately about it. The world needs more genuine human connection, but it’s not just about being fluffy - the bottom line of your business will thank you for it to

Everyone loves a (good) referral. And there’s so many stats out there to back up what we all already know. That referred leads close more often, close quicker, spend more and stay longer. They’re also way less likely to ghost you during the sales process, and also have a match in values with your existing clients that you love (hopefully - if your client list is full of people you don’t like a) a referral strategy maybe isn’t for you, and b) no strategy is - change what you do). Which means they’re great clients to work with - so are not only more profitable but also keep your team happy, with all the onward benefits of that. 

So why are they not only not invested in, but in some quarters actively spoken down about? Looked at as something you only do when you start out, that if you want to scale you have to grow out of?

Lets tackle this one at a time, starting with the myth of scale and the dismissing of referrals. 

“Break through your referral ceiling” 

“Remove the worry of reliance on referrals” 

“Build a channel you can scale” 

And many many more quotes I could lift from LinkedIn, or multiple websites.  By who? People who are very good at peddling their alternatives. 

The alternatives that typically take heavy investment, on a consistent basis, which actually offer diminishing returns once you hit your limit (the exact opposite of scale) - never mind the dwindling response rates in general as we all get sick of our inboxes being bombarded, and the dubious quality of the “leads” when they do. They peddle this message with confidence, because they’re very good at sales (because that’s what they do as a business).

But despite all the ‘proven formulas’ how many people have you actually spoken to who have really benefited from mass systematised outbound with apparent ‘personalisation at scale’? Very few I imagine.

And the most ‘proven’ channel when you actually think about it? 

Yep, Word of Mouth. Referrals. 

(As an aside there’s also no real easy money to be made from word of mouth from your big tech giants either, or anyone at the top for that matter, who want the whole world to move to a more digital, soloistic state - but that's another piece for another time maybe).

Before I go any further I just want to say that I am in no way trying to bash all other forms of marketing and lead gen. Nothing could be further from the truth.

(Apart from those horrible AI mass emails that pick something random from your LinkedIn profile or website and spam your inbox. They can absolutely do one) 

If you want to scale your business, doing it via word of mouth alone isn’t going to cut it. A referral shortcuts the ‘People do business with people they know, like, and trust’ but it doesn’t negate it. All I’m saying is your focus on them should be a much higher part of your marketing  mix bearing in mind that despite your strategy being entirely organic (chance/hope) it’s still the channel that delivers your best leads. You still need to be able to close the leads, great positioning makes all things nearbound sooo much easier, as does having a brilliant brand, and other forms of sales & marketing (be that content, events, decent outbound, feet on the ground) all play a hugely important part - and there are brilliant individuals and organisations to help you with that - I know a bunch of them.

And this is where the word ‘proven’ comes back in. In a world obsessed with ROI (and we should of course be looking for healthy return on investments) everyone wants to claim that they’re responsible for the sale. Last click attribution. 

But how often can you really claim genuine attribution (I spoke to a brand who said if they listened to all of their different channel providers attribution claims they’re new sales would actually be 4 times higher than they were!) - isn’t it much more about contribution? That ‘organic inbound’ lead on your website? Is it not as likely that they heard about you from someone else, had you directly recommended, read something in the press or saw some other content that drove them there then they magically found you, or finally clicked on the email / ad? And maybe (almost certainly) actually a combination of all of these?

So, back to my rather bold statement of ‘word of mouth being the most truly scalable channel’. Scale is where you can ramp up the results of something, without having to put the same amount of effort in per result - that effort being time or money. You can absolutely do that with word of mouth, but only if you have a strategy and you do it intentionally. 

Let's look at client /network referrals first.

*First up is the network effect. 

Referrals aren't  linear. When you ask someone for an introduction that isn’t a one and done thing. Most people love to make introductions.  And so one person introduces you to two people. Each of those two people introduce you to two more, so now we’re at four. Those four people introduce you to two each as well, so we’re at eight now. You get the idea. Multiply that out via multiple contacts (and the fact that some will do many more than two, even if others will do less), and couple it with the fact these will be as close to your ideal client profile as possible, and you can see the impact.

*Second is moving it away from being the responsibility of the founder or a few key individuals in the business.

As you scale, so should your referral strategy. So build a culture of referrals. A culture where everyone has the skills and confidence to leverage their network in an intentional but human way, and the business has the systems  behind the scenes to help support that. You can start with your customer facing teams and go from there. 

The other side of Nearbound lead generation is partnerships

and the opportunity for scale is even greater here. The right partner is a one to many sale where they’ll consistently provide you ideal clients, at the ideal time to buy. Whilst rooted in a match in values, human connection, and a shared end goal for the client, once you have these in place then you can then put the systems and processes in place that support this shared objective and make the day to day running of them routine.  The result - everytime you bring a new partner on board they drop into your process. Comms may need producing, an extra report may need running, some new co-marketing gets scheduled, and it’s extra calls & meetings in the diary - but these are all just tweaked on what’s come before and is set up.

Meaning you get all the same results as your previous partners for a fraction of the effort - and as your programme grows that ‘effort per partner’ decreases as the results grow. That's scale. 

So, it's as simple as that then. Right? 

No. Unfortunately not.

Because we’re not stupid. You knew referrals are great, before reading this - but people still don’t work on them. We know poor outbound isn’t going to work, but do it anyway. 

Why?

Well this is where unfortunately we have to take a look at ourselves. An effective nearbound strategy takes effort up front, and personal responsibility. At the end of the day it’s based on relationships, and those relationships sit with you and your team.  It’s much easier in our minds to outsource the work, however costly, and make it somebody else's problem. But that problem will soon find its way back to you, just a you with a smaller bank balance and a greater need for the right new business, but a feeling that you might need to take any new business. So it can be uncomfy to lean into word of mouth despite all the benefits we know are there.
 

And whilst you might not be sitting here fawning over the next AI bro’s post about a game changing tool and relationships (or agencies) being dead, there’s still a personal commitment to focus on real human connection. 

(PS: I’m also in no way anti AI - just use it in the right way, rather than annoying people, and by people I mean your prospects and wider audience, at scale. Use it to  free up more time for real relationships and creativity).

So, my ask from this piece is for you to really think about how you want to grow your business. With the right clients, gained the right way - or with quantity over quality, burning through effort & audience along the way. 

And look, I have a very conscious bias around this, I help people with the systems, skills and confidence to build & scale nearbound channels, but I believe I’m right to have that bias because for far too long word of mouth hasn’t had the respect and attention it deserves. 

So whether you use me to help you or not, let's all make a commitment to rectify that. 

The world, your soul, and your bank balance will thank you.

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If you do want some support I’m not about to promise that I’ll 10x your business or guarantee you 10 ideal client meetings per month on a success only based trial. We all know who does that.

But, my clients typically get well over a 10 times return on their investment with me in year 1, and then that scales onwards from there - you’ll have all you need to take it to whatever levels you want. 

Get in touch if you’d like to know more, and are willing to take the responsibility. Things start from as small as an hour long strategy session