Making word of mouth work

At some point in our lives, most of us have gone out to dinner and walked past several restaurants, looking in windows and checking menus before making a decision about where to eat.

Whether we realise it or not, we’re unlikely to choose the restaurants with plenty of empty tables. We’re naturally attracted to those that are packed. Sometimes we’ll even join a queue to get into the most crowded eatery on the street.

Why? Because all the social proof we need is right before our eyes.

Social proof is a psychological concept that describes the way we look to others for answers around decisions that we should make or how we should behave, particularly when we’re feeling uncertain.

It also helps to explain why testimonials and reviews of our businesses are vital tools in the often challenging hunt for new clients.

The customer’s risk calculation

When new potential customers are considering buying from a business, they do an internal risk analysis, says Andrew Griffiths, business coach and one of Australia’s best-selling small business authors.

“The question they are asking, often without realising it, is a simple one – ‘Is this business safe for me to buy from?’” Mr Griffiths says.

“Now, safety means a lot of different things, from ‘Will I get ripped off?’ to ‘Will I get food poisoning if I eat here?’ But whatever we might be selling, social proof – specifically testimonials from people similar to us – will help to alleviate our fears and concerns.”

Expand this thinking and it’s clear that the more high-quality testimonials a business can offer, the safer that business is to buy from, Mr Griffiths says.

“In a sceptical world, where we have all been ripped off in some way or left underwhelmed by an experience with a business, safe purchases for anything from accounting services to buying a dog have become increasingly important. Testimonials show our trustworthiness and credibility,” he says.

Take Melbourne-based Knox Taxation and Business Advisory. It has been able to attract new – and importantly, young – clients through testimonials and recommendations.

“I’ve always been conscious of having a reasonable website,” says the company’s principal, Coral Page. “Then my daughter Ashleigh, who was studying marketing, came in and worked here as my marketing guru. She re-designed the website and really got the testimonials going.”

Ashleigh Page also wrote some free materials, such as mini-books on starting a business and on property investing. And she created checklists for clients and potential clients around the topics of capital gains, rental properties, individual returns, starting a business and more.

“We used a copywriter to interview clients, then to write up testimonials and send them back to those clients to check they were happy with them. Those testimonials went on our website,” Ms Page says.

Now, Ms Page tells her team to request testimonials when clients are happy with the business’ work.

“The best testimonials are the ones that come in via Google,” she says. “They have helped us bring in a lot of younger clients, people in their 30s and 40s.

“Some accountants are a bit antiquated and don’t have much of an online presence. For younger people, that presence is important. That’s what they’re looking for.”

How to ask for testimonials

Asking clients for testimonials is an art in itself, particularly if hiring a copywriter is not an option.

“I encourage my clients to take a very proactive stance on getting testimonials and to make this a daily priority, not something we do once a year,” Mr Griffiths says.

“The big challenge for most people when they’re asked to give a testimonial is that they don’t know what to say. And as business owners, we tend to be pretty lousy at directing them. This means we end up with a lot of beige testimonials that really don’t do much to help differentiate or position our business.”

Mr Griffiths uses a seven-step framework to ask for a testimonial from a customer (see Box 1), starting with the reason you want it and ending with appreciation when they send it. “The key is to have a testimonial strategy,” he says. “This applies to the kind of testimonials you want, the formats, what you want them to say and how you are going to use them.”

“This might sound a little intense,” says Mr Griffiths. But he adds that when he asks his clients for testimonials using the plan set out in Box 1, “I get really good testimonials 90 per cent of the time. If I just send a vague email asking them to write a testimonial, I get about a 20 per cent response, with mediocre testimonials that are of little value.”

Encouraging referrals

As its name suggests, AstuteMed is a business that specialises in accounting and business advisory in the medical space. Medical specialists make up 85 to 90 per cent of the company’s clients.

“The majority of our business comes through word of mouth,” says AstuteMed director Sandeep Singh. “The medical community is tightly knit and they talk to each other a lot, so word of mouth has been a major source of referrals.”

Testimonials on Google reviews have also been important. Once AstuteMed set up the relevant Google pages to enable reviews, the business found its digital footprint developing organically. There was no need to spend money on Google AdWords and advertisements.

“We tried to be very targeted and we’ve also done a similar thing with LinkedIn, getting testimonials on our profiles,” Mr Singh says.

“Testimonials are incredibly helpful as we connect with like-minded medical specialists or professionals. It’s free to connect on LinkedIn. Once we do connect, we simply send a message offering an obligation-free consult.”

Such voucher offers, Mr Griffiths says, can be powerful when presented in the right manner.

“There is a certain credibility that comes from getting a voucher from a trusted business that is referring another partner or affiliated business,” he says.

As with testimonials, there can be a big difference between clumsy offers and those that are optimised to win customers. 

If voucher offers aren’t presented in the right manner, they can simply waste time. For example, several years ago, Ms Page ran a promotion for a free, half-hour consult.

“We found it attracted numerous tyre-kickers who came in just to pick our brains for half an hour,” she says. “Then, we never saw them again. We ended up taking that promotion down fairly quickly, as people just abused it.”

Make the most of associations

Margaret Schutt, principal at Schutt Accounting & Tax, says close to 100 per cent of her business comes from referrals.

“We’ve had a couple of people drop in over the years simply because they’ve seen our office,” Ms Schutt says. “But otherwise, all of our business comes from referrals from existing clients.”

In the signature of her email is a note saying: “The greatest compliment we receive from our clients is the referral of their friends, family and small business colleagues”.

Ms Schutt says she does little else in terms of marketing. Even her website hasn’t been updated in years, as she’s been too busy doing good work for her happy clients.

But there is one more ingredient in her recipe for success – making the most of professional memberships.

“I’m a member of the IPA, the Tax Institute, Tax and Super Australia and NTAA,” she says. “The IPA is great for networking.”

Never stop meeting people

Humans are social beings, says Schon Condon, founder and managing principal of Condon Advisory Group. If you can’t connect, life is difficult and lonely. That is as true on a business level as it is on a personal level.

A deep understanding of this fact has helped Mr Condon’s business to thrive on word of mouth. He is IPA’s NSW divisional advisory committee president, a past president of the Parramatta Chamber of Commerce, and an Australian Army Reservist. And he attributes his success to that passion for community, as opposed to a conscious strategy to attract new clients. “I’ve always been passionate about giving back,” he says.

For Mr Condon, making face-to-face contact satisfies two needs at once. He gets his best results from “a communal approach rather than a bloodthirsty, self-centred approach”.

At various events, Mr Condon has seen people “try to work the room”. They walk in, scan the space to see who is worth speaking to for their business. Then they target those people, get their business cards, then leave.

“They are not social,” he says. “They are not there for the event or for the community. They are not there for anyone else. They are there to take. I’ve seen many of those people and I think most people in the room see through them and ignore them.”

Meaningful networking, on the other hand, comes from looking for people you can relate to on a human level, Mr Condon says.

“Accounting is very much a people industry and you have to be constantly working at it,” he adds. “Those that approach it in a communal way will get a lot more out of it.”

Word-of-mouth achieves cut-through

Business owners must never forget that customer experience needs to match what is promised by previous customers’ statements. “Great experiences need to be consistent,” Mr Griffiths says. “Inconsistent service and experience overall is a major issue in any business.”

But if you can deliver on it, word-of-mouth marketing is more important today than ever before, he says. In the clutter of online marketing, social media and traditional advertising, word-of-mouth brings a level of credibility that simply cuts through.