Seeds of Growth - Word of Mouth

The Negative Impact of Word-of-Mouth

Dan Crites — Mon, 21 May 2007 18:23:06 -0600

I listened to a story on NPR this afternoon about the negative impact of bad word-of-mouth, you can listen to it here. Very scary. This is part one of a two part story by Wendy Kaufman, hopefully the second part will bring out the positive aspects from good word-of-mouth.

The basis for the article comes from research by the Wharton School of Business. They found that 1 out of 2 customers has a customer service problem when they shop. Worse is the fact that they then tell friends, family, and colleagues about it and embellish the story in the retelling. The overall result is that 1/2 of those that hear the bad news story won't shop at those places they heard about. Ouch! Those that improve on the situation certainly create a business advantage.

It goes to show the need for businesses to hear from their customers, the bad news as well as the good. Hearing the bad news you can make efforts to correct the situation so that bad embellished stories won't be spread. You even have the opportunity to turn a detractor into a promoter. You can also get to the root cause and fix it to reduce future bad experiences.

When you pass out a Promoterz bounce back card you automatically build an accurate customer list, increase repeat sales, increase referrals and prevent lost business. Pretty powerful little card. Learn more

One More Chapter in a Great Story

Dave Free — Fri, 15 Dec 2006 14:55:51 -0700

About six months ago I wrote about a small, bricks and mortar business that had successfully implemented and was enjoying the fruits of an online system that increased word-of-mouth marketing for their business. You can read the original post here. In a nutshell, the business is a haircut salon for men--a Sportclips franchise to be exact. The owners, Chuck and Joan Matheny, were using Promoterz to 1) Collect feedback from their customers, 2) Establish an "opt-in" email relationship through which they could communicate directly with their customers, and 3) Give their customers an easy way to tell their friends about their store. Top line result: more than a 20% increase in revenue.

Here is a new chapter in their saga:

Corporate SportClips introduced and has been encouraging franchisees to promote a "Season Ticket" concept. Customers willing to pay for six haircuts in advance get a free upgrade to MVP service on each of those haircuts (MVP includes a hot towel and shoulder massage among other things). Because several hundred of the Matheny's customers have asked to receive updates about the store by email, promoting the Season Ticket with an email seemed like a natural. Think about the value of Chuck's email list: because he had reached out to his customers and provided a way for them to opt-in, he could now communicate with those that wanted to hear from him directly and at absolutely no cost. He didn't have to wait for them to come into the store or pay for an expensive ad.

Rather than just encouraging the customers to come in to a store and ask for a Season Pass, we decided to put the technology to the test and offer the customers a quick and simple way to buy the card directly online. The email included a "one-click" buy button. Customers could opt to have the card mailed to them or come into the store and pick it up. The test has been a great success. Several customers have purchased online and the orders continue to come in. Cha-ching! A new online revenue stream for a bricks and mortar business.

Small test--significant implications. Here is a small "old industry/bricks and mortar" business that has figured out a way to use the internet--not as a glorified yellow-pages ad, but as a tool to generate new revenue streams, increase repeat customer visits and collect new leads--all of which have a direct impact on the top and bottom lines.

The real "no-brainer?" The Matheny's used Promoterz to do all of this. The cost: $50 per month per store.

If you are not regularly staying in touch with your customers someone else will. How do you stay in touch? Learn more

Self-Multiplying Customers!

Dave Free — Mon, 04 Dec 2006 15:53:01 -0700

I received a newsletter today from the folks at Nova Mind. Nova Mind makes a great mindmapping application that I use quite a bit. They also have a project management package for the Mac that looks good. I have yet to give it a try. Anyway, one of the lines in their newsletter caught my attention:

We often find that there is a single license sold in a particular place, and then within a couple of weeks there is a huge cluster of licenses sold within that same area, and we would like to thank all of you who think of your friends and associates now and recommend NovaMind to them.

What a beautiful thing! Isn't that what we all want? Self-multiplying customers! Nova Mind has some great products. They work well and have a significant impact on your productivity. It is hard not to talk about them (ask Joe and Dan how many mindmaps they have seen from me).

