Continue To Build With Word Of Mouth
Geoff has a small business that's been successful, and he wants to know how to continue to grow the business with the money he has. He's built it so far by word of mouth.
QUESTION: Geoff in Wyoming has a small business that’s been successful, and he wants to know how to continue to grow the business with the money he has. He’s built it so far by word of mouth. Dave recommends reading Tribes by Seth Godin to start.
ANSWER: Marketing has shifted dramatically in the last decade. A good guy to read to get your brain around this is Seth Godin. His latest marketing book, Tribes, is a must-read in what you’re talking about. With the advent of the web and social media—Twitter, Facebook, and so on—what happens is word of mouth now goes exponential. Word of mouth used to be a neighbor telling their next-door neighbor. Now, word of mouth is I can drop something on Twitter, and 200,000 people know it in four minutes. Or, one of them picks up something and spreads it. Have your website and your social media platforms cultivate the growth of your tribe, which is customers who believe in you, and then continue to grow your databases around that and supporting and encouraging the hand-off of ideas and the hand-off of concepts.
It used to be that when a movie came out, the way that people heard about the movie was in the newspaper. You’d see the newspaper movie ads, and your friends at school or down the street were talking about it. Or when a book came out, that’s often the way it was marketed. Nothing is marketed that way anymore. It used to be that it required you to go big and spend a bazillion dollars on a television or radio ad campaign. Now, it doesn’t require that you do that.
I like that you’ve grown this word of mouth. I don’t like that it sounds a little stale in that your customer base is not renewing—you’re not getting enough new blood in there to suit you. I agree with your concern on that. I think you’ve got to do some things to institute new blood. If I’m going to move from what you’ve been doing very successfully into traditional advertising, I’m going to do it very gradually and with a lot of testing. There’s a good rule in advertising: target, test, and measure. Target who you want the ad to hit. Test the ad. Measure the results and adjust. If you don’t measure the results in advertising, you’re just throwing crap against the wall to see what will stick.
You need to do some reading on marketing to high-net-worth individuals. There’s a book out called Getting to VITO. In other words, how do you get to the head guy inside a company? The same way you get to high-net-worth people. I’ve got to tell you, very little advertising affects me. I’m a high-net-worth guy. A very high percentage of services and goods that I buy are direct referrals from somebody. You just don’t get to me through TV.
Long before I spend money in traditional advertising in your world—now that you’ve told me all of these things—you’ve got to read two or three of Seth Godin’s books. Meatball Sundae and Tribes. They’re not long books; you’ll read them both this weekend. You’ll start to see what I’m talking about, and then get on his blog and start reading his stuff. He’s one of the most brilliant marketing minds out there right now. You might even email him. A lot of times, he’ll email you back.
What I would love to see you be able to do is take your natural referrals that are occurring and be very intentional about those to pour gasoline on them. Before I buy a full page ad in High Net Worth Magazine or whatever you want to call that, I would spend that same amount of money encouraging my existing customers to send me their friends in a formal and direct way. I would send them all Kindles or iPads just to say thank you and by the way, who else could we serve? Maybe not quite that blunt, but I think those kinds of campaigns are going to go a lot further in your world. I could be wrong, but I want you to at least study that side of it, because I think you can take what you’re doing and pour gas on it and get a lot further.