Word-of-Mouth: The Worst Form of Advertising

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Around 1999, I began to feel like the Internet was broken. As the web grew exponentially, search results were becoming less and less relevant. I jumped from search engine to search engine, longing for one that would find what I was actually searching for. But, alas … Alta Vista, HotBot, Excite … they all let me down. Then, one magical day, an Internet consultant I’d been working with told me about a brand new search engine … and directed me to google.com. I’ve never looked back. No prints ads, no television spots, and 13 years later, more than four billion searches a day. The company name has even become a verb: “Just google it.” Ah, the power of word-of-mouth. Stories like that are why we believe word-of-mouth is “the best form of advertising.” But here’s the problem:

There is a special type of word of mouth that is achieved by only a handful of products and a tiny fraction of the world’s companies. And, in all likelihood, you don’t have it. – Dave Balter, The Word of Mouth Manual, Volume II
Harsh words, but true. Here are a few myths surrounding word-of-mouth that need dispelling.

“Word-of-Mouth is all You Need”

When my partners and I started our company, I experienced first-hand how well word-of-mouth can work. In six months, we developed more sites than I had the previous two years freelancing on my own. But there’s more to the story. Our one partner was extremely well-networked (you know, the type of person with 1000+ Facebook friends). And he was the technology consultant for an international business networking organization, which landed us the gig to redesign their corporate website. Word spread and we began designing the individual chapter sites. Purely through the strength of his connections, we obtained regular work, both in and outside the organization, without even trying. Yet, in spite of that, it was still only part-time income—not nearly enough to support three people, including my family and a soon-to-be-wed partner. If we wanted to grow, we had to do more.

“Great Customer Service Generates Referrals”

Many business owners imagine that providing “great customer service,” “quality products,” and “something extra” will get people talking about them. After all, in the age of information “one good deed” can spread, right? Of course, all of these are important; but, in reality, they are “the cost of entry.” In other words, clients expect these things, and if you aren’t doing them, you shouldn’t be in business to begin with. If you neglect good customer service or offer poor quality products, you’ll most certainly lose clients. But none of these ensures you’ll gain any. Don’t confuse the purpose of customer service with sales and marketing. The aim of customer service should be to provide such exceptional service that your clients wouldn’t dream of going elsewhere. Its goal is to keep customers, not obtain new ones. But don’t take my word for it. Ivan Misner, who wrote the book
 (actually, several) on word-of-mouth marketing, has this to say:
… good customer service is critical for the success of any business, but if you expect happy customers to talk about you a lot, think again.

“People will Offer Unsolicited Referrals after a Remarkable Experience”

A few months ago, I found myself stranded alongside the highway with a truck full of boy scouts. As we waited for the tow truck to arrive, one of the scout leaders asked who my mechanic was, saying that he was less-than-pleased with his. I’m one of those rare and fortunate individuals who has a mechanic he can trust. Over the past six months, I’ve had more than my fair share of car trouble. Yet he always gets it fixed faster and cheaper than any other mechanic I’ve known. In spite of that, this is only person I’ve referred him to. According to the theory, sitting under the hot sun with a dead alternator should have caused me to spontaneously start talking about my mechanic. It didn’t. Had the other person not asked, the topic might never have come up. So much for “unsolicited” word-of-mouth referrals. If my mechanic’s depending on me telling others “how pleased” I am with his services, he’d better rethink his marketing strategy.

“Word-of-Mouth is a Powerful Marketing Strategy”

It’s not that word-of-mouth doesn’t happen. It just doesn’t happen often enough. As a marketing strategy, word-of-mouth lacks three key components of any good advertising and marketing plan: reach, frequency, and impact. You can’t reach enough people, with ample frequency to have a lasting impact. Incidentally, the next time I saw my mechanic, I mentioned that I’d referred my scout friend to him. Sadly, it turned out he’d never called. If you’re truly convinced word-of-mouth is such a powerful marketing strategy, trying putting it in your business plan as your primary method of customer acquisition, and see if you can get funded. I doubt there’s a bank or investor on the planet that would give you money if you did. So, have I convinced you that word-of-mouth marketing is a fruitless waste of your time and energy? Good. Stay tuned for next week’s article: Why Word-of-Mouth is the Best Form of Advertising
. Confused? So I am most of the time.

