How often do we make a high value purchase decision based on our instincts alone? How often do we buy a goods or service without exploring our options and doing comparative analysis? The answer in the case of high value and high utility goods or services is almost always “Never”.
With the advent of social media and online customer review forums, the traditional word of mouth marketing has gained a status far more important than ever. The consumer research company, Nielsen, states that word of mouth recommendations from friends and family, often referred to as earned advertising, are still the most influential, as 84 per cent of global respondents to one of its surveys duly noted.
Given that the UAE has among the highest web penetration rates (71 per cent) and was among the 58 countries polled in the Nielsen survey, I think it is safe to assume that word of mouth is also the most trustworthy source of business locally.
If businesses were to start relying on word of mouth, what sort of strategy should they put in place? Tom Peters, author of Thriving on Chaos, regards it as one of the key ways a business can bring in new clients. He asserts that one has to be “just as organised, thoughtful and systematic about word of mouth advertising” as with other forms of marketing. Yet, “you never see a word of mouth communications section in marketing plans,” he writes.
Many professionals make the mistake of thinking that developing good word of mouth is about providing “good customer service”. While this is a prerequisite for long-term business success, it alone will not develop the volume of business that can be generated by “referral marketing”.
At best, it may help to reduce or eliminate negative word of mouth marketing, while perhaps making a small contribution to positive word of mouth. Yet, too many entrepreneurs, especially new ones, mistakenly believe that simply providing an excellent product or service ought to be enough to entice people to flock to their doors.
Regardless of fluctuations in the economy or the activities of the competition, businesses need to consider implementing a referral marketing strategy, whereby recommendations do not just come from friends and family but from other contacts with whom strong long-term relationships have been built.
A prosperous referral marketing strategy therefore basically entails two tenets:
* Developing a powerful and diverse network of contacts;
* Creating a positive message, delivered effectively.
Given the diverse cultures that exist in the UAE, most entrepreneurs might find themselves comfortable to network among fellow business people within the same community. It’s a natural human trait.
Those who do stretch out of their comfort zones and reach across communities find themselves having a competitive edge as they are able to access markets beyond their normal means. Opportunities are tremendous if one were to consider what networks are attainable through building such a diverse network of contacts, especially in the UAE.
Referral marketing is a paradox. It is a component of what is called “the world’s best known marketing secret”. How, you may be wondering, can anything be the “best known” and a “secret” at the same time? Therein lies the paradox: virtually everyone recognises the phrase and its importance to the average businessperson, yet they are often far less clear on the specifics of harnessing this all-too-elusive commodity.
It is one of the world’s most effective, yet least understood, marketing strategies.
The UAE is home to numerous business and social networks. There are also organisations like the Referral Institute offering actual courses and consultancy to any business looking to implement a referral marketing strategy. With Dubai hosting the Expo 2020, it is evident that more and more businesses across diverse sectors will be attracted to the opportunities that lie ahead.
Competition can only get fiercer, and to continue sustainable growth and success far beyond 2020, one would require a firmly established client base. All it takes to have that is a firm commitment towards building networks, which will produce incredible results in the long-term.
— The writer is the Middle East and East Africa national director for BNI.