As we all know, in today's chaotic marketplace new customers are hard to get. Once you get them, it makes a whole lot of sense to not only keep them, but keep them so happy they multiply.

Need some help? See our sponsor Promoterz

More happy customers. More repeat sales. More referrals. Learn more

Complaints Happen

Dave Free — Thu, 30 Nov 2006 15:24:53 -0700

If you are in the service business--for that matter if you are in any business--no matter how hard you try to be perfect, sooner or later a customer is not going to be pleased with the service they receive. The inevitability of it shouldn't discourage you from trying to be perfect, but when a mistake happens the recovery should become job #1.

That dissatisfied customers tell their friends is a fact. How many they tell on average varies depending on the study referenced but it is somewhere between 4 and 10. One study notes that those they tell are 5 times less likely to come to your business than the original dissatisfied customer. Ouch.

But there is hope. According to Restaurant Hospitality "Rule-of-thumb numbers show that roughly 60 percent of complaining customers will eat at your restaurant again if you resolve their service issue, and almost all customers (96 percent in some studies) will come back if you solve their problem to their satisfaction and do so quickly."

What is the best way to resolve issues? Hospitality cites a study called “An Examination of Guest Complaints and Complaint Communication Channels: The Medium Does Matter!” out of Cornell University School of Hotel Management. It concludes that nearly fifty percent of unhappy guests want to talk to the boss. Free drinks and comp meals are nice, but what they really want is to let the boss know.

So how easy do you make it for your customers to let you know about the service? You can't always be in your business. Do you make it easy for them to contact you? You might be surprised what you learn and you will certainly have the opportunity to "save" good customers.

Plug from our sponsor: The Promoterz system is one easy way to make sure customers always have a direct link to you and you have a direct and convenient way to respond to them. The system invites every customer to provide feedback online and immediately notifies you and your managers of feedback as it is received.

More happy customers. More repeat sales. More referrals. Learn more

2,998...2,999...3,000! Sleep at last!

Dave Free — Wed, 15 Nov 2006 11:59:14 -0700

Business Week's question of the week this week asks with ads everywhere "is advertising today creative--or creepy? How far should Mad Ave go?" I found the 3 responses they included interesting:

Joe Gardner, features and business affairs editor at The Onion, notes that if people "don't read all blogs with a discerning eye, they deserve any deception that's heaped upon them."

Kalle Lasn, co-founder of Ad Busters magazine, responds that "3,000 marketing messages a day seep into the average North American brain. That level of advertising is stressing us out."

And Ted Murphy, CEO of PayPerPost.com says that younger generation knows that to get free content they have to put up with product placement. In his estimation "it's a trade off they're willing to make."

As business owners, the real question for all of us is in this kind of environment is how do we effectively let those that would be interested in our product or service know we exist? There are probably many answers to that question, but near the top of the list has to be our customers. Those who have used our product or service should become our greatest and most powerful advocates in spreading the word.

Disclaimer: in an effort to help you avoid any deception being heaped upon you, this blog is sponsored by Promoterz, a great tool to help business owners turn their customers into advocates.

Get customer feedback, generate referrals, and increase repeat sales for as little as $150 a month. Learn more

76% Think You Are a Liar

Dave Free — Mon, 06 Nov 2006 17:13:45 -0700

The Word of Mouth Marketing Association has some great statistics and presentations available on their site. The title for this post comes from the finding that 76% of consumers think that businesses don't tell the truth in advertising. That fact and other nuggets can be found in this presentation.

The obvious follow on question becomes, who do consumers trust? The answer is also obvious: each other. From the same presentation 92% cite word of mouth as the best source for new product ideas, up from 67% in 1977. The fact is that as the marketplace clutter continues to build, word of mouth becomes more and more of a necessity to grow a business.

I posted a few weeks ago about the Hawthorne Effect and the role it can play in helping to develop advocates or promoters for your business. Dr. Paul Marsden of the London School of Economics, has written extensively about the Hawthorne effect and how Consumer Advisory Panels can be a tool to harness the power of the Hawthorne Effect to increase word of mouth.

