Episode 183: Word of mouth marketing with Steve Gordon

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Word of mouth marketing is the #1 way to gain clients in 95% of agencies. Learn processes to scale and leverage your word of mouth marketing.

For 95% of all agencies, referrals and word of mouth are the #1 method of gaining new clients. On the one hand, that’s great. It means your clients, friends, and peers love and trust you enough to introduce you to their friends and colleagues.

Unfortunately, they’re not always the right clients for our agency.  What if they aren’t a good fit? What if they are the furthest thing from a sweet-spot client for who you are and what your agency does? We have to be more intentional about referral and word of mouth.

That’s why my conversation with Steve Gordon arrived right on time. Steve has developed processes and systems that you can use to leverage word of mouth, qualify referrals, and scale your efforts so you don’t have to spend more time in one-on-one meetings than you have hours in your already stretched-to-the-limit day.

Steve Gordan started the Unstoppable CEO in 2010. He has invested nearly two decades into studying, implementing, testing, and proving the strategies that work to sell professional services.

Through Unstoppable CEO, Steve shares this knowledge with growth-minded professionals who are ready for world-class help with their marketing. He has become an expert at leveraging and scaling referral systems and word-of-mouth marketing techniques.

word-of-mouth-marketing

What you will learn about word of mouth marketing in this episode:

  • How to leverage your word of mouth and referrals
  • Why you must vet referrals to ensure they are a good fit for your agency
  • How to use presentations as referral machines
  • The many ways to leverage technology in gaining referrals
  • Why human nature creates points of interaction that don’t change over time
  • How to become a successful journalist
  • How to turn podcasts into referral engines
  • What it means to gain total business freedom
“When people talk about the fact that referrals don't scale, it's usually just because they’re not doing it right.” – @steve_gordon Click To Tweet “There are really three dimensions to business freedom: financial freedom, freedom of time, and freedom of relationship.” – @steve_gordon Click To Tweet “Word of mouth done right can be intentional and it can scale.” – @steve_gordon Click To Tweet “The big mistake people make with word of mouth and referrals is that they just sit back and hope that it happens.” – @steve_gordon Click To Tweet

Ways to Contact Steve Gordon:

Transcript: Word of Mouth Marketing

Speaker 1:

It doesn’t matter what kind of agency you run, traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. That’s why Agency Management Institute started the Build a Better Agency podcast a few years ago. We help agencies just like yours, grow and scale your business, attract and retain the best talent, make more money and keep more of what you’ve made. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody Drew McLellan here with Agency Management Institute. Welcome back to another episode of Build a Better Agency. I’m super excited that you are here. Just a couple of housekeeping things. Just a reminder. Remember, we are giving away one seat every month to one of our workshops, or you can choose access to one of our online courses, if you would prefer that. And all it takes to be entered into the drawing is to leave us a rating or a review on one of the bazillions of different podcast hosting sites, iTunes, Stitcher, Google, lots of others where you may be downloading the podcast. And a couple of hints for you, it’d awesome if you shoot us an email and let us know that you’ve left them. Sometimes your username doesn’t really equate to your actual name and so we have a hard time identifying who the winner is, and I want to make sure that we are able to give that seat away every month.

So, go ahead and do that if you are so interested and we greatly appreciate those ratings and reviews. So, this week, what I want to talk about is this idea of referrals. So, when I talk to most agency owners and I say to them, “Tell me about your business.” They tell me about their agency, maybe what they specialize in, how long they’ve been around, how many people they have. And then when I say, “So, how do you get new clients?” Without exception, almost every single time, I can think of maybe… No, I can not think of a single exception. Every agency owner says to me, “Well, most of our business comes to us through word of mouth and referrals, and we find that those are the best clients.” And you know what? I don’t necessarily disagree with it. I think that there is something awesome about a client who comes to you already pre-sold, who already believes in you, who already trusts you because someone they have confidence in has given you the gold seal of approval.

The challenge with that is a couple of things. Number one, you can’t control how often it comes in. So, if you’re sitting back just waiting for the referral machine to work or the phone to ring, that can be a really challenging and worrisome position to be in, if things are a little soft in your agency, if maybe you’re a little overstaffed, if a client walks on you. So, the passiveness of that makes me anxious. And the other part of that, that makes me a little nervous for agencies is what that means is you’re actually actively building your business. You’re not determining who you should serve, and who’s the best fit for you, who is that sweet spot client and going after those folks. When you sit back and you wait to see who walks in the door, then by default, you have to serve whoever walks in the door and I just want there to be a better way for you.

