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“Word-of-mouth” and “Referral” Marketing are Different

Posted in Marketing Team

My earlier thinking was that they were the same, or at least a distinction without a difference. But, I don’t anymore, and from a law firm marketing perspective, you shouldn’t either. According to Miriam Lawrence at Automatic Referrals, relying on word-of-mouth business is passive, while a referral marketing system requires a business to actively work those who do or could refer business to you. Waiting for clients to walk in the door, based on the hope that others speak well of you, is not a good strategy.

Whether you believe this is playing with semantics or not, Miriam has several excellent points worth taking to heart.

First, even if 20% of your clients are “raving fans” (who think of you often and are proactively referring others to your firm), 80% are spending their time thinking about THEIR business, THEIR problems, THEIR mortgage; they are not thinking about you or your business.

Secondly, you need to be proactive toward your referral sources by sending them e-newsletters (with their permission of course) that they can forward on to others, and asking them to not “keep you a secret.” Of course, you can do a lot more with your referral sources than that, including:

  • Networking,
  • Entertaining,
  • Sending articles, or other items of interest,
  • Referring others to them, and otherwise
  • Keeping in constant contact with them.

The point is, that if you are relying only on word-of-mouth to get clients, Miriam reminds us that you’ll have a long wait.

  • http://www.yodle.com Paula Ferreira

    Word of mouth is great but as a an attorney, time truly is money. Below is a brief guide to insure you can capitalize on what is traditionally a slow period for filings. The credit crunch has started to hit consumers and small businesses in ways that are disrupting traditional recessionary dynamics.
    With the understanding that the most qualified clients are using the Internet in their search for an attorney, we have put together guide of the top five mistakes attorneys have made when trying to grow their business through the Internet:
    Top Five Mistakes You Need to Avoid:
    5. Attempting SEM (paid advertising online) on your own – A lot like a person representing themselves in court; it is just a bad idea and an opportunity cost. Regardless of who you use, make sure to evaluate the abilities to deliver trackable results. Here are some questions you need to have answered before you use any service:
    • Is the company BBB certified? If not, why not?
    • Does the consultant or salesperson understand your segment of the law and how you earn a living (if not, the leads may not just be expensive, they may end up being off the mark and costing you time in addition to money)
    • Does the company work with other lawyers in your field and can they show you results as examples?
    • What is the length of the agreement they require (annual agreements are unnecessary and often a sign of inability to deliver immediate results)?
    • Is their methodology accountable and sensible? If you can’t understand the process then you should proceed cautiously.
    4. Paying a flat fee or on a per lead basis to a lead aggregator – Not only can these be expensive on a per lead/per territory basis, but you lose the accountability in terms of how the lead was generated. In addition, the cost per client acquisition can be hard to track and even shocking when you do see the numbers. Make sure you know the following:
    • Is the lead shared with anyone else?
    • Not all leads are equal in value; the cost of a lead should not be the determining factor. Ask them to list the methods they employ to gather leads and what sort of reporting is available.
    3. Trusting that SEO (natural results) is the only method that people respond to – Yes, more clicks occur within the organic listings. However, it can be tough, if not impossible, to manage or track your campaign based on what is converting to new business from the natural listings. Look for companies that provide a blended approach; SEO and SEM. Be aware of off shore companies and others that do not provide transparency; if they working against the search engines they will be caught up to(as gamblers know: the house always wins).
    2. Not tracking your ROI – understanding your cost per lead and cost to acquire a new client is essential to your firms overall profitability. Without concrete measurement there can be no improvement. Look for services that offer trackable and detailed metrics. Also be sure their systems are able to be adjusted with additional costs to you.
    1. Not realizing how much time it takes to run a solid campaign – you’re an attorney, again, time is money, is your time really best spent running your own campaign?

  • http://www.inspirecard.net Drew Hunt

    Tom,
    I totaly agree, the larger and deeper connections you make with your network the more referrals you will recieve. Referrals and positive word-of-mouth are the most effective ways to build a business. While you can’t directly control how referrals are made, you can create an environment in which they can be made easily. If you want to learn more about hot to get greater referrals check out this free ebook (http://www.inspirecard.net/100-tips-to-business-networking/)