We like the way Paul thinks and decided to do some testing of our own to see what business owners think of Consumer Advisory Panels, the Hawthorne Effect, and our system Promoterz, which can be used to setup and manage online consumer advisory panels. If you are a business owner and would be willing to take a few minutes to share your thoughts with us, we'd love to know what you think. Click here. You'll be asked to watch a brief video and answer five quick questions.

The Pumpkin That Sold Me a House

Dave Free — Thu, 26 Oct 2006 10:30:33 -0600

This morning I found this pumpkin on my doorstep--again. The Coen's are the realtors that helped us buy our home nearly three years ago. Every year at this time we get a pumpkin and an invitation to their Christmas party. They did the same for my brother. In fact, when I was preparing to move to Mesa and asked Joe if he knew any realtors, he said "Oh yeah, we just got our pumpkin from the Coen's. Here is their number."

Just a gimmick? For some it could be, but we've been to the Coen's party. We didn't feel like customers. We were friends. My point is the pumpkin is a nice way to get attention (and there are countless other ways to get attention) but if you don't back it up with a genuine relationship it will be nothing but a gimmick.

Looking for a house in the Phoenix area? Contact the Coen's.

(Looking for a remarkable real estate web solution?)

The average American consumer discusses brands 56 times a week. Are they discussing yours? Learn more

They Call it the Hawthorne Effect

Dave Free — Tue, 24 Oct 2006 11:35:48 -0600

In the 1930's some studies were held at the Western Electric production facility outside Chicago in a place called Hawthorne. The intent of the study was simple enough: invite a handful of employees to participate in various working condition tests to determine which conditions were most conducive to increased production. Those conditions that "tested" best were then to be rolled out to the general production floor. One of things they tested was brighter lights. Production went up. Then they tested dimmer lights. Production went up. In fact, no matter what they tested, production went up!

Dr. Paul Marsden, from the London School of Economics, brought my attention to the study and the results which have come to be known as the "Hawthorne Effect." He explains it like this in the preview chapter of his book Connected Marketing:

By singling out a small group of employees to participate in an exclusive trial, participants felt valued, special and important. The special attention they received gratified their ego and created a positive emotional bond with what they were trialing. The practical upshot was that the research trials effectively transformed the research participants into advocates for whatever it was they were trialing.

What does the Hawthorne Effect have to do with growing your business? Creating advocates, or promoters, or evangelists is the first step to harnessing the power of word-of-mouth marketing. The researchers at Hawthorne created advocates by singling out a small, exclusive group, giving them special attention, and asking for their opinion. It is possible to do the same with your product or service.

Case in point: text book publishers. Whether they know it or not, text book publishers have been using the Hawthorne Effect to sell more text books for years. The smart publishers pro-actively select instructors with large adoptions and stellar reputations to review forthcoming text books. Sure, they get good feedback to improve the text, but they also realize that professors that review texts are much more likely to adopt them. I know this because I worked with a unique company called Content Connections that helps publishers do exactly that. Content Connections has developed online tools and processes that facilitate the review process and helps authors and publishers harness the power of the Hawthorne Effect.

Put the power of the Hawthorne Effect to work for your business today. Choose some customers, make them feel special, and ask for their feedback on new products or services. Not only will you get good feedback, you'll get advocates and all those they go on to tell.

Need some help? Contact us at Zeryn.

The Happiest customers tell on average 8 other people. Who are your happiest customers? Promoterz knows. Learn more

What if All Marketers weren't Liars?

Dave Free — Fri, 29 Sep 2006 11:02:07 -0600

Realtors are notorious for their creative use of marketing terms. "Open floor plan" means there are holes in a few walls etc. Here are a few more creatively used terms. But this morning as I was out running I noticed this real estate sign. Maybe this guy just ran out of "I'm gorgeous inside" signs and it was the end of a long day so he sighed and went with the "A Nice Place" placard. Whatever it was, it was simple enough to get my attention.

Simple and honest are remarkable. You could argue that "A Nice Place" is still stretching the truth. Wonder how many calls this sign would bring...