So, that’s why I have invited Steve Gordon to come on the show today. So, Steve is a bestselling author. He started a company called the Unstoppable CEO, and he also hosts a podcast by that same name, the Unstoppable CEO. And he does a lot of work for service businesses. So, what’s interesting is the way he got his start is right out of college, he started working for an engineering firm who interestingly, not unlike most agencies grew their business at that time, mostly by referrals and word of mouth. And he was charged with growing that business and ended up growing it by about 10 times what its gross revenue was. 10 years later, it took him a while to get that done. But what he did was he sort of solved the mystery of, “Is there a way to be more assertive, to be more in control of word of mouth and referrals? Can you take what is the best part of word of mouth and referrals, and can you leverage it in a way that you do have more control over not only how often the leads come in, but which leads come in?”

And so, I am going to pick his brain about all of those things. Interestingly, some of their clients work with our agency. So, I think you’re going to hear a lot of stories around how referrals can be a great way to develop your agency, but maybe there’s a better sort of 2019, 2020 version of how we do the referral game, so that it’s more in our control, and it works more to our favor. So, with that, let’s jump into the conversation. Steve, welcome to the show.

Steve Gordon:

Hey, Drew, I’m glad to be here. Thanks for having me.

Drew McLellan:

You bet. So, early in your career, your story sounds so typical to what a lot of agency employees and owners experience, which is you walked into an existing business, in this case, it was an engineering firm, if I understand it right, and they were doing fine. They were mostly growing by word of mouth and referral, but you were charged with really growing the business and having to look beyond that word of mouth and referrals. So, talk to me about what you learned in that sort of baptism by fire moment, and what are some of the takeaways that you now coach and teach clients and then also have shown up in your podcast and your books?

Steve Gordon:

Well, I learned that there was an awful lot that I didn’t know and it really took me several years. So, I walked in to that that firm, I was the 10th employee in the firm and right out of college. And after about four years, I got pulled aside by the founder and he said, “When you come back [inaudible 00:06:02] to be out with the birth of our first child and I was off and he called me and he said, “When you come back, you’re taking over.” I was caught off guard by all of that. So, I came back and all of a sudden, you know, here we are, we have this successful firm and I’ve got to figure out now, “How do we keep the party going?” It took me a little while. It took a year or two before I started to wrap my head around this whole thing of marketing and sales.

Now, I think a lot of agency owners have an advantage in that you’re already in the marketing business, you’ve got some idea of how all of this works, but for me coming from an engineering background, I had really no idea. I mean, about the best we could do was hope that the phone would ring from a referral, and it did often enough that we kept growing, but we didn’t know what day it was going to ring. Some days it would ring off the hook. We might go for a month or two without it ringing at all. So, we didn’t have any control or even influence over that process.

Drew McLellan:

Many agencies live on the word of mouth and referral new business strategy, and my concern with that is, yes, there’s nothing wrong with filling in the gaps with that sort of business. But a couple of issues, one, to the point that you’ve made, which it’s completely out of your control. It shows up when it shows up. So, if there’s an urgency on your side, there’s nothing you can do to trigger an urgency on the other side. And my bigger concern honestly, is what it means is you’re not really building your business on purpose. You’re taking whatever walks in the door as opposed to really identifying who are the sweet spot clients that you can delight and you can create an ongoing relationship with because they have the right set of needs for what you can deliver so that you have a sustainable business. That’s tough to do in just the referral and word of mouth side of the business.

Steve Gordon:

Well, I actually disagree. I think when people talk about referral and word of mouth and they say, “Well, it’s unpredictable and you don’t have a lot of influence over.” What they’re talking about is this passive word of mouth.

Drew McLellan:

Which is what most of them mean, right?

Steve Gordon:

Yeah. That’s what most people mean by it. But if you do referrals and word of mouth the right way, and I think we’ll get to this, it’s something that’s very intentional and it’s something that actually can scale, at least far enough for most service businesses without you having to get into a lot of the paid acquisition channels and it’s got a lot less risk. And so, we can get into all that, but the big mistake people make with word of mouth and referrals is that they just sit back and hope that it happens. It’s like, I show up, “I did a really great job for you Drew. I’m going to sit back and just believe that if I keep doing that really great job for you, you’re going to send somebody my way,” and it doesn’t work like that.

Drew McLellan:

Well, and I think that’s what I mean is that my concern is that it’s such a passive way. Most agency owners probably like most people in the engineering world, aren’t super excited about sales. And when they think of sales, they think of it as being intrusive and that they have to cold call and all the things that make somebody go, “No, I’m just going to stick with word of mouth.” So, I know that in some of the things that you teach, you have some methodologies around how to take a passive tactic, like referral and word of mouth, and actually put some action behind it so that you do have more control over it. So, let’s talk a little bit about that. So, how does someone take something that typically is, as you said, I’m going to sit back and wait and create some fire underneath it.

