Monday, June 08, 2009

An Update on Word Of Mouth

Word of Mouth used to be limited to what one person would tell another either face to face, over the phone, or in a letter. The Internet has changed all of that:

Can We Talk?

Some time ago, we highlighted a MarketingProfs article in which Michael Antman cautioned against making word-of-mouth (WOM) strategies the primary element in your marketing mix. "He raises reasonable points about the limitations of WOM," says Deborah Eastman in her response. "[A]fter all, it can't completely replace other forms of marketing communications. However, we would be remiss to ignore the impact of WOM."

Here are some of the reasons she considers peer recommendations indispensable:

While WOM can't be controlled, it can be managed. "The root of WOM is the customer experience," says Eastman, "therefore, it is most effective when a part of a customer-centric culture focused on building customer loyalty."
The WOM from customers who are loyal—not simply satisfied—cannot be easily subverted. "Loyalty is more than satisfaction," she says. "It stems from ordinary services delivered exceptionally well or exceptional services delivered well."
Social media has given WOM limitless reach. "[B]usinesses thrive on referrals," she notes, "and online media allows referrals to spread from across the block to across the world."
WOM adds to your bottom line. According to Eastman, each "promoter" in the computer hardware industry spends more than and helps to acquire half of a new customer; a "detractor," however, can lose a business one new customer.

The Po!nt: "It's important to remember," argues Eastman, "that WOM isn't meant to replace advertising, public relations, and other marketing efforts—instead, it's one integral element of an effective marketing strategy."

Source: MarketingProfs. Click here for the complete article.