Another Look at Word-of-Mouth Marketing

By David Martin
February 15, 2008
COLUMN : Integrated Marketing | Sales & Marketing

With marketing dollars scarce in a slowing economy, it’s a very good time to take a fresh look at grass roots marketing referral techniques that won’t break the bank. Word-of- mouth or viral marketing has been growing and is even becoming more formalized with the formation three years ago of the Word of Mouth Marketing Association.

Grounded on the proposition that people like to be communicated with, not marketed to, word of mouth is a soft path to selling that works best when it complements more conventional marketing techniques, instead of replacing them. Indeed, it works best when integrated with both traditional offline and online marketing efforts such as advertising, email, electronic yellow pages and Web sites. Word of mouth marketing intersects with public relations in that it has less immediacy then paid ads. It can also be seen as part of your ongoing customer relationship management program.

Word of mouth isn’t necessarily “organic” or spontaneous. Word of mouth marketing should be as organized, thoughtful and as systematic as other forms of marketing. Unfortunately, few marketing plans include a section on word of mouth. Some people still believe that positive word of mouth is achieved by simply providing good service to customers, when actually it is more involved than that.

Maximizing word of mouth requires having a specific, structured plan for meeting people and cultivating long-term relationships that will result in referrals. Much of the contact work is still done face to face, and on the phone. At the same time, the internet is making it easier to stimulate word of mouth marketing, sometimes called viral marketing, when practiced online.

MORE POWERFUL
Word of mouth is powerful. When a customer comes to you through a second-party endorsement, you have several distinct selling advantages. Less selling time is required. That’s because much of he selling has already been accomplished by your referral source. Trust and believability are key factors in making the first sale. And winning trust and believability takes time. These important factors become almost non-issues when people get a referral from someone they know and respect.

These prospects also have greater “loyalty potential.” Leads generated by conventional advertising often buy only once. Leads generated by referrals are more likely to become loyal (repeat) customers.

The third advantage is that these people come “ready to buy.” Prospects buy more readily from someone a friend says to trust. They also buy more when they buy with the confidence that comes only from a referral.

A good way to build word of mouth is by networking in your community. Window and door dealers can cultivate residential and commercial business by joining three to five groups, such as the Chamber of Commerce and other some community service organizations.  To maximize efforts, select a well-rounded mix. Avoid being in more than one group per category, so you don’t divide your loyalties and make too many promises. Finally, if you have partners, suggest that each join a different group to maximize your business’ exposure.

Membership in these groups, however, isn’t enough.  You do have to commit and participate to develop lasting relationships with business and community leaders. It isn’t about who you know, but how well you know them.  Attend every meeting and take a leadership role by heading a special committee or running an event.

VIRAL MARKETING

Similar to word of mouth, online viral marketing is a growing phenomenon where one person passes along marketing messages voluntarily to another via email. Your computerized customer database is the key to encouraging this kind of communication. By sending out regular testimonials, birthday greetings, referral incentive offers, and timely information on home improvement issues, as well as product offers, this information can spread to even more customers (of course it’s important to restrict your outgoing email campaigns to existing customers, and to prospects who have given you permission to contact them).

 

You can also build more online buzz about your company by adding a section with customer testimonials on your company Web site.  Consider paid online yellow pages listings that let you include customer testimonial ratings of your company.  Viral promotions often incorporate video clips, so you might want to look at what’s available from your suppliers, or shoot customer testimonials with a camcorder.

 

One final thought: never take word of mouth for granted. Referrals don’t just happen. You have to ask for them. Even your best and most satisfied customers are unlikely to speak to their friends about you. And, when you think about it, that should be no surprise. You know, however, that customers who have problems will usually tell everyone.

 

Today’s fast-growing word of mouth marketing movement–both offline and online–recognizes that a happy customer is the greatest endorsement of your company and its products. Soliciting the voice of your customers is a natural, genuine, honest process of helping people access advice from each other about products and services they have directly experienced.

 

 


David H. Martin is president of Lenzi Martin  Marketing of Oak Park, IL, an integrated marketing services firm, blending old media with new. He was previously director of marketing for two window manufacturers and can be reached at 708/848-8404 or www.lenzimartin.com.

 

  • Word-of-Mouth Marketing Techniques and Tools

    - Develop a “satisfied customer” database. The important thing is discipline. Make a point of adding one “satisfied customer” story to your file every month or every week.

    - Ask each customer, in advance, for permission to use his or her name as a reference. Then, when you’re trying to win over a tough prospect, scan your file, identify a success story that matches a situation, and invite the prospect to contact the customer directly. 

    - Ask for a testimonial letter. Prospective customers like to see testimonials from people they can identify with. Ask satisfied customers to write you a letter expressing the reasons why they are glad they did business with you. You can even write the letter for them. Simply let them review it and make changes before signing. 

    - Keep in touch with customers. A friendly follow-up phone call, a “thank you note” in the mail or one delivered by email can have a cumulative positive impact if you don’t overdo it.

    - Say “thank you” repeatedly.  Thank customers verbally immediately upon receiving a referral. Then thank them in writing. Whether or not you convert the referral into a customer, the source of the referral deserves recognition. 

    - Offer rewards for referrals. Some dealers offer cash rewards for referrals that turn into sales. Gift cards or small gifts for the home can also work.

    - Make five contacts each day. Like other forms of marketing, word of mouth is a numbers game. If you make five contacts each day and you are in business 250 days a year–that’s 1,250 contacts per year.