Word of Mouth Gone Wrong


In my small business referral seminars, I sometimes ask the participants of their opinion about the best way to increase the number of referrals they get in their business. Invariably, there are some business owners in the audience who say that they “just need to do a good job” and the positive word of mouth will take care of itself.

Alas, nothing can be further from the truth.

Every successful business that I have studied and that generates a lot of referrals, has a systematic, well-thought-out referral process in place. Referrals don’t “just happen”! No matter how great a job you do as a business or a professional, it is never enough to attract a sufficient number of quality referrals.

The sad truth is, people take good service and good experience for granted. They are much more likely to tell their friends about their bad experience than good experience.

There is a psychological reason for that: Most of us humans are preoccupied with negative thoughts. We all like to vent. And given a chance, we do.

Which is confirmed by a customer behavior research company called TARP, based in Arlington, Virginia. Here’s what TARP research has to say on this:

A happy customer may share their experience with just a few friends;
These friends will not remember much and will not share that information with anyone at all.

And that’s it. The message stops there (unless you use deliberately designed referral tools to carry it down the channel) and you get no new business.

Now let’s imagine you messed up. Here’s what’s going to happen to you, according to TARP:

A disgruntled customer will share their bad experience with the average of 12 other people;
Each of those 12 people will in turn mention it to 6 others

Let’s do the math: We are talking about (1 person who has had bad experience) + (12 people that person has talked to) + (12 groups * 6 people they have contacted) = 85 people will no longer think very highly of your business or service just because of a little mess-up!

Bad news certainly travels fast.

Here’s what this all means to you and your business:

Doing a good job is still important (as they say, “you can’t brand crap”). However, it’s not enough to attract a reliable stream of referrals.
To get more referrals, you need to build and implement a referral system that you can control and rely on (the type of the system we teach at the Small Business Referral Seminar).
When you make a mistake, you need to go out of your way to admit your mistake, apologize, and make it right again for customer. For example, you can send a nice “apology” greeting card to them, possibly with a small gift. Chances are, this person will become one of the most loyal of your customers (sometimes they will become a bigger supporter of your business than those customers who have never seen you make a mistake).

So doing a good job is important to avoid the negative word of mouth. However, doing a good job is never enough to get all the referrals that you need and that you can handle. That task is only accomplished by creating a systematic referral process.

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