Why Word of Mouth Marketing Could Be Working Against Your Business Growth

The Spaghetti Report is a monthly resource to give you the insights and strategies to make your marketing work. Instead of throwing spaghetti at the wall and seeing “what sticks,” Wythe Ave Consulting is here to give you actionable strategies to grow your bottom line with predictable, repeatable results. 

The best marketing, as the saying goes, is word of mouth marketing. After all, word of mouth marketing:

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  1. Is free

  2. Creates warm referrals vs. traditional marketing that moves “cold” leads through the sales funnel 

  3. And word of mouth marketing moves your organization out of the sea of nameless competitors into a credible spot in your prospects’ minds. 

But making word of mouth marketing your number one strategy for growth can put your organization at incredible risk. 

That’s why in this month’s Spaghetti Report we want to share downsides of relying too heavily on word of mouth marketing to grow your organization.

Make no mistake. Word of mouth marketing—when it’s done with intention, and as part of a larger marketing strategy—can be a powerful tool for helping to grow your organization. But Wythe Ave Consulting is often called in to help fix the problems that word of mouth marketing has created! 

So, let’s look at a few of the unintended consequences of relying too heavily on word of mouth marketing to grow your business. 

Word of mouth marketing is unpredictable. 

Every upside has a downside, and one of the downsides of word of mouth marketing is that it’s an unpredictable source to manage your organization’s growth. You might have a referral program in place, but ultimately, you’re at the mercy of your contacts’ network and your referral sources’ desire and willingness to share your organization with others. 

At Wythe Ave Consulting, we encourage our clients to create predictable and repeatable models to nurture long-term growth. The unpredictability of when the next organic word of mouth lead will show up makes it difficult—if not impossible—to cast reliable growth projections. 

Word of mouth marketing is volatile.

Because of the unpredictability of word of mouth marketing, your new business strategies can lean too heavily on waiting for the phone to ring. Because of this, your organization may experience too much ebb and flow of business: feast and famine periods that make it difficult to staff, budget and project future growth investments. 

Word of mouth marketing invites creating solutions based on past business—not the next level of business you want to attract. 

Your organization gets to reinvent itself with every new client, project, and opportunity you create. Word of mouth marketing relies on past customers to dictate what your organization will create next. After all, past customers only know your organization by what you created for them—not what you would like to do or create. 

That’s why we encourage our clients to use word of mouth marketing as just one of several tools for marketing. When you bring together other marketing tools, such as digital marketing to reach new prospects, you have the power to position what you want your organization to be known for next.  

Word of mouth marketing often forces your organization to create custom solutions for clients instead of creating well-defined, tightly scoped, and highly profitable solutions. 

Typically, word of mouth marketing works like this. Your organization does a great job for a customer. She’s thrilled with the work and has another problem she needs solved. Because she liked your last job, she calls you and asks if you could help her solve a new problem. That new problem is slightly out of your wheelhouse of expertise, but your team is smart and can solve for just about anything. You delight your client again and she rewards you by telling her contemporary at another company about you. That contact calls to see if you might do something similar for him. Only in this case, his problem is slightly different than what you’ve created before. But you know your team is smart and can figure out just about anything. So, you go to work, solve the problem, and that new client rewards you by telling a buddy of his at another company about you who has a different type of problem, which you go about solving…

You see where this is going right? 

You’re attracting new opportunities, but your organization continues veering off course from being well-positioned and laser-focused on creating value for a specific audience … with specific needs … using a specific set of solutions … that you’ve refined so you get high margins by selling the same solutions again and again.

On the other hand, a well-defined strategy enables your organization to create a distinct brand positioning in the minds of prospective clients … which then serves as a magnet for future, profitable opportunities. 

With word of mouth marketing, eventually, the well will run dry. 

No matter how great your word of mouth marketing is, eventually you will run out of prospects who can send enough leads your way to sustain your growth efforts. We see this quite often with organizations who seek to enter new business categories and verticals. What worked before to grow the business—referrals from existing clients via word of mouth—no longer works when your organization is largely unknown and untested. Without a well-defined marketing strategy in place to augment organic word of mouth marketing, many organizations struggle to gain footing and momentum. 

That’s why we encourage our clients to develop predictable, repeatable strategies for business growth while nurturing organic opportunities from word of mouth marketing. 

Final Thoughts

Please don’t get us wrong. We’re grateful for our own clients who have referred us to other amazing people that we consult and work with. But we also know how unpredictable word of mouth marketing is. That’s why we wanted to share these insights in this month’s Spaghetti Report: so you can future-proof your organization by not relying solely on word of mouth marketing to drive your business forward.