Steve Gordon:

Well, the big problem is in the way that we view referrals. So, for most of us, when we talk about referrals, what we mean is that one of your clients has held someone by the hand that they know, and that they care about and who, they, have now realized has a problem you can solve. And they’ve taken them by the hand, they’ve driven them over to your office, they’ve sat them down in front of you with checkbook in hand and said, “You need to hire this agency.”

They’re pre-sold, they’re ready to go and it’s easy. And those are great because as you, I think, very accurately pointed out, most agency owners aren’t that excited about sales. The problem with that is that we’ve delegated then the most difficult job in the business to an unpaid and untrained sales force.

Drew McLellan:

Outside of our control.

Steve Gordon:

Yeah, totally outside of our control. And they’re not that motivated to do it because they’re just as uncomfortable with selling as you are in most cases. If they’re another business owner, they’re struggling to do it for their own business, let alone do it for yours. So, that’s really the dynamic that we’ve tried to rely on here is this unpaid and untrained sales force and the hope that they’re going to go out and prospect well for us and pre-sell those people and all of that.

Drew McLellan:

And by the way, do it to the right people who are going to be a good fit for us, right?

Steve Gordon:

Yeah, absolutely. I mean, your clients have no idea. Most of them don’t even understand what you do, frankly.

Drew McLellan:

Or understand a sliver of what you do. Whatever you did for them, they think, “Oh, you’re that, that’s what you do.”

Steve Gordon:

Exactly. So, that becomes a big problem. You’ve now abdicated your responsibility as the business owner and put it off on this other group. And if we change the way that we think about referral from this bottom of the funnel, pre-sold ready to do business person and start thinking about referrals as a way to generate leads, and then take the responsibility to take that lead and move them through an entire process that educates them on the problem that they have, the consequences of it, the solution that you offer, the whole normal marketing process. But instead of taking them from where they’re pre-sold, we take them further back in the buying process, and then we take responsibility for shepherding them all the way through, we’re going to have a lot more success. So, that’s the first big shift and what I found in working with business owners is it takes a little while for them to rewire how they think about referral in that way.

So, that’s the first piece of it. Now, when you get to the point where you say, “All right. Well, a referral isn’t this pre-sold person. It’s really just a lead that comes to me from someone that I know that already trusts me.” Then you can begin thinking about, “Well, how can I facilitate that? How can I make that process easy?” And we can talk about a whole host of ways of doing that but that’s really, then the question you want to start asking is, “When I look out to my network, when I look out to my client base, how can I make them introducing me in the least risky way? Something that would be within their interest to do.”

Drew McLellan:

So, your definition of referral is not that somebody says literally or figuratively, “I’m going to drive you over to this agency’s office.” Or, “Here, let me dial your cell phone for you, so you can talk to the agency owner.” But it’s really just dropping someone into the top of a sales funnel and that that you have a funnel that then facilitates. So, it’s really just another way to get someone into the funnel, right?

Steve Gordon:

Absolutely. That’s a powerful way to do it too because they’re coming based on recommendation.

Drew McLellan:

So, there’s some trust built in, absolutely. So, let’s talk a little bit about what are some ways that you can make it easy or encourage your referral sources, your raving fans, to talk about you and move a prospect to the edge of the sales funnel and then give them a loving shove right in.

Steve Gordon:

Sure. So, the key to doing this is having a point of view. “This is how we do things. This is why we do it in this particular way.” And every business I’ve ever come across has that because every business owner will look around at all of their competitors and go, “They’re doing it wrong for all of these reasons. So, we have our way of doing it.” Then we’ve got to articulate that. And the best way to do that is through content. And for agencies, this ought to be a relatively easy thing to do because you’re in this business. You get the whole idea of content marketing.

Drew McLellan:

And this by the way is the subject of a book that I just co-authored, that’s coming out this summer, which is this exact idea of all the people on the planet who should be able to do content well, it should be us, right?

Steve Gordon:

Right. And so, really all that you’re doing is putting that content together in an organized way and making it look valuable to the end prospect that you want it to go to. And it needs to look really valuable to the client or the person in your network that you want to pass it on, and we’ve found a couple of formats work really well. Books probably are the best. It doesn’t have to be a long book. Short books work really, really well. One of the first clients we took through this process, he put this book together and literally it was 12 types of pages in Microsoft Word, but it was good. He was marketing to physicians and it had all of the different scenarios for how they make financial decisions, which is what he did for them.

