Why Word of Mouth Won’t Hold Up An interview with Buffini & Company Coach, Kim Ortega
By John Voket
How do you explain the difference between a
‘working by referral’ business and a ‘word-of-mouth’ business to your Coaching clients?
A word-of mouth business is defined by salespeople who are passive and wait for referrals to come their way. A working-by-referral business is proactive, intentional. It’s about having and executing a plan that will give predictability to your incoming business. No matter how good your word-of-mouth business is, it still is a passive way to build your business. You are playing a waiting game versus having a plan of action. You are hoping that people remember to tell others about you and that they are saying the things that bring you good, worthwhile referrals. In a working-by-referral business, you have a confident expectation that your actions will produce incoming business. You know who your advocates are, and you have a structure in place that allows them to help you build the quality of your business by asking them to introduce you to the type of client you want to work with.
What are the pitfalls of having a word-of-mouth business only?
You can have plenty of business working via word of mouth if you have a good name and reputation. Many agents and real estate offices keep themselves very busy this way. But the abundance of activity in your business can blind you from the reality that you are being quite passive or even negligent about working on the stability and growth of it. Your potential for growth is much greater in a referral-based situation than a word-of-mouth business. In the long run, you work harder in a word-of-mouth business, not smarter. Word of mouth depends on chance. You will eventually learn your beloved friends and clients are not concerned about sustaining your business. You are the one who must step up and make the effort. Working smarter is to have a proactive system for maintaining consistent contact and
communication.
Is it difficult for agents to transition from a word-of-mouth business to a working-by-referral business?
One of the difficult aspects of transitioning from a word-of-mouth business to a working-by-referral business is to first admit or understand that they are different. The reality sinks in very soon that being proactive and intentional is hard to do. Another hurdle to the transition comes when you overtly ask folks to be on your “team.” Talking to a person that you assumed so confidently would send you a referral via word of mouth, could now scare you because of the possibility of hearing a rejecting “no.”
The basic elements of Brian’s system are to give of your time and attention to maintain consistent contact with people—for you to communicate that you care and build good relationships. Setting, tracking and achieving specific goals are necessary to keep referral activities focused and effective—prioritizing and building rituals and routines into your activities and schedule. You definitely will have to “cultivate” the referral-based business.
Can you give us an example of how one of your Coaching clients has succeeded by building a referral-based business?
Barb Connery is a real estate agent in the Outer Banks of North Carolina. She had a good word-of-mouth business and always expected that people would act in her interest by sending her referrals. She never thought of having a system to receive referrals intentionally. But how could she expect referrals when most of her business contacts were out of state? She thought it would be too pushy to ask. But, as she began to put systems in place to be proactive and work by referral, it was eye opening to see how many more referrals came to her. She said it was humbling to know how much people enjoyed her calling just to check in, and how positive feedback was inspiring an increase in her proactive behavior. The number of people in her client appreciation system decreased while the quality of the clients increased. It still is a struggle for her to keep consistent proactive contact, but by using tactics for time blocking the habits are becoming more ingrained. |
