Why I don’t count on Word-of-Mouth Marketing for Sales

September 21, 2018

 

 

 

I hear this a lot in the training industry, “I count on ‘word of mouth marketing for sales”.

 

If you’re hitting your revenue targets through word-of-mouth marketing, then that’s wonderful. This is something many aspire to. You probably have a very unique corporate or personal brand.

 

But what should you do while you’re still building up your brand and reputation? Here’s my personal perspective on why we don’t count on word-of-mouth marketing.

 

Disclaimer: Do we get referrals and leads through word-of-mouth marketing? Sure we do. It’s about 5% of our leads. Another 5% is networking. 90% is plain old digital marketing, Search Engine Optimisation, Email blasts, and repeat clients. We’re also a relatively new business. We’ve only been doing this 5 years. Not as many people know us as compared to established firms, therefore we don’t have the luxury of waiting for recommendations.

 

So here’s why I think word-of-mouth marketing in the training industry cannot be counted on.
 

#1: Trainers are privy to confidential company info and play a strategic role

 

Training companies who work closely with HR and L&D teams usually receive confidential information on the challenges an organisation face because of their pre-training discussions – for example the strategic direction of a company, rising number of disengaged employees, underperforming managers, high level of employee attrition, or even possibility of retrenchment and staff cuts.

 

Increasingly, as we become more embedded into our clients’ organisations, we’ve been asked to sign lengthy, Non-Disclosure Agreements as this information can be dangerous for our clients’ competitors to know about, or to be published on a public domain.

 

As such, there is less motivation for a HR or L & D person to refer their go-to trainer or training company to other clients, especially their competitors.

 

Sure, a referral from one industry to a different industry (for example an F&B company to a transport company) is more common.

 

Or a referral from one department of the same company to another (e.g. Operations department to Customer Service department).

 

But rarely do we get F&B Company A referring us to F&B Company B – and we understand why.

 

Note: Referrals happen more in the speaking industry, which is very niche, where Event Company A may refer a speaker to Event Company B or Speaker A refers Speaker B to Event Company A.

 

#2: Word-of-mouth marketing is unreliable

How can you encourage your client to refer you to someone else? What’s in it for them?  Life and work is busy enough.

 

Unless you are lucky enough to have the most selfless and altruistic clients in the world, not everyone has the time or motivation to help you get a new client.

 

And why should they? It’s simply not their business or priority.

 

 

#3: Other modes of sales and marketing are far more transparent

 

If you consistently send out outbound sales emails, cold-call prospects, or run digital marketing campaigns, there are numbers and data.

 

We don’t cold-call – but we use simple, everyday tools, to know everything from duration website visits, demographic of website visitors, to your user: enquiry ratio. These are far more transparent as it gives you actionable data you can count on. Once you know this data well enough, you can spot certain patterns.

 

At Anagram, we know our numbers – on a weekly and daily basis – from how much time users spend on our websites, to which buttons clients are clicking on, to which website pages are functioning well, and which are not.

 

This gives us info on what the market and our clients want. In Design Thinking terms, this is similar to the Empathy stage, where you gather user feedback.

 

So we take the data, crunch the numbers, and build more ideations and prototype pages which we then test.

 

Once we have the magic formula – the secret sauce – we simply do more of it.

 

#4: Being proactive > being reactive
 

It’s lazy for us to just count on our network to give us business.

 

We prefer being proactive, anticipating what sales we are getting per month, so we can work harder at bringing in new clients if sales is not nearly enough.

 

And if we’re not hitting revenue targets, we want to understand why. Using a range of digital tools helps us understand – perhaps people aren’t spending enough time on our website, perhaps our text is too lengthy, perhaps it’s as simple as not getting enough website visitors.

 

How do you hit your sales targets? Please share or write to me at liyana@anagram-group.com.

 

 

About the Author
Liyana is Co-Founder and Director of Sales & Marketing of Anagram Group. Prior to Anagram, Liyana headed departments in Communications and Corporate Relations. Her background is in corporate PR. Prior to that,  she was Content Editor of Singapore Business Review.

 

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