And in 12 type pages, he had this great piece of content and he went out and used that to generate 98 referrals in a month, like real, legitimate, good referrals who were introduced to him as the author of a book. So, that’s one way of doing it. Now, what we’ve found over the last, I guess it’s been four years now since I wrote my book Unstoppable Referrals where we talked about this approach, and I talked a lot about using a book that we found that most people don’t want to use a book because they get scared of writing a book. So, presentations work really, really well. So, you can do a lunch and learn where the client invites people that they know, and you help them curate this list of who to invite.

I mean, you don’t even leave it to chance to have them figure that out, but if you can sit down with them and say, “Look, I’ve been so grateful that we’ve been able to work with you and solve this particular problem. And I know you must know other businesses that are faced with this. What do you say, I buy lunch. We bring them into your conference room. Let’s sit down together, either with your LinkedIn or your Outlook or wherever you keep your contacts, and let’s pick a few people that we can invite to this. They’re going to love you for inviting them, and we’re not going to give them many big sales pitch, but we’re going to help educate them on this topic.” And so, you can do it with a presentation in much the same way. And those are usually relatively easy to pull off and a little less scary than putting a book together. But you can package it in any number of ways, but those are probably the two most common.

Drew McLellan:

So, I know one of the things that you talk about are that there are some common challenges that get in the way of attracting prospects and also keeping and growing clients. So, walk us through what some of those obstacles are and what leapfrogs over those obstacles.

Steve Gordon:

I think, the biggest obstacles are just the way that we approach trying to get clients. Most of the time, in an agency business, we’re running constantly from one project to another, to another, trying to serve the clients we have, right?

Drew McLellan:

Yeah. It’s firefighting all day long. Where’s the biggest? I run and I put out that fire, then I run to the next fire and put out that fire, right?

Steve Gordon:

Yeah, absolutely. So, we get caught in that and we don’t spend enough time on the marketing side and really getting out there and building relationship over time. So, then we get to a point where maybe some clients graduate or we lose them, they get taken away for whatever reason, we get in a tough spot and we go, “Oh no, we need clients.” So, then we get all frantic about going and getting clients. The problem with that is that we’ve forgotten the factor of time. See, when we go and get a client in this business, we’re asking them to invest generally a fairly large amount of money, and trust us with the growth of their business. That’s not an inconsequential ask. So, we think we can just rush out and automatically manifest these clients somehow, and one of the key factors is time. And so, the big barrier is not doing this consistently all along where once you’ve generated that lead, whether it’s through referral or ad or whatever, staying in touch, being in front of them, being valuable, and sometimes that might mean for years.

Drew McLellan:

When I talk to agency owners, I say, “Your business efforts can pay off in a day or a decade or somewhere in between. And you never… It’s sort of like dollar cost averaging. You have to be out there every day doing something because you have no idea if today’s the day.

Steve Gordon:

Yeah, that’s absolutely true. And the difficult thing with that… So, one of the things I learned in growing my first business which granted it was an engineering firm, but the model is virtually the same [crosstalk 00:19:30]

Drew McLellan:

Well, honestly, I think the customers are sort of the same. You’re selling something intangible. You’re selling something that’s intellectual property. You’re selling advice and strategy for a high ticket. So, in a lot of ways, it’s absolutely parallel to an agency.

Steve Gordon:

Yeah, absolutely. And the way that we’re taught to go about and do business development, I think, it’s a method that’s hard to sustain in a service business for all the reasons that we’ve just talked about. So, you’re constantly running from fire to fire, trying to put those out. Well, the way that we’re taught to do business development is to be out in the community or out in our market, networking, doing that, one-to-one spending a lot of time doing it, and those two things don’t generally go together.

Drew McLellan:

It’s not that that methodology doesn’t work. It just doesn’t-

Steve Gordon:

Oh, no.

Drew McLellan:

Yeah.

Steve Gordon:

Yeah, it works great, but is it sustainable for you? After about 10 years of running the engineering firm, we’d grown that up into the low seven figures. We had a good team in place, and I had a team that freed me up from having to fight the fires. And so, I could spend a lot of time out networking and it absolutely worked. I’d spend 25%, 30% of my time out doing that sort of thing.

Drew McLellan:

Yeah. But tough for a small entrepreneur to carve out that time to do that, right?

