How to improve word-of-mouth marketing

Word-of-mouth marketing is still the most powerful marketing tool for most businesses today. So, here's 5 tips on how to generate better quality referrals.

I have tracked and plotted the power of the referral like a positive thread of goodwill, weaving through the fabric that has helped shape DSR Branding. I don’t think we could have had the start we did, were it not for some amazing referrals.

Even with an abundance of new marketing tools and platforms at our fingertips, word-of-mouth marketing is still the most powerful marketing tool for most businesses. In a recent “Global Trust in Advertising” study by Nielsen, 83% of people polled said they most trusted the recommendations of friends and family. But word of mouth isn’t just our inner circle; 66% of those surveyed say they trust consumer opinions online (the third most trusted format). A stranger’s word of mouth is more compelling for a majority than most other forms of advertising.

When searching for where to stay in Bali, your next dentist, hairdresser or good accountant, we obviously much prefer to rely on friends, family or online review networks than a simple and impersonal google search.

I often shake my head at people’s status updates asking for recommendations, thinking “Surely you could just google that?” People are much more likely, however, to trust the word of a mate than the first listing on Google.

For small-to-medium businesses, especially those in business to business industries, referrals are an essential channel for new work. So, as a founder, how can we increase word-of-mouth?

Focus on quality over quantity.

If your focus is quantity, there are quick tactics, like paying for them through incentives or referral plans. I’m not a big fan of this as I believe this cheapens the integrity of the recommendation, the referral becoming an act of commerce and not an act of trust. Such avenues can deliver quick results, but I don’t believe they’re good for your business long-term. Especially if the customers find out you’re paying for their business.

Do a really, really good job.

Another way to attract referrals is to do a good job, for a really cheap price. Also not a fan of this, but it does have a place. Remember how people used to speak about Uber when it first launched? “It’s super easy, and much cheaper than a taxi.” Compare this against their present and newer competitors. “Hey, try out DiDi or Ola, I’ve got a code and you’ll get $10 off your first trip. Plus, it’s cheaper than Uber.

Incentives and cost cutting tactics attract a certain type of customer. One with no loyalty to your business; someone who’ll always switch for a better deal.

The alternative, and our preferred way to gain more referrals, is to do a really, really good job.

To accurately promise, set and deliver on expectations, and seek the ‘one percenters’ that go above and beyond to leave a great reminder of the experience.

The handwritten thank you cards that John Winning from Appliances Online had support staff write each night to customers. The water bottle and mints from a friendly Uber driver. They are separate to the primary service but are often anchor points for what people talk about when recollecting the experience.

Don’t be affraid to ask

Finally, once a project is complete, don’t be afraid to ask for a referral.

“Hey, it’s been great working together on this project. Our business grows through great word of mouth referrals, do you know anyone who would benefit from working with us?”

It can seem quite forward. But sometimes, if you don’t ask, you don’t get.

However, there are cases where I would not ask for referrals. While a project may have been successfully delivered to the mutual benefit of the parties, it’s entirely reasonable to not want to work further with that client or others like them if you weren’t a good cultural fit together. It could also be the case that you did the work as a one-off in an industry you’re not actively seeking more work in. The referrals you might get from a client are outside the scope of work you’re interested or capable of dealing with.

It’s not only important to ask, but also to educate on what types of referrals are right for you. This is about educating your audience on your services and how you can add value to different businesses.

5 tips to improve your word-of-mouth marketing strategy

  1. Be clear/descriptive with what types of projects you’re asking for. 
  2. Give more referrals. Reciprocity is a powerful form of influence.
  3. Create a process/system for when you get given referrals. i.e.
    a. Acknowledge and thank them for the referral
    b. Make sure you keep the referee updated on how it goes
    c. If it does become a project, send a thank you card and small gift to the person referring
    d. Keep them updated with the project success
  4. Say no to the wrong referrals. Politely. 
  5. Showcase the success stories. You get more of what you put out.


I’m going to honour my own advice here and mention a few businesses who have never let us or our clients down. Most businesses would benefit from having them in their database.

For office, car and building signage: Justin Hammond from Signs and Designs.

For the best electric stand-up desks: Lewis Bach from Zen Space Desks.

For uniform embroidery: Debbie Lane from ABC Embroidery

These aren’t paid plugs and have no commercial element. I simply enjoy it when these businesses help our clients and friends do cool stuff.