Entrepreneur - - By John Tabita

Word-of-Mouth: The Worst Form of Advertising

Word-of-Mouth

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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