What is Word-of-Mouth Marketing?
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At first glance, word-of-mouth marketing appears to be a simple concept. It is businesses giving people a reason to talk about products and services with friends, family and others. But the simplicity of the action understates the complexity of the methodology. As with other business activities, word-of-mouth marketing is systematic, sustainable and measurable.
CFM partners have talked with various clients about our new conversational marketing services, called word-of-mouth marketing. In discussions with businesses organizations, it has become apparent that many have lost confidence in traditional promotional techniques, such as advertising and PR. Consumers are overloaded with communication. The number of media sources, TV channels, radio stations and the Internet has exploded over the past 40 years. Technology, such as TIVO, allows consumers to tune out ads. Most important of all, research shows consumer trust in traditional media sources is declining across the board.
Clients tell us they are looking for new ways to build, solidify and maintain relationships with customers or voters. Word of mouth helps organizations do that because it relies on communication from trustworthy sources: friends, families and neighbors.
The goal of word-of-mouth marketing is to harness a naturally occurring activity - consumers talking with other consumers. Every day we give or receive recommendations for movies, day care, cleaning products, barbers, cars, lawyers and soft drinks. Business people use conversations with friends and associates to get and give recommendations for accountants, distributors, delivery services and consultants.
Sometimes consumers talk about products because they are asked. Other times consumers are simply so passionate about a product, they want to tell others about it. As marketers, we are realizing word-of-mouth communication is more effective than traditional advertising and public relations because people listening to people they trust is a more credible means of obtaining reliable information.
There are three key elements of word-of-mouth marketing:
First, develop and maintain customer satisfaction with products through exceptional quality and service. When products and services meet or exceed consumer expectations, they are prime candidates for word-of-mouth marketing. Underachieving products also are candidates for word-of-mouth, but the information will be negative. Research has found customers are two times more likely to tell others about their bad experiences than they are about positive ones. Bottom line, word-of-mouth will only work for existing products or services that have a good reputation, or new services that exceed customer expectations.
Second, create opportunities and reasons for people to talk about products. Encourage your customers to contact you. Service centers, websites and correspondence are great places to find out what your customers are saying. Take time to listen and respond. People love to give opinions, and when you listen, they become a part of your team. Furthermore, join in conversations where customers talk about your products with others. Places such as classrooms, book clubs, business groups, schools and gyms are places where people talk and listen. Use interactive techniques such as speeches, seminars, websites and discussion groups to join in the conversation where there are customers.
Third, keep the communication honest and open. Encourage customers to talk about their experiences in their own words. Many consider this the most feared part of word-of-mouth because marketers think they are losing control of the message. But consumers are smart. After all, they are buying your products and services. You want individuals describing to others their positive experience in their own words. It makes the conversation genuine and trustworthy.
A word of caution is warranted. Don't try to fool your customers. Remember this mantra: "Customers are smart." They will see through what is false, fake or make believe information AND will tell others about how they were snookered. Marketing by word-of-mouth must be genuine, and it relies on customer trust in the brand, product or service.
During the next few weeks, CFM Insight will explore the opportunities available through word-of-mouth marketing and how systemically to incorporate word-of-mouth communication into marketing and promotional strategies, then to measure its impact and effectiveness.
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