The most powerful form of marketing

A friend talking about a new product, getting excited, will sell us on the idea that we should buy that same product a million times faster than some 30 second television commercial.

Word of mouth is the most powerful form of marketing that exists.

It's also the slowest to achieve any substantial results.

A friend recently asked me about the power of referrals. He wants to drive word-of-mouth marketing for his new business. But he wants it to happen fast. That's like asking an elephant to tiptoe across the floor. 

He wants to pay a referral fee to customers who generate new business for him.

Here was my response.

Money will motivate some people to give you a referral. Profit margins are good enough to afford referral fees. However keep in mind that most customers will gladly refer for free if you do a good job with an amazing guarantee. The reason most people don’t refer companies to their friends isn’t because they aren’t paid. They don't want to risk their friendship credibility. If the referred friend has a bad experience with the company, it could hurt the friendship. To most, credibility is way more important to them than a few bucks.

Think about the other side of the equation. If you were referred to a business by a friend and found out the friend got kickback, you might feel used.

With the exception of network marketers, most people don't put their friendship for sale. 

To combat that all those negative feelings, a business owner can create an insider’s deal or a friend’s and family discount.

Offer this instead:

If a client knows anyone else who might also like the product, not only give a referral fee, but also  give the referred customer a percentage friend and family discount. Now everyone wins and no one will feel taken advantage of by a friend.

Remember, the customer deflector shields will be up. How do they come down? When a business is able to help others. A pay it forward discount to our friends is seen as helping others and not taking advantage of a client's personal friendship network.

Social Media is a form of Word of Mouth marketing. It can speed up things significantly. But the credibility factor will be important to uphold. Most won't share in fear of hurting their own social standing. They will protect their network, and their credibility unless they know without a doubt that you won't let them or their friends down.