Why Word-of-Mouth Should Be Core to Your Business


What’s so important about Word-of-Mouth? You hear and read a lot about word-of-mouth marketing. Every day there’s another resource or opinion about it.

I can only answer this from my experience as CEO of a small company. But word-of-mouth is so important to a company’s success, especially a small company, that it should be the core of your business.

Why? It creates a sustainable business model. Every business seeks to be self-sustaining. And a strategy built around generating word-of-mouth is a sustainable strategy.

How?

It levels the playing field for small business.

Increasingly, small business competes against brands whose marketing budgets exceed that of the small business’ total revenue.

The only cost-effective means to compete against that is through the authentic messages generated by customers and employees inspired by the connections they experience with a company whose made word-of-mouth central to their business.

When you commit to a word-of-mouth strategy, you commit to generating a visceral, emotional, physiological, borderline irrational buy-in from your customers and your employees for your brand.

Business-speak, please.

Buy-in, some call it engagement, from your employees means more passion and focus from them. That means greater productivity and efficiency and more solutions, more innovations, more ideas from s small company’s brand managers (all of your employees). Buy-in from your customers means more buy-ing. They trust your brand. They’ll buy more of your brand.

The results are quantifiable and immediate. And they start with the most important metric for a small business: cash-flow.

Cash is king. Cash is your reward. Positive cash-flows empower you, your colleagues and your customers to own your brand and drive it so it reflects your passion.

And here’s how cash-flows grow with word-of-mouth as your core strategy:

1. Reduced Advertising Expenses. You’ll save a lot of money when you make your customers and employees your advertising agency. Your investment here is an investment in the long-term sustainability of your company. It’s an investment in building loyalty and commitment, connection and community, with your customers and your employees.

Traditional advertising too often requires you to invest in your agency’s success…regardless of the results they deliver for your success.

2. Shorter Sales Cycle. You’ll see your sales cycle shorten as you see an increase in referrals from your customers. Shorter sales cycle means there’s a shorter length of time between your prospect’s first contact with you and their first payment to you.

Imagine if you could add one week of revenue from each new customer for the past 12 months? You’d do that if you shortened your sales lead time by 7 days. Now, just imagine if you could shorten that by…one month!

3. Increase in Repeat Purchases. That comes from the increase in your customers’ buy-ing as you inspire their buy-in. Happy customers look forward to working with you again. There’s no hesitation in their mind. It’s a delight to buy from you again.

Ok. Sounds good so far, doesn’t it.

Still there are those who may want details. How’s this work, you ask.

Profound Connection with Your Company. What is word-of-mouth but the sign of a strong connection with a brand, with the experience of that brand, with the people who create that brand? That experience inspires communication. You can’t help it.

Word-of-mouth is the result of creating a profound and meaningful connection both with, and among, your customers and your employees.

And it’s a potential infinite motion machine, a never-ending positive feedback loop, where each party inspires the other.

Employees and colleagues are empower to help insure each other’s success…in what? Their job. And their jobs are…making the customer happy.

Your customers then celebrate that experience.

How? As birds fly and bees buzz, they do what comes natural: they tell their friends and neighbors, partners and colleagues and even their own customers.

These testimonials generate referrals. Those referrals then serve as a reward in themselves for your employees.

And one more thing…your customers will voluntarily be the carrot and stick for your employees. Their positive feedback and the referrals they send will be the carrot. The stick (bad term, agreed) will be their expectations now of nothing less than a wow experience.

Now your customers are a loyal and volunteer sales force for your company, as well as cheerleaders and management, coaches and innovators, quality-assurance leaders…and all for the low, simple price of making them happy.

You can’t hire these many people and still remain profitable.

Likwise, your employees’ empowerment and its accompanying peer pressure serves as its own system of carrots and sticks. One of the strongest incentives is peer recognition, together with the means to accomplish one’s job.

It’s a vicious, vicious cycle. You inspire your employees. Your employees inspire each other. They inspire your customers, who inspire their friends, who become your customers…you get inspired…and it starts all over again.

That’s when the playing field starts to level.

Only a small company can have this kind of communication and connection with their employees and customers. There’s no amount of paid advertising that can generate this kind of word-of-mouth, this system of inspiration sources for a brand’s success.

That’s where the momentum starts to grow. That’s where you get the self-sustaining business model. That’s where you own the brand and you generate the cash to continue to own the brand and deliver it so it reflects your vision, together.

And that’s why word-of-mouth should be core to your business.

There’s a free online community where you can learn more about word-of-mouth. It’s called The SWOM, The Society of Word-of-Mouth. You can find it at http://theswom.ning.com.

* * * * *

Zane Safrit, small business expert on operations, word of mouth and customer referrals.About the Author: Zane Safrit’s passion is small business and the operations’ excellence required to deliver a product that creates word-of-mouth, customer referrals and instills pride in those whose passion created it. He previously served as CEO of Conference Calls Unlimited. Zane’s blog can be found at Zane Safrit.

27 Comments ▼

Zane Safrit


Zane Safrit Zane Safrit's My passion is small business and the operations' excellence required to deliver a product that creates word-of-mouth, customer referrals and instills pride in those whose passion created it. Zane's blog is Zane Safrit.

27 Reactions

  1. Zane,

    I agree – From my experience, I just put a lot of money for advertising campaign that yield the same result as creating buzz for free.