Steve Gordon:

You’re right. It took me a decade to get to that point, and that was with a business that was already existing, doing okay. So, the business has been around for… At that point, it had been around for 20 years. So, yeah, really tough in the beginning. One of the things that we’ve really leaned on lately both in our firm and with our clients is networking in a little bit different way, that’s more leveraged. And it piggybacks on this idea of creating content and following up over time. So, we’ve taken podcasts which I think is a fantastic medium and I’m sure you do it as well because you’ve got a successful one and using interviews as a way to network. In fact, we started doing this long before podcasts were around. We did them back in a few times in the engineering world where we’d interview people, put it on a CD and mail it out. [crosstalk 00:21:55]

Drew McLellan:

So, one of the Agency Management Institute clients coined the phrase, Trojan Horse of Sales. And that’s exactly what he’s talking about, right? So, you have this platform, this channel, and you invite your prospects in who want the editorial coverage in the spotlight of being on your channel and they really don’t perceive it as a sales event, even though it really is, an early sales event that starts to create a relationship that you then can go back and sell them later, right?

Steve Gordon:

Yeah, absolutely. And so, we use it in two ways. We use it for prospecting and just like you’ve described, and it works incredibly effectively. In fact, we’ve got clients who have tailored their entire podcasts at… You know, their podcasts have very little to do with what they do for a living. It’s completely tailored to their prospects. And we call it being the success journalist for the industry. So, if you’re going after a particular industry, your agency say you market to tech companies, you’re now the success journalist for CEOs of tech companies or whoever is your buyer, and then you’re going to go interview them on what made them successful. Well, it’s pretty rare, especially in a business to business situation where you’re not going to be able to get a business owner, even a busy one to show up for 20 or 30 minutes and talk [crosstalk 00:23:14]

Drew McLellan:

Talk about themselves.

Steve Gordon:

… to promote the business, right?

Drew McLellan:

Yeah.

Steve Gordon:

So, it works incredibly well, and as you say, it’s a Trojan horse. The other way that we use it, which is more of a referral approach is you can go out to the influencers in your network and you can do this on a big, big scale. So, we’ve interviewed all kinds of people on our own podcast that have big audiences, and then you can certainly go that route or you can go local. And so, we’ve got a lot of businesses that are doing this on a local level where they’re just going around and interviewing all the key influencers in the business community and the podcast isn’t relevant to anybody outside of Grand Rapids, Michigan or something. But they interview those key people. They build those relationships and two things happen there.

Number one, the person they interview will share that interview. So, you get an immediate kind of passive referral, which is great. But two, you build a relationship with that person. If you don’t know them, it’s a way to get in without having to go spend all your time doing the charity events, going to the networking events and doing all that. You can really focus your time. And then as you build that relationship through the interview, it’s really easy to come back and say, “We just put your podcast out there. We’ve got some great feedback. And I tell you, I’d love to be able to give back to your network like you’ve given to mine. What do you say? You know, we put together a presentation that would really help all the people that on XYZ topic.”

And if you’ve got a good topic and you’ve got a good hook, they’re going to say yes to that. And so, now you’re creating these opportunities to get referred. So, going back to what we’ve talked about at the beginning, where you’re using referrals and thinking of it more as a top of the funnel process, now, you’re able to use these interviews and this networking, which is highly leveraged to now create large referral events. And we’ve seen those work where somebody will do a presentation and get 20 or 30 people show up. We’ve done them ourselves where we’ve had over a thousand people on a presentation that was all through that model. And so, when people talk about the fact that referrals don’t scale, it’s usually just because you’re not doing it right.

Drew McLellan:

Well, it’s interesting, and now we’ve got social media and all of that. So, it scales in a lot of ways. I’ve run my own agency for about 25 years and early on before social media was a thing, which makes me sound like a grandfather, but we held these things every month called the Branding Breakfast. So, we were an ARRA brand agency. And so, we would host breakfast, which would cost us maybe a hundred bucks. And then, through our newsletter and other things, and through clients, we would invite people once a month to come to this breakfast, and I would give a 20 minute presentation on some aspect of branding.

And the other thing that was interesting about that, so not only did it do exactly what you’re talking about, but people started coming because they were interested in the other people who were there. So, it also became this networking event that was outside of us, but we were the connectors. We got credit, if you will, for making those connections. So, it was a great sort of 360 referral model. Not only did it refer business to us, but people started doing business with each other.

Steve Gordon:

Yeah, absolutely. And that’s one of the reasons that we’ve really stuck to these sorts of strategies and looked to how can we really optimize the strategies and get them to scale in ways that are authentic? Because we’ve done some Facebook ads to grow our own agency now, we’ve done some LinkedIn ads, we’ve done some of that stuff, it’s all great. But whatever we’ve figured out that work today is guaranteed to be different by Friday. And these things that we’re talking about, you did them long before the internet probably. I did them long [crosstalk 00:27:15]

Drew McLellan:

The caveman days, right?

Steve Gordon:

Yeah. I mean, we were doing some of these things in a real basic way back in t