Why Word of Mouth is Risky for NZ Tradies | Advantage Digital
Why "Word of Mouth" is the Riskiest Marketing Strategy for NZ Tradies
Author: Daniel Thomas, Advantage Digital NZ
“The biggest flaw with referrals is that you cannot control the tap. Word-of-mouth is the riskiest marketing strategy you can have.”
If your building or trade business relies entirely on word-of-mouth and referrals, congratulations. It means you do great work, you don’t cut corners, and your clients trust you enough to put their own reputation on the line to recommend you.
But from a purely business standpoint? Word-of-mouth is the riskiest marketing strategy you can have.
Here is why relying on it is a trap, and what the top-tier NZ tradies are doing instead.
The "Feast or Famine" Trap
The biggest flaw with referrals is that you cannot control the tap. When you are fully booked and up to your eyeballs in work, the phone rings off the hook. But when a job gets delayed, or you look at the schedule for next month and see a massive gap, you can’t suddenly force your past clients to refer you new business that same week.
You end up in the "feast or famine" cycle. To keep the tools moving and the crew paid, you start taking on lower-margin, headache jobs that you would usually turn down.
Furthermore, referrals often come with a built-in expectation of "mate's rates." If you want to scale, hire another crew, or transition exclusively into high-margin architectural builds, you cannot passively wait for the phone to ring.
Stop Renting Leads. Build an "Owned" Asset.
When tradies finally get sick of the feast-or-famine cycle, they often make a second mistake: they go to shared lead platforms (where 5 different guys fight to the bottom on price for the same job), or they pay a generic agency for fluffy "brand awareness."
You don't need brand awareness. You need an Owned Lead Engine.
A Lead Engine is a dedicated system built across Google and Meta that targets local homeowners who are actively searching for your specific service right now.
The leads aren't shared with your competitors.
You own the customer relationship from day one.
Crucially: You can turn the tap up when you need to fill the pipeline, and turn it off when you are at capacity.
The Fluff-Free Math
Most agencies will try to sell you on "website clicks" or "impressions." You can't pay your crew with website impressions.
When I build a proposal for a client, we only look at the actual pipeline. Here is what a conservative, realistic Lead Engine looks like for a typical NZ building partner:
The Investment: $1,200 / month (Ad spend directly to Google/Meta)
The Traffic: ~150 highly targeted local clicks from people actively searching for builders.
The Leads: 15 qualified inquiries directly to your inbox.
The Result: Even if your sales close rate is a highly conservative 20%, that is 3 new high-margin jobs added to your pipeline every single month.
If your average job profit is $20,000, that $1,200 ad spend just generated $60,000 in gross profit. That is how you build a predictable, bulletproof business.
Ready to take control of your pipeline?
I don't sell generic marketing, and I only partner with one specific trade business per local area to avoid conflicts of interest.
If you are a Director looking to stop relying on referrals and start picking and choosing your own high-margin jobs, let’s have a quick chat.
