What most business owners fail to recognise is the risk to the person who recommends you:

They put their own reputation on the line by telling their friends that you’ll do a great job. 

And most people don’t do that lightly.

We had a friend give us such a recommendation for someone to respray our campervan recently.  The business was effectively his; we just needed him to see the camper so he could give us a quote.  And that’s where the problems began.

So here’s a list of what not to do, if you want more business:

1. Make it difficult to see the client and give them a quote
2. Make the customer come to you
3. Be vague about times you’ll be there to see them
4. Leave them waiting outside your offices for 30 minutes
5. Put the phone down on them (after telling them you’re not really bothered about the work)

It beggars belief that in the current economic climate, small business owners are still wasting opportunities and damaging relationships with the people who recommend their company.

We’d love you to share if you have similar stories of people who talk themselves out of business.

That in itself is fantastic marketing – giving consumers choice and ensuring that they LOVE every song on the album, so they’ll probably listen to it more and share it with their friends / play it in the car so others can hear it etc.  Equals more sales – genius.

But the next step is even better – you can sell your version of the album to your friends and make £1 per sale.  So you can be repaid for recommending the album.  Making you talk about it even more.

Personal recommendations (or word of mouth) are the best form of marketing there is. And by rewarding your customers for sharing your product (or actually their product, as they designed it), you’re empowering them and giving them something else to talk about.

I love marketing that puts the power in the hands of customers and also generates more sales.  Marketing should be a win-win and this is a great example.  Well done Kaiser Chiefs.  I hope more people download your album – http://www.kaiserchiefs.com/

When asked how important marketing is to the success of a small business, he said “To my mind, that’s a bit like asking ‘how important is air?’.  In its absence you die.”

Doug suggests that marketing is one of the greatest challenges small businesses face and, if they can succeed at marketing, they tend to be successful, regardless of the other elements of the business.  (This is one of the reasons we run our free marketing seminars – so we can share some of our marketing knowledge with as many businesses as possible.)

He also talks about word of mouth marketing, which he describes as “the most important achievable outcome any marketer could hope for.”  Doug identifies that the tools which amplify word of mouth are beginnning to become the most important marketing tools in the world and suggests that the new challenge is how the old truths apply in the new context.

This really was a great interview and perfectly sums up the power of marketing in a business.  It also sums up the complexity of the subject and and the steps to a successful marketing campaign.  (So please ask someone for assistance if you’re struggling to market your company.) If you have chance to see Doug Richard speak, or read any of his articles, I would highly recommend them.

Many of us receive lots of business through word of mouth marketing – someone else says we’re good and recommends us to a business / customer they know.  And the business owners we meet often feel that whilst it’s a great marketing method, they can’t influence it.  But what if that wasn’t the case?  What if you could alter and increase the amount of recommendations you receive?

If you haven’t come across the Referral Institute, it would be worth ‘Googling’ them and finding the contacts in your area.  This is a business that specialises in boosting your referral business, so you can predict the returns from your marketing activities in this area (something you’ll know we highly recommend, if you read the blog regularly).

One of the Referral Institute’s franchisees is a trainer on our business academy programme – and she’s fabulous.  She’s running a seminar on the 22nd July at Shaw Hill Golf & Country Club from 1pm to 4pm.  There is a small ticket charge, but I can personally vouch that the contents are worth way more than the cost of entry – especially if you take your network of introducers with you.

To book a place, or find out more, email Carmen at carmen@referralinstitutepr.co.uk.

For example:

• Do you keep people waiting? If people call you, email you, recommend you… how quickly do you get back to them?  Are you very responsive, or are you slow to return calls and quotations?  (These are income-generating activities and people may be ready to buy now – nothing other than existing customers is more important)
• Could you communicate with your customers more effectively? There is nothing customers like more than to know what’s going on – particularly if you can’t deliver what you promised.  Just look at British Airways’ recent example in the volcanic ash eruption, where they turned bad press regarding the strikes into good press about their service levels and the way they looked after their customers in a crisis.
• Do you make it easy to contact you? Is your telephone number on every page of your website?  Is your email address on your business cards?  If people want to call you, can they do so?
• Talk to People. When customers do call, do they speak to a machine or a human being?  Is there an option on the machine to speak to an operator?  If we have an issue, we usually want to chat it through with someone – is that something you make simple (or would you rather they didn’t call)?
• Do you ask for complaints? These are far and away your best chance to create a loyal customer – people want to know how you’ll react when something goes wrong.  A complaints handling system and staff empowered to deal with such issues can be worth their weight in gold.  No-one expects you to be perfect all the time – but they do expect you to admit when you’re wrong.
• If customers are happy, do you ask them to write you a testimonial or recommend you to friends and family? If you ask, they just might.
• Do you say ‘Thank You’? If people do recommend you, how often do you call them up and say ‘ thanks’ or send them a gift?  If you thank them, they might just do it again!

I could write tips on customer service for weeks – and still not cover everything, but hopefully these will give you a starting point.  If you have any to add, please post a comment and share your experiences.

But, do you know who’s recommending you?  If you aren’t measuring where your customers are coming from, you can’t be sure – and you can’t thank the person doing the recommending.

Do you think that if someone recommending your company received a ‘thank you’ from you, they might recommend you again?

Could you also perhaps incentivise people to recommend your company, providing they are happy to do so?

This is how business has been done from the very beginning – if you are looking for a plumber, you’re likely to ask your friends who they know, rather than call someone cold (and risk them letting you down).  If they know they’ve been recommended, they’re likely to do an even better job, as they don’t want to let two people down.

If you could increase you referrals by just 10% in 2010, what difference would that make to your business – and profit margin?

This week is a series of the most cost-effective techniques we use with our consultancy customers – I hope you find them useful for you in achieving your goals in 2010.

They include:

• Customer Retention Tips
• Re-connecting with Prospects
• Maximising your Word of Mouth Marketing

You can achieve most of these without spending very much money – and your returns will be higher than many other forms of marketing.