Photo Credit: Mr. Theklan (Flickr.com)
I love small business. In this era of giant conglomerates headed by executives who seem to be more focused on appeasing shareholders than customers, I find it refreshing to talk to people who not only own a business, but who are also out on the front lines interacting with their customers face-to-face.
When I have the opportunity to speak to small business owners, I especially enjoy talking to them about their marketing strategies — what works, what doesn’t, and what they’re considering trying. What’s interesting is that few of them are doing much in the way of advertising. But most that I’ve spoken to are heavily invested in a strategy known as “WOM” — word of mouth.
I’m sure some of my friends in the marketing profession get a wry smile on their face when they hear that. After all, WOM is perhaps the oldest of marketing practices. In the old days, if you had a service to offer, you didn’t buy media or look for branding opportunities. You either traveled and peddled goods and services on the basis of your personality or you stayed put and waited for your clients to refer you to others who might need the services you had to offer.
Early advertising was probably a means of getting around this cycle. It’s much easier to sell a service if you’re familiar to the buyer, and so advertising came about to help potential customers become aware of alternatives. While we tend to think of advertising as being something that is a modern phenomenon, there is historical evidence of advertising in ancient Egypt, Greece, Rome, India, Arabia, Asia, Africa and South America. Clearly, advertising plays an important role in helping to “get the word out,” so to speak.
But advertising never seems to be as effective as simple word of mouth referrals, even in our modern, mass media society. It’s stunning. Consumer studies regularly find that WOM is the best and most reliable way for new clients to find their way in the door or to consider trying a new product. Service industries often live or die by WOM. No matter how sophisticated an aware we believe we are as consumers, we’re still heavily influenced by the same information our ancestors would have sought out — referrals from friends and family.
Unfortunately, WOM is generally perceived as being difficult to control since, unlike other marketing messages, it requires the independent action of individuals and not the engineered messagecraft of a marketing department. There doesn’t seem to be a tried-and-true way to stimulate it, and every industry seems to experience it in unique ways. Many marketers would like for WOM to be their primary strategy, but have resigned themselves to the fact that they don’t know how to make it happen. Advertising, which has a more nebulous effect with no measurable correlation and which serves as a less trusted source in the minds of consumers, is easier and looks like it’s actually doing something.
With that said, I think marketers give up on WOM a little too easily. Here are three general guidelines I’d use when considering a WOM-based strategy.
Take customer delight seriously. Customer delight is a term that refers to the state of going above and beyond a customer’s level of expectation. For example, a customer might not be delighted to be offered a drink refill at a sit-down restaurant, but he or she might be delighted to be offered a drink refill by a McDonald’s manager who is walking around the lobby. Delight does not always spur word of mouth, but it contributes — I’m sure we can all think back to a time when we were surprised by a company’s high level of service and at least considered telling someone about it.
The only problem with delight is that it is hard to achieve on a consistent basis. Service companies can improve the frequency of delight by training and constantly encouraging employees to offer a standard of service that is one notch above expectation. These companies can also achieve delight by empowering employees to resolve service issues with an immediate and unexpected response — a smart strategy, since delight is easier to generate when there is a misstep than when things are running smoothly.
Still, delight can be engineered by being aware of the customer experience. This is where service gaps research can come in handy. Knowing where close competitors are failing creates opportunities for improving your business to not only succeed, but to go the extra mile. So, for example, an auto repair business might find that customers are unhappy with being stuck in a greasy, dirty waiting room that smells like tires while their car is being checked out. Providing them with a waiting room that has a pleasant atmosphere, computer terminals on which they can surf the Web, and cable TV with an accessible remote control will reverse their discomfort and may even delight them.
Encourage customers to refer their friends and family. Often, if a customer is happy with the service he or she is receiving, he or she will be eager to return the favor. I found, in my own retail management days, that asking these customers to tell their friends about us was a simple and effective tactic. I would explain to them that the best way to help me was to increase traffic in my store, which would in turn improve sales and, subsequently, my bonus, which I shared with all of my employees to thank them for their hard work. Often, delighted customers were excited by the prospect of helping me out.
It’s natural for service exchanges and products to come up in our interpersonal discussions, and so it’s only natural that a business should want to be a part of these conversations. The problem is that many businesses seem to fear being a bad part of the conversation – that is, being brought up by a customer only to get a negative review.
But here’s the thing — whether a company wants this to happen or not, it happens. People are very critical, and many interpersonal exchanges have to do with evaluating something — be it a product, a friend, a TV show, a service exchange, or even each other.
So, it’s better to acknowledge this behavior and own it rather than to ignore it or shy away from it. For what it’s worth, I’ve participated in several conversations where one person starts to badmouth a company only to have another participant in the conversation rise to the company’s defense and make a case for it. Passion often is a component of what makes WOM so successful. And even in the case of a passionately negative statement, it’s important to remember that when an association is formed, the object of the association becomes more familiar and, as a result, more likely to be a part of the consumer’s evoked set. If enough positive WOM is going around about your company, one bad review here and there won’t be enough to hurt you.
And if you really want to combat negative reviews, offer referral bonuses to customers to refer new clients. Just make sure that your bonuses are part of an overall customer retention strategy and not just a gimmick to get people in the door for a trading game strategy.
Talk to the talkers. If you have a customer who likes to talk, don’t discourage them; talk to them! Chances are good that if they’re talking to you, they’re talking to others regularly as well. They may not always be a credible source of information, but they definitely get the message out.
Talkative people often thrive on things to talk about. So, indulge them. Tell them a story about what it is that makes your service or product really interesting. Give them a heads-up on a sales promotion or new model that’s coming up. Or, if you’ve got nothing else, talk about some real-world problems your product or service has helped to solve.
It’s important to remember when you’re talking to folks who might be a source of referrals that stories are a lot more powerful than features. I’ve bought many electronics in my life, but I distinctly remember talking to salespeople who had a story about why they liked a particular product. I don’t remember talking to salespeople who told me what features a product offered. Those associations I developed are important because they help me to have a clearer and better memory of the product. Where I failed to make associations (even on products I purchased!) is where I didn’t have an opportunity to have a great experience and, subsequently, become a part of the WOM conversation.
WOM is a robust topic, and I feel like I’ve really just scratched the surface. But enough about me — how about you? Share your thoughts on WOM below!