    Why pay if you can get it for free?

    Thanks for the good post.

    Cheers!

  2. Great topic! The interesting thing is that you can actually track some of your word-of-mouth via the Internet — by looking at how people rate your product/service at industry/conglomerate websites and what they say in your reviews. This is the word-of-mouth of the future that can be critical to your success.

  3. WoM is the principal method we are planning for our goat farm. The tag line is to be convenience, ease and dependability.

    The farm is due to be launched this July.

    I enjoyed your article ratifiying our thinking. Thanks

  4. It’s honest and there’s accountability of sorts based on transparency and authentic communication. No need to point out that traditional marketing not only cost money but often is just about shoving a product whatever the situation. in short, it really doesn’t make the customer feel valued.

    I totally agree with WOM!

    Best.
    alain

  5. Martin Lindeskog

    Have you heard about Word of Mouth Marketing Association Inc.? http://www.womma.org

  6. Great read – also practice this along with generous marketing/karma marketing and it beats the pants off any PPC or offline print campaign…

    Cheers to you, great writing keep it up.
    Norb – NC Media

  7. I wrote a cartoon once that has the employee asking ” but boss, you can force a horse to the river, but you cannot force it to drink water!”

    And the boss said, ” but what did you do to make him thirsty?”

    so, My take on this :

    a.) how do you make people spread their good experience with you?

    Not just make them happy, not just meet their expectations, but make them VERY happy, and exceed their expectations.

    people nowadays don’t talk about good service or products anymore, only VERY good and exceptional products and service.

  8. A great topic to discuss. Word of mouth creates some of your most loyal customers. These loyal customers are more likely to pass your info on to others. You can get much better results this way. Not to mention the benefits of free effortless advertising.

  9. What are some specific strategies that you suggest for getting the “vicious” cycle of inspiration going? I love the WOM strategy, and want to get more on the tactics.

  10. “People nowadays don’t talk about good service or products anymore, only VERY good and exceptional products and service.” This is so true. You have to really stand out to actually give the person “a story” to tell others. Something that makes them say, “Hey, listen to this. This company actually. . .” Just make sure that whatever they complete that sentence with – is something positive. Because it can work both ways.

  11. I think whats starts WOM is superb customer service with friendly employees. If you meet a customers needs beyond what they are used to, they will be sure to remember the experience and pass it along to others.

  12. Zane,
    Great article! And thanks for the SWOM shout-out : )

  13. Good article.You can get better results from your advertising without paying, for instance using web2.0 tactics will often get you a top ranking at the search engines relatively fast.

  14. Word of mouth referrals are a big part of our revenues – not only do we have buyers being referred to us to seek out website businesses for sale on our site we represent, but also our customers who have completed a transaction and sold their businesses successfully are our biggest referrers of new clients. These referred customers are already sold before they talk with us because of strong word of mouth business reference.
    david Fairley
    websiteproperties.com

  15. Word-of-mouth is one of the greatest assets a small business has over larger competitors. Yet with all the accolades for it’s use, the majority of us have no idea how to leverage this great tool to our advantage. I am sure that we all provide a great service to every client who steps through the door (or clicks “check out”). Due to the complexities of each market and product, I wll not be able to offer any guidence for developing a strategy for generating word-of-mouth within your organization. But my last sentence should provide the start for an effort to reign in this elusive beast, word-of-mouth is a Strategy and should be developed and monitored as any other investment would be.

  16. Noob, Stephanie, Father, Friar…thanks for the kind words.

    Martin Lindeskog: I was on the Board of Directors for WOMMA and spoke on panels at their first two conferences.

    Michael Michalowicz: As Jimmy Lowe commented, generating WOM is simple: wow the customer. But how that’s done depends on the product, the market, the vision…I’d be happy to talk more with you. I’m just writing a WOM plan for a restaurant in the area. Some of those solutions might apply for one company in your portfolio.

    Jackie: Of course. Always.

  17. Martin Lindeskog

    Zane Safrit: Are you a member of WOMMA now? I wrote some comments on your blog. Talk to you soon again.

  18. Word of Mouth marketing is always the best way to market any other businesses, people tends to be more mature in choosing products and learn from other experiences on how does a product would seem to be doing, because as the line goes “experience is the best teacher”, it would be very expensive in your part to learn it from yourself and it will mean a lot from you, such as money, time and effort. But learning from other’s experiences would be cost-effective, business image should really be taken care of because customers are learning from each other, they are educating one another, usually if a business has been providing customers with a good quality of products and services, customers will try to refer them to other customers thus making a “networked” customers out of them. This will be your “free” advertisers, as you have not paid them but they keep on telling people within their extent about their impression on your business. So make sure to produce good quality products and services and customers will keep on producing customers through word of mouth in addition to your dynamic marketers.

  19. Martin, No. I’m not a member at this point.

  20. Martin Lindeskog

    Zane, Thanks for your reply.

  21. TJ McCue

    Hey Zane,

    I thought that Lisa’s recent post about testimonials was relevant to your word-of-mouth ideas.

    http://smallbiztrends.com/2009/06/how-to-solicit-testimonials.html

  22. Great article, word of mouth advertising gives consumers a buying confidence like no other advertising. Do you have any suggestions for businesses just starting up and looking to build healthy happy relationships with clients?

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