A popular theme these days in the business world is saying that you are a “by referral only” business or that you concentrate on “word of mouth” marketing.  Now what does by referral only actually mean?  There are a few different schools of thought.

Some believe it is a status in business to achieve.  It provides a feeling of exclusivity and doing any sort of  marketing would be seen as tainting this “club” of sorts.  Members of this club focus most of their attention on going to networking meetings with the goal of building  a power circle that will refer to them on a regular basis.  In order to make a strategy like this successful, one must constantly be in front of those with the power to refer.  Referrals in this strategy can ebb and flow depending upon the whims of whichever networking groups the business professional belongs to.

There are others that believe the only way to achieve a by referral only business is to have a strategic marketing plan.  These business professionals build relationships with past clients and referral partners through various marketing methods such as newsletters, e-zines, cards, letters, small gifts, and more.  Through systematic means, they are able to obtain predictable and track able referral results.

Now, what about word of mouth marketing?  It can be a great tool, but I caution you that on its own it is very dangerous.  Why?  Because of the telephone factor.  What is the telephone factor?  The telephone factor is the result of every game of telephone we ever played as a children.

You remember how someone would start with one phrase and by the time it made its way around the circle it came out completely different? Well, when one depends upon word of mouth advertising as their only marketing tool they are in a sense tempting the fates of the telephone game.  Someone is bound to completely wreck your message.  It is the nature of humanity.

But is word of mouth advertising completely useless?  No, but it should be the by-product of your marketing and should be delivered in a carefully crafted message time after time so that the person trying to help you out knows exactly what to say about you.  Otherwise it can do a great deal more harm than aid.

Those who believe word of mouth advertising and being by referral only are a realistic alternative to a well thought out marketing plan that is strategically implemented are losing out on a great deal of potential profits.  Much like an ostrich sticking its head in the sand does not make it invisible, saying that you are by referral only does not make it so if you do not have a strategy to build those referrals.