April 18, 2016

Make the Most of Every Customer Transaction

How to capitalise on every word of mouth opportunity & transform your business


Last week I stumbled across a small coffee shop just a few blocks from home. Judging by the location (and price of coffee) my expectations were not all that high. Little did I know that less than ten minutes later I’d leave the Journeyman café an absolute raving fan.

Upon entry, I was greeted by the owner. I asked about the roaster and bags of coffee beans sitting at the back of the shop. He enthusiastically showed me the beans, explained their South American origin, and shared his plans to sell his product to local cafés.

In under five minutes, the owner told me a riveting business story, he established himself as a passionate industry expert and made me an outstanding coffee. No hidden motives, just a general passion for what he was doing with a fantastic product to back it up.


WOM marketing | Surf Pacific

Along with telling close friends and family members about the café, I jumped on Facebook to share my experience. Think about the snowball effect this creates:  a handful of patrons have a similar experience to me, share it with their friends and family, and their friends and family repeat the process. Within a matter of weeks, even days, the café has increased turnover ten-fold.

By having a great story, a great product, and a few five-minute conversations, the café can quickly build a tribe of unpaid, vocal advocates. A tribe willing to spread advertising to the eyes and minds of tens of thousands of potential customers. No expensive marketing budget, no strategic referral program.

This, my friends, is the power of WOM referral.


Word of mouth is all about trust. More specifically, it’s about building strong customer relationships and long-term loyalty. Loyal, long-term customers are the ones that account for the majority of sales for most businesses in most industry areas.

There are countless articles, studies, and statistics that preach the importance of WOM.

  • 50% of purchase decisions are influenced by word of mouth
  • Customers obtained through WOM spend on average 200% more than the regular customer
  • 92% of consumers say they trust recommendations from family and friends over all other types of marketing

The last statistic underpins the importance of WOM.

92% of consumers say they trust recommendations from family and friends over all other types of marketing.


Source: Nielsen Global Trust in Advertising Survey

You can expend all your available funds and resources trying to acquire new customers or you can take some of those resources and use them to keep your existing customers super happy. And guess what? They’ll acquire new customers for you, for free.


Word of mouth has always been important. Now perhaps more than ever. As consumers, we are extremely well-connected. Within an arm’s reach, we have access to information on just about everything.  We can share an experience or leave a review, and within minutes, hundreds, thousands, even millions of others have access to this information.

This presents both great opportunity and great risk.

On one hand, if a customer has had a great experience, loved your product or service, this news can spread like wildfire, and soon, your business is booming. On the other hand, a bad customer experience can quickly result in disaster. You see, people are far more likely to express their dissatisfaction toward a customer experience then they are a good one. Keep this in mind.



To capitalize on every customer interaction, we first need to understand why people refer. This requires slipping into your customer’s shoes. It sounds so blatantly obvious but all too often business owners operate so close to their prescribed product or service that they fail to see their business through the customer’s lens.

I think back to my experience at the Journeyman Café. Why was I so eager to share my experience and refer the business?

The first reason probably has more to do with myself than it does the business. I got a genuine kick from the thought of my friends or family visiting the café and having a great coffee on my recommendation.

The second reason was that I was genuinely barracking for the café owner and his business. His story was riveting and his passion was contagious.

The third reason is if I’m being completely honest all about me. By sharing a certain experience like this, I’m able to project a desired image of myself to friends and family. Very superficial, but a reality.

All of these motivations, I suspect, play a role in most buying decisions.

The New York Times Customer Insight Group released an interesting study on the psychology of sharing. The study claims there are five main reasons which motivate people to share information online.

  • Bring value to others in an attempt to change opinion or encourage action (49% of consumers).
  • To define ourselves to others, giving people a better sense of who we are and what we care about (68% of consumers).
  • To build and nurture existing relationships by connecting with people we would otherwise no stay in touch with (78% of consumers).
  • Self-fulfillment. Allowing us to feel more involved in the world (69% of consumers).
  • To support causes or issues we care about (84% of consumers).

The Psychology of Sharing – New York Times Customer Insight Group


Traditionally, word of mouth referral was limited to more intimate, interpersonal connections. We would tell friends, family, acquaintances, about great customer experiences and they would spread the word. The same basic principles apply. However, we now have a range of tools at our disposal, allowing us to amplify recommendations, referrals, and reviews, on a huge one-to-many scale.

What if you awoke tomorrow morning to no internet connection, no phone line, no social media accounts, no email, no Google? Would you still be in business? Would your existing customers sing your praises from the rooftops?

Websites, social media, Google, SEO, these are only tools used to project the reality of your business, amplify your story, and maximize word-of-mouth interactions.

Concentrate first and foremost on providing exceptional customer interactions, every time. Concentrate on effectively telling and selling your business story with the same tenacity you use to sell your product or service.

It should be the goal of every business owner to generate WOM referrals organically, free from any incentives or direct requests.