Marketing department under new management. The only problem? Most people don’t recognize the new boss.
While most companies are busy increasing their paid social media budgets or expanding their video staff, a few are focusing on the simple power of something less expensive, more personal and often more effective: word of mouth.
Some of the most successful companies have realized that the most effective way to promote their brands does not come with a hefty price tag; Instead they rely on creating conversations with customers. The great thing about word of mouth is that it influences 59 – 91% of all purchases, but NOBODY has a strategy for it.
You have a marketing strategy. A digital strategy. A social media strategy. A PR strategy. But you don’t have a word-of-mouth strategy. We just take it for granted that our customers will talk about us. But will they? And what will they see?
Table of Contents
We need to start word-of-mouth on purpose, not at random.
Let’s look at the numbers. Follow Ted Wright CEO of Fizz , word of mouth can go from one excited customer to 40, 370 people in just one year. It’s a huge wave that turns your customers into volunteer marketers, using their reach and relationships to acquire new customers for almost no cost.
Imagine the potential if you could do the same thing for hundreds or thousands of customers daily. You can.
Every business should work towards creating what my co-authors, Daniel Lemin, and I call “chat-enabled”. Conversation triggers are strategic, operational, imperative differentiators that require word of mouth. Your customers can’t help but tell someone about the special, different thing you do.
A conversation trigger can be a direct line of text to your CEO, fun posters in your restroom, or treats you left on hotel pillows. It can be anything, as long as it’s consistently implemented, matches your brand positioning, and reliably generates conversations.
At The Cheesecake Factory, for example, the restaurant’s extensive menu. It’s a staggering 5,940 words long. We surveyed hundreds of customers and found that 38% of them mentioned the giant menu to someone else, in the past 30 days. It’s a very powerful talker for the restaurant and why you should almost NEVER see an advertisement for the brand.
Interested in guessing how much revenue this multi-billion dollar company spends on advertising? A little 0.2 percent. The Cheesecake Factory relies on word of mouth because research by David Godes and Dina Mayzlin has found that one conversation per new customer generates about $200 in revenue for a restaurant chain.
Here are three reasons word of mouth is so powerful:
1. Word of mouth is deeply personal
It’s nearly impossible — even with machine learning — to create an ad that’s individually targeted to each of your 40,000 potential customers. However, that’s exactly what your customers can do through word of mouth. They know more about their friends than you do; Let them tell your story in a way that can connect with those friends in ways you can’t.
Not even social media achieves such a personal level of emotion — it accounts for only half of all word of mouth conversations. However, direct spending on social media advertising in the US is expected to grow from $4.3 billion to $23.6 billion in 2019. While other businesses are busy constantly increasing their paid social budgets, think about how you could give your customers something to talk about instead.
2. Word of mouth Saves time
We’re all there on a Saturday night: you and your friends want to go out to dinner, but no one wants to take the time to comb through Yelp and research every available option. Instead, your friends shout out their favorite places or mention a few new languages they’ve heard from co-workers. In no time, your team picked a destination (and you learned about a few new places in the process).
Nearly everyone chooses this type of organic recommendation.
3. Word of mouth Capitalization based on trust
Consumers are willing to take a friend’s word for it. While research from Nielsen and Edelman shows that only half of consumers trust businesses globally, 83 percent of Americans trust recommendations from friends and family. Actually it’s very simple.
Friends are generally not financially interested in promoting a product or service, so the credibility and persuasiveness of a referral or referral increases accordingly.
We live in a time when the algorithms of advertising strategies have become extremely complex. It’s all too easy to get tied to those algorithms and forget about the fundamentals of business growth. You just need to understand the word out. If your client wishes to do it for you, you should do everything you can to help them. So what is your talk trigger?
More on this topic in my new book, written with Daniel Lemin. Access TalkTriggers.com for free downloads and tools.
Additionally, we have a comprehensive new study on the power of word of mouth called Chatter Matters: the 2018 Word of mouth report. Free download here.