Alright, I know that word of mouth is the backbone to any good small business…or is it?

Working as a small business advisor I often start my conversation with the business owner with this question:

“How do you deliver sales for your business?”

When I hear the answer “word of mouth” what that often means is that “I don’t deliver sales to my business, they deliver themselves to me”.  This means they are being reactive, not proactive.  This is fine if things are going well or you have been established for a number of years.  When this isn’t so good is when you are in start-up or trying to stay up.

Word of mouth has 2 fundamental problems:

1. You can’t predict the type of customer you get

This is fine if you think every customer is a good customer – Unfortunately, they aren’t.  Read “The 4 Hour Working Week” by Tim Ferriss for more info on that!  As one of my clients that make signs said to me once, we get every type of customer from “Beware of the Dog” to Centra needing a full kit out.  Her frustration was that a “Beware of the Dog” could take nearly as long as the Centra.  They were pickier, irregular, and less clear about what they wanted apart from that they wanted it cheap!

It is best you know the type of customer that suits your business and that you go out and get them.  This way you will reduce cost, inefficiency and relationship building as you will know them or at least know their type.  Waiting for them to ring you will mean you could get anyone…

2. They always want it different and cheaper

Because they arrived on a recommendation, it probably means that they have an unrealistic expectation of the type of work and service that you provide.  A customer often will recommend someone that does “that type of thing” rather than the specific area you specialise in.  Worse still, if your referring customer was also a referral this gets even messier!!!

It is best to target the people that you know will appreciate you and value what you can do – those people are less sensitive about price and more concerned about the quality of the job, relationship and product.

If you are thinking well I can’t control the type of customer that responds to my advert, well look at your advert.  It is probably generic, unfocused and listing of a range of products and services that probably materialised because of the type of customer you were getting! And so we come full circle!

I see this everyday but would love to hear from you if you agree or disagree – there are plenty of ways to share your thoughts now on the site…so do it!!

Best of luck