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Feeling lost and out-of-control when meeting with potential clients? Asking the right questions can put you back in the driver’s seat. Get my free guide, 27.5 Must-Ask Questions for Consultative Selling. Just follow me on Twitter and I’ll send you a link.

Frequently Asked Questions about Word-of-Mouth Advertising

What is the concept of word-of-mouth advertising?

Word-of-mouth advertising is a form of promotion where satisfied customers inform others about a business, product, or service. It’s an organic process that happens naturally when people share their positive experiences with others. This form of advertising is considered highly effective because it comes from a trusted source, making it more likely to influence purchasing decisions.

Why is word-of-mouth advertising considered the worst form of advertising?

The phrase “word-of-mouth is the worst form of advertising” is somewhat misleading. It doesn’t mean that word-of-mouth advertising is ineffective. Instead, it highlights the uncontrollable nature of this form of advertising. Businesses cannot control what is being said about them, and negative experiences can spread just as quickly as positive ones, potentially damaging a company’s reputation.

How can businesses encourage positive word-of-mouth advertising?

Businesses can encourage positive word-of-mouth advertising by providing excellent customer service, offering high-quality products or services, and building strong relationships with their customers. Additionally, businesses can incentivize customers to share their positive experiences through referral programs or rewards.

How can businesses mitigate the risks associated with word-of-mouth advertising?

Businesses can mitigate the risks associated with word-of-mouth advertising by actively managing their reputation. This includes monitoring what is being said about them online, responding to negative reviews in a professional manner, and taking steps to resolve any issues that may arise.

What is the role of social media in word-of-mouth advertising?

Social media plays a significant role in word-of-mouth advertising. It provides a platform for customers to share their experiences with a wider audience. Businesses can leverage social media to engage with their customers, respond to feedback, and promote positive word-of-mouth.

How does word-of-mouth advertising compare to other forms of advertising?

Word-of-mouth advertising is often considered more effective than traditional forms of advertising. This is because it comes from a trusted source, making it more likely to influence purchasing decisions. However, it’s also less controllable than other forms of advertising, which can pose risks for businesses.

Can word-of-mouth advertising be measured?

Measuring word-of-mouth advertising can be challenging due to its organic and often informal nature. However, businesses can use tools like customer surveys, online reviews, and social media monitoring to gain insights into the impact of word-of-mouth advertising.

What is the impact of negative word-of-mouth advertising?

Negative word-of-mouth advertising can have a significant impact on a business’s reputation and bottom line. It can deter potential customers and damage relationships with existing ones. Therefore, it’s crucial for businesses to manage their reputation effectively and address any negative feedback promptly and professionally.

How can businesses turn negative word-of-mouth into a positive?

Businesses can turn negative word-of-mouth into a positive by addressing the issue promptly, apologizing if necessary, and taking steps to resolve the problem. This can turn a dissatisfied customer into a satisfied one and even lead to positive word-of-mouth.

Is word-of-mouth advertising relevant in the digital age?

Yes, word-of-mouth advertising is still relevant in the digital age. In fact, with the rise of social media and online reviews, it’s become even more influential. Digital platforms provide a space for customers to share their experiences with a wider audience, amplifying the impact of word-of-mouth advertising.

John TabitaJohn Tabita
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Former owner and partner of web firm Jenesis Technologies, John is currently Director of Digital Strategy at Haines Local Search, a company providing local search marketing solutions to SMBs, including print and Internet Yellow Pages, web design, and local SEO. When not working or spending time with his family, John offers great sales and marketing advice on his blog, Small Business Marketing Sucks. When not working or spending time with his family, John offers great sales and marketing advice on his blog, Small Business Marketing Sucks.

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