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Relying Only on Referrals is Risky Business: How PR Helps Mitigate That Risk

Cannabis business owners often rely on referrals and word of mouth to generate new business. After all, satisfied customers can be some of the best marketing tools for any business. However, relying solely on referrals and word of mouth can be risky, especially in an industry filled with as much white noise as the cannabis industry. In this article, we're breaking down how and why this approach has lead to regret and troubled times for businesses, and how strategic public relations can significantly help mitigate that risk and drive more business.

The Risks of Relying on Referrals and Word of Mouth

While referrals and word of mouth can be effective, relying solely on them can have several drawbacks for business owners. Here are most common issues we hear about this approach from cannabis industry professionals:

1. Limited Reach

Referrals and word of mouth can only take you so far. While they may generate some fantastic business, and make meeting new people feel effortless, they likely won't be enough to sustain your business in the long term. As your business grows, you'll need to expand your reach beyond your immediate circle of customers and clients.

2. Lack of Control

Referrals and word of mouth rely on others to do the talking for you. While this can be effective, it also means that you have little control over the messaging and how your business is perceived by those who are brand new to you and your work. Although someone has had a positive experience working with your business, it doesn't guarantee that they'll be able to articulate what else you can do for others.

3. Difficulty Scaling

Referrals and word of mouth are difficult to scale. While you may generate some new business from happy customers, it's unlikely that you'll generate enough to grow your business to the level that you want. This can make it difficult to expand and reach new markets. Let's not forget the all-too-familiar cycle that consultants and subject matter experts who solely rely on word of mouth go through. It sounds something like this:

"We're busy because we were just referred a ton of work. At the moment, revenue is great, we have a bunch of work to do, so we're not going to worry about bringing in new business."

A few months later...

"Yeah, it's just how it goes, ya know? The work is done, no new referrals came in, and we're a little slow. Our buddy Jim said he was going to make an intro to a potential client, but it's been three weeks since he said that. This week we'll probably reach out to a few folks and see if they need our help in the meantime."

No business owner wants to continuously work and live like this, and no business is sustainable long-term if approached like this.

How PR Can Help

Public relations (PR) can be an effective way for cannabis business owners to mitigate the risks of relying solely on referrals and word of mouth. Here are a few ways:

1. Expanded Reach

PR can help you reach a wider audience than referrals and word of mouth alone. By working with a specialized PR partner, you can leverage their relationships with media outlets, influencers, and other industry professionals to reach new customers and clients. You'll be able to take advantage of expanding your reach and network through appearances on podcasts, contributing guest articles surrounding your expertise, speaking at industry events, and so much more.

2. Control of Messaging

A proactive PR approach allows you to control your messaging and how your business is perceived. By working with a PR pro, you'll craft a narrative that resonates with your target audience and positions you and your business as an industry-leader people know, trust, and want to work with. The key is to put in the work so people know who you are, what you do, and why you do it.

3. Scalability

PR can be scaled to meet your business's needs. As your business grows, you can work with your PR firm to develop new strategies and tactics that help you reach new markets and generate new business. Maybe you're opening another dispensary in a new market, launching a new product, or developing a first-of-its-kind piece of manufacturing equipment, let your PR team know and work with them on creative ways to amplify and scale awareness around it.

While referrals and word of mouth can be effective marketing tools for cannabis business owners, relying solely on them is risky. By working with a business-minded PR firm, you can expand your reach, control your messaging, and scale your marketing efforts to consistently put your name out into the marketplace. This will help you avoid always being on the endless rollercoaster ride of extremely busy and dangerously slow periods of time. To get in touch with Green Lane Communication today about diversifying how you drive more business, get in touch with us today.


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