My purpose today is to help you understand that there is a difference between word-of-mouth advertising and referrals.
You know, many of us find ourselves in situations where we make statements that appear to suggest that word-of-mouth advertising and referrals mean the same thing.
Well, they don’t.
So, without further ado, let me show you the difference between word-of-mouth advertising and referrals.
Referrals are deliberate
Word-of-mouth advertising is not. What this means is that, it becomes a referral when someone goes out of their way to make a conscious effort to attract one more client, customer or team member to the business.
Word-of-mouth advertising, on the other hand, takes place in a slightly different scenario.
Here is an example of word of mouth advertising.
A buyer or customer (or a completely disinterested party) remembers and mentions your business or its product to another person in a casual conversation.
Thus, while referrals happen because the person doing it is deliberately promoting a business, word-of-mouth advertising is something that happens simply by chance.
Referrals are methodical
Unlike referrals, word-of-mouth advertising is a random activity.
Since referrals are deliberate, those who are engaged in it create an efficient marketing system to follow.
Referrals happen because, someone had sat down to devise a method that would produce the most desired results.
Word-of-mouth advertising, lives up to its name. People talk, right? So they say what comes to their mind in any human interaction.
It is during such moments that someone may hear of a business or product and go ahead to approach them. This is the basic difference between word of mouth advertising and referrals.
Referrals have (and are) planned outcomes
The person implementing a referral programme knows the result they want.
So, that is what they focus on as they meet their prospects in any situation you can think of.
For a referral, the goal is to recruit and possibly sign up one more customer or team member. On the reverse side is word-of-mouth advertising.
That person who told you the other time about a product they thought (or hoped) you might like would most probably forget about the whole conversation minutes after.
To put it simply, they didn’t have any planned outcome for their “off-the-cuff recommendation”. Good for you and great for the business if you chose to act upon their recommendation. But that is where it ends.
Referrals produce better results
As you can see, the more deliberate and well-planned referral programme is bound to achieve better results for any marketing effort.
Sure, for a small business to succeed in selling its services, both referrals and word of mouth advertising are needed.
The only problem is that, if all you rely on is opportunistic word-of-mouth advertising (where you count on the goodwill of your customers) you will also have to settle for random, mostly unsatisfactory results.
This is why the best marketing professionals looking for the best outcomes spend more of their energies and resources setting up and implementing referrals programmes instead.