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7 Strategies to develop
word-of-mouth advertising
Written by Shirley Lichti for The Record,
February 21, 2001
Word-of-mouth advertising has been called
the world's best kept marketing secret.
No matter how much money the movie industry
spends on advertising, we still consult our friends about which
movies to see. And our friends and relatives are the number one
source of information about places to visit.
Some categories are more dependent than others
on word-of-mouth referrals. Topping the list, for example, are decisions
about choosing a doctor, a mechanic or lawyer. We tend to rely less
on word-of-mouth, however, in choosing where to buy a car, obtain
a personal loan or get a haircut.
Word-of-mouth exists because it is impossible
for consumers to know everything about everything.
When a product is complex and difficult to
evaluate and when there is risk involved in the decision - as is
the case with the purchase of many services - consumers often look
to others for advice.
We tend to look to people we know, or those
with whom we have strong ties. And if their advice is good, we regard
these people as expert sources in the future.
Word-of-mouth has many benefits for companies.
Leads attracted to your business via word-of-mouth cost less and
such sales are easier to close. As well, referrals tend to generate
better quality customers in terms of profitability and loyalty compared
with those attracted via price promotions in advertising campaigns.
Marketing consultants Mercier Gray found
that 60 per cent of consumers purchased products solely through
personal recommendation and that only 29 per cent had ever bought
a product as a result of seeing it in a TV ad.
A study conducted by General Electric found
that the recommendations made by people customers know carry twice
the weight as advertising.
Yet most of today's marketing still focuses
on the use of advertising to influence customers.
Although word-of-mouth is an extremely effective
tool, few people know how to develop it. The best word-of-mouth
advertising programs happen by design, not by chance. Word-of-mouth
can be managed.
Here are some tips to help you do just this.
- Memorable service
Word-of-mouth does not happen overnight.
It ultimately depends on the quality of your customer service.
This is rarely based on one thing you
do. Rather it is the result of hundreds of little things you
consistently do a little bit better than your competition. Things
like exceeding customer expectations and delivering on your
promises.
People often remember your customer service
more distinctly than your product, so focus on making the experience
memorable. Absolutely nothing will help you to generate referred
business if your company cannot deliver a superior experience.
- Be positive
Train your employees never to say anything
negative about your company to customers or to friends. Reward
those who speak positively. It's also good policy not to badmouth
the competition.
If your organization uses volunteers,
ensure they also understand their roles as ambassadors. Train
them the same way you would employees.
- Talk to customers
Ensure your customers know how important
referrals are to your business and let them know how much you
appreciate them.
Plant word-of-mouth seeds. When clients
express their satisfaction with your goods and services, acknowledge
their kind words with a sincere thank you. Then, take it a step
further and let them know how much of your business is as a
result of referrals from satisfied customers like them.
- Incentive programs
Some organizations use incentive programs
to generate referrals. Tactics such as paying cash for referrals
may work. However, too often they smack of a bribe in exchange
for a list of names of your friends.
Instead, offer free samples that let
you introduce clients to products or services they might not
have otherwise tried. You could also give discounts against
future purchases, memberships or other gifts. For example, one
winery bottles special reserve wine, not available for purchase,
to thank customers for referrals.
- Maintain a presence
One of the best things you can do is
to simply stay top of mind with your customers. Ensure your
company maintains a presence by sending a quarterly newsletter,
or by inviting them to special events if appropriate.
- Network
Another key to building a word-of-mouth
referrals is networking. The only people who are going to give
referrals to you consistently are people who know and trust
you.
You need to spend time with the right
people in structured professional environments, building friendships
and lasting professional relationships.
- Help others
Referrals are like boomerangs. What goes
around comes around. So be sure to remember those who have sent
you referrals when you are asked for the name of someone who
can help.
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