By FoodStorm | May 12th, 2016
Word-of-mouth referrals are a powerful way of generating awareness and trust, and in turn more sales for your food and catering operations. The tools of the digital age have made word-of-mouth referrals even more effective because it’s now easier than ever to share your opinions and have them amplified online, through platforms such as social media and email. At the same time, businesses have more tools at their disposal to support, drive, and track word-of-mouth referrals and their impact.
Research has shown that 92% of customers trust recommendations made by family and friends above all forms of advertising. 74% say it’s their key influencer when making a purchase decision, while online opinions from other consumers ( 68%) and online reviews ( 88%) are also relied upon. Word of mouth is also powerful for influencing the purchase decisions of B2B buyers.
Other research has shown that word of mouth is number one when it comes to buying things like financial products and big-ticket items for both millennials and baby boomers. Marketers are aware of this, with 64% agreeing that word-of-mouth marketing is more effective than traditional marketing and half saying they incorporate it into their marketing campaigns.
Clearly, word-of-mouth referrals are valued by businesses, marketers and buyers alike, but what can food and catering businesses do to fully leverage their customer trust and generate more referrals?
Many businesses make the mistake of exclusively focusing on accumulating new likes, fans and leads, to the extent of neglecting existing customers. Focusing on sustaining connections and making them deeper over time can benefit your referrals.
Your marketing activities should continue after every transaction because that’s where the referrals are generated. Focus on delivering great customer service from initial engagement right through to delivery of your catering or event, and beyond..
Your post-transaction process should include ongoing customer support, expert advice to assist the customer with their event, and post-event feedback – which is crucial for improving your processes and maintaining customer satisfaction.
After you build loyalty through these efforts, you can progress these customers to the advocacy stage, which is where they are encouraged to make referrals to their network. Both the loyalty and advocacy stages require ongoing maintenance with consistent contact, reminders, and/or support. For example, you might do this with valuable relationship-building content via email.
Provide incentives to motivate influencers or advocates for your food business. Research shows that influencers are most likely to give referrals when they have a direct incentive (such as discounts and gift cards), social recognition, or access to a loyalty program.
Your word-of-mouth strategy should be integrated into marketing campaigns and advertising efforts. Use the case of multinational fast food giant Chipotle as a valuable lesson in realigning your overall marketing strategy to leverage the power of the referral.
Chipotle, which spends just 2% of its revenue on advertising, seems to have mastered the art of generating sharing and referrals in its marketing. The company has utilised everything from haiku-writing competitions to free food festivals and sponsored news columns to generate buzz, word of mouth, and brand awareness.
As an example of its referral mastery, Chipotle gives select pro athletes free-burritos-for-life cards, which are often shared by the athletes on social media. These powerful word-of-mouth endorsements from athletes cost the food giant little when compared to the outlays required for paid endorsements, and the resulting endorsements on social media come with the added benefits of being totally genuine and novel, especially when compared to paid endorsements.
Similarly, keep in mind that your referrals will come from people other than customers, and that other businesses in your area or that you partner with can be your best brand advocates. Businesses in your geographical region often service the same customer base but with complementary rather than substitute products that compete with yours. For example, Venues, Hire Companies or Florists.
Always connect with other businesses with the view that they could be your loyal advocates, and work to develop a reciprocal referral relationship with them. As they direct business your way, you can do the same for their business.
Share your expertise generously with customers to encourage them to talk about you and share your content. Whether it’s through your offline or online connections, think about the ways in which you can integrate customised, personalised content for customers so that customers will be motivated to talk about your expertise to others, and indirectly, refer your business to others. Even as you encourage customer to talk about you to others, you are positioning yourself as an expert in the field.
Your referral strategy should reflect your unique customer base and business operations. To succeed in generating referrals, you will need to understand your customers, how they get their information and what they are influenced by when making purchase choices. This research allows you to devise a marketing strategy that will be truly effective.
Tracking and measurement are also vital. Whether you use formal surveys, online tracking dashboards and tools, or some other tracking tool, keep it fairly simple but with the right variety of functionality and level of information for your needs.