By Sandy Hershelman
Word-of-mouth is the center of the marketing universe. Research
has found word-of-mouth marketing to be a major influence on consumer
behavior, even more important than advertising or the personal sales
pitch. In fact, advice from other consumers has a greater influence
than the effects of all intentional marketing combined.
When Promotion Marketing Association asked consumers about the top
influencers of their purchase decisions: 48.5 percent said word-of-mouth;
27 percent said advertising. A PlanetFeedback poll showed 61 percent
of consumers trusted word-of-mouth, 47 trusted percent print ads,
42 percent TV ads, and only 21 percent trusted direct mail.
Word-of-mouth is cheap, highly infectious and very effective. It's
much easier to sell a prospect who's been referred to you.
After all, he's halfway sold before he even walks in your door.
Referrals tend to generate better quality customers in terms of profitability
and loyalty, than those attracted by a low-price promotion. Studies
have shown that 90 percent of advertising isn't credible, but 90
percent of word-of-mouth can be trusted.
The success of word-of-mouth marketing depends on quality customer
service and quality product, consistently. Rarely is there one little
thing you've done that creates excitement. It's usually
the result of repeatedly outperforming the competition. That might
not necessarily mean cheaper and faster, but it does mean delivering
what you promise and exceeding your customers' expectations.
When your customers have a good experience, they'll tell three
friends. When it's a bad experience, they'll tell 11
That's why it's important to welcome customer complaints—and
make that point obvious. The vast majority of dissatisfied customers
won't voice complaints to those with authority; they'll
just take their business elsewhere and let all of their friends know
Word-of-mouth can "just happen," but it's smart
business to give it a boost.
Make sure your customers realize how important referrals are to your
business—and how much you appreciate them. Do this tactfully.
When a client tells you what a great job you did, thank him sincerely,
and then tell him how much of your business comes from referrals.
Your existing customers are gold. (Well, most of them are.) It will
cost you six times more in marketing dollars to attract a new customer
than to do more business with your existing client. Don't let
your customers forget about you. A Christmas card, or a reminder
for an oil change/teeth cleaning/kitty shots, is a great way to keep
in touch. A phone call, just to see how they're doing, is even
Collect testimonials from your customers. Use them in your brochure
and mailings, and on your Web site. One of the most effective print
advertising campaigns I ever suggested was to use customer testimonials
in ads. The long-running campaign has generated lots of positive
buzz. People love to see their friends' faces in ads—and
they trust the message.
Make sure your cheerleaders are knowledgeable about your business.
If mom, sis, and the neighbor are clueless about what you do, they
really aren't helping the cause. Give them a script, if necessary.
Without employee support, your word-of-mouth campaign will fail.
Train your employees not to badmouth your company, or the competition.
Instead encourage them to spread (true!) stories of outstanding customer
service. Educate them and reward them.
An aside: Make sure your employees are properly trained before allowing
them on the front line. They are your business' first impression.
If they look incompetent, the customers may go elsewhere—and
tell their friends they left because you employ idiots.
Depending on which marketing book you read, offering cash for referrals
is praised or slapped down. The fear is that it feels to many like
they're selling their friends' names. Instead of money,
offer a special thank you gift, free consultation, or a discount
on future services or purchases.
Networking is key to successful word-of-mouth marketing. A person
is going to refer someone they know and trust. After all, a referral
is a reflection on the referrer, as well. If the person he or she
sent your way has an awful experience, the referrer also looks bad.
Promote your name and business by becoming known as a source of knowledge.
Offer yourself as a speaker at a seminar, or at the local chamber
of commerce meeting. Write articles or informative ads for local
publications. Present relevant information your audience can really
use, not a thinly veiled commercial.
Free samples can work wonders to attract attention. Better yet, have
an event. Brainstorm with your staff about something fun that will
attract potential customers. A drawing for prizes, free classes for
the public, a fundraiser for a worthy cause—each has its marketing
Remember though, word-of-mouth is just one piece of the advertising
puzzle. Few of us can afford to rely on it entirely. And, it often
takes a really long time to reach its peak. Word-of-mouth campaigns
can have the shelf life of a Twinkie. The positive comments will
still be spreading, decades after the first happy customer said, "What
a great company!"
Every business generates word-of-mouth, be it good or bad. It's
your job to make sure it's good!