Performance Marketing Report - JUL 2012

Hearing More Through the Grapevine

By: Jerry Rackley

Word of Mouth is perhaps the marketer’s favorite promotional channel.  We could even say that achieving a meaningful level of Word of Mouth communications is the holy grail of marketing.  So how do we as marketers get more of it?

Let’s start with some definitions.  Word of Mouth is direct, customer-to-customer communication that is not influenced by an economic reward.  A component of this communication is trust: we value recommendations far more when they come from a trusted source.

Now let’s bust a myth, that Word of Mouth is a free.  While you may generate a favorable buzz because you have such great products or excellent service, your investment in the people, training and infrastructure that allows you to perform at a buzz-worthy level isn’t free.  This is noteworthy, because there are firms who deliberately choose not to engage in marketing; they don’t have any money allocated for marketing in their budgets.  Instead they strive for excellence and hope to generate the goodwill and Word of Mouth that comes with it.  It’s a legitimate marketing strategy, but there is still a cost to it.

For most of us, when we think about Word of Mouth, we think about praises coming from the lips of delighted customers, and hopefully landing in the ears of prospective customers.  It’s great when this happens, it just doesn’t happen as often as most marketers would like, because it usually takes exceptional performance to cause someone to brag on you.  Most of your customers won’t say a word when you’re good or even great.  Why?  Because they expect it.  When you meet their expectations, their lips remain sealed.

You can bet that unhappy customers are highly motivated to say something to anyone who will listen when you’ve failed to deliver.  This isn’t the kind of Word of Mouth any of us want, and in the era of social media the impact is far reaching.  There is, however, a silver lining to the cloud of a dissatisfied customer: service recovery.

When you’ve blown it with a customer, or at least when they think you have, an excellent service recovery process can not only restore the luster to the relationship, but also create a buzz.  Customer complaint situations actually provide the best opportunity to create positive Word of Mouth. The customer is already unhappy, so resolving the complaint well can turn that customer into a brand loyalist who is delighted beyond expectations and then tells everyone about it.  These are the situations where you get the best Word of Mouth, because the customer was disappointed, but eventually got satisfaction.

While service recovery is conceptually simply, it’s often complex in operation.  What usually gets in the way of doing it well is the company culture.  A company where upper management has not empowered the frontline staff will never turn complaint situations into positive Word of Mouth.  Service recovery success requires an empowered staff that understands the lengths to which they can go to delight customers. This behavior isn’t automatic, but is the result of training and a culture of trust.

The companies that are willing to empower employees to incur expenses to make a customer happy understand the promotional value of a happy customer. They’ve calculated the Life Time Value (LTV) of their customers and know that a small economic concession today won’t make a noticeable dent in the long-term profit of that customer relationship.  They also know that it’s far less expensive to retain customers than to get new ones.

If you’re after more Word of Mouth, understand that it starts with trust on which you build a service quality culture.  Take a look at the opportunity your complaint handling process provides to generate some positive buzz, not simply placate unhappy customers. Sometimes this is as simple as making it really easy for your customers to complain.  Finally, understand that can’t just wave the magic empowerment wand over your team and expect them to feel and act empowered.  You’ll have to train them and show them what empowered employees can do in pursuit of happy customers.  Do these things and you’ll have your customers buzzing.

Not sure how empowered your employees are?  Use the Employee Satisfaction Survey, or a variation of it, to find out.