Last November I wrote about our foray into the cabinetry market by focusing on drumming up business by pulling building permits and cold calling the builder or remodeler. In this first of two entries, I want to focus on the benefits of referrals and targeted marketing.

We have all heard the adage that word-of-mouth marketing and referral business is the most important form of advertising a small business can have. I am in complete agreement.

I want to dig into a few reasons why this form of advertising is so powerful.

Customer As Spokesperson

Having a former client act as a spokesperson for your company is incredibly powerful. They grow your potential client base by advertising your business to their friends, family, co-workers, and circle of influence, which these days can be huge when you bring Facebook and Twitter into the mix.

We have received three jobs in the past three years, two of which were quite large, from someone who recommended us via social media. The best part is that the person who recommended us was not even a former client, but simply a connection we had made via social media. Their recommendation still carried weight, even though they themselves had never done business with us.

The recommendations provided by former clients brings with it a certain level of trust, confidence, and influence that no direct mailer, print ad, or search result can. This is also why word-of-mouth marketing can be just as damaging to future business as beneficial. If a former client can brag about your company to a dozen people, they can just as easily trash your company’s image to a dozen people.

Targeted Marketing

Referral business from former clients is usually very targeted, something traditional advertising could only dream of. Former clients, if you did your job right, will want to show everyone they know their recently completed project, which is great because that may mean your company’s name is mentioned far and wide. The client will also spend the most time talking up your company to people who are themselves looking to embark on a similar project. People love to help others, and one easy way for us to do that is to imparting the knowledge we have gained to those who are going through a similar experience.

In my next post I will discuss a real-world example of a stream of custom woodwork jobs resulting from these types of promotional efforts.