Do you remember your customers on their birthday? On their anniversary? Do you give special notice to recently acquired customers? Promoterz does. Learn more

Wanna Listen to a Good Story?

Dave Free — Tue, 26 Sep 2006 14:44:50 -0600

We dipped our big toe into the brave new world of "podcasting" this week. For those that don't know exactly what podcasting is, Wikipedia defines it as:

Podcasting is the method of distributing multimedia files, such as audio or video programs, over the Internet using syndication feeds, for playback on mobile devices and personal computers. The term gained wide popularity as a portmanteau of iPod and broadcasting, but was seen before that as an acronym for "portable on demand".

So there you have it. A podcast is an audio file that you can listen to on your iPod (or other MP3 player) or your computer. Most podcasts are serial in nature. So once you sign up, you get a new episode every week or day or whatever the time period defined is.

Benefits of podcasting? From a marketing perspective, they are one more way to create a more personal connection with your audience and tell a story that you just can't do any other way. Think of it as getting the opportunity to sit down personally with each prospective customer and tell them personally why your product is so great. It is also a great way to establish the fact that you are an "expert" in your industry. From the listener's perspective, podcasts offer convenience. Podcasts can be downloaded at the office or at home and listened to while commuting, exercising, or doing any other activity.

How popular are podcasts? Depends on who you ask. According to this CNET article, some researchers are predicting that the U.S. podcast audience will climb from 840,000 last year to 56 million by 2010.

Not wanting 56 million potential customers to live their lives in ignorance of Promoterz, Joe, Dan and I gathered around one of our computers last week and recorded our story. Why the picture of the 3 Stooges with this post? Well, you see there were three of us...

Listen now.

Find your happy customers and put a megaphone in their hand. Learn more

More Buzz for Promoterz

Dave Free — Fri, 22 Sep 2006 17:38:04 -0600

Couldn't resist pointing you to some more great things being written about Promoterz (c'mon, it's our baby! what do you expect?)

Robert Kingston over at Small Business Branding, posted a terrific "how to" on getting your message right and getting it out. He includes this about Promoterz:

If you take a look around now, a lot of businesses are realizing how beneficial WoM is for promoting their message. One such business I admire is called Promoterz who advocate the importance of being remarkable and worthy of your customer’s attention.

Zane Safrit is CEO of Conference Calls Unlimited and maintains a blog worth reading. He checked out Promoterz and had this to say:

Interesting service. I liked it. I REALLY liked their video. For a small company, getting started, running fast and being completely dedicated to their customers' immediate needs...this is the tool, I think. It incorporates the power of Fred Reichheld's Net Promoter Score and The Ultimate Question with a standardized, but flexible, program to stay in touch with your customers, follow-up, generate reports, extend special offers, etc.

Need we say more? Watch our REALLY cool video.

Unhappy customers tell on average 22 other people. If you ticket price is $50 that is $1100 in revenue. How would you like to know before they tell 22 others? Learn more

Would you recommend Cingular?

Dan Crites — Fri, 15 Sep 2006 07:01:33 -0600

Yesterday my bill from Cingular arrived. Two months earlier I had added my daughters phone to our family plan. For the first month a new phone gets free, unlimited text messaging which allows you to figure out which messaging plan to sign up for. Let me tell you that teenage girls text a lot!

After the first month I got on Cingular's web site, logged into my account, and changed her texting plan to allow MANY text messages, 3000. Turns out that's just enough. But, when the phone bill arrived yesterday it showed that I didn't change the plan so the text portion of my daughter's phone bill was $170. If you're wondering, that represents 2700 text messages in one month (busy fingers).

I called Cingular, 611 on my cell phone. I explained to the customer service rep how I got on the web site and made a change to my plan to accommodate my new rapid texter. She checked the records and found out that I made a change to the account but that I ended up with the same plan. To me that means "no change" but they have record that I did something that day. She said she would refund half of the $170, not because she had to but to show good faith. "I don't have to do this sir". She didn't believe that I made the change. By-the-way, if you didn't already know, Cingular has a website that frequently has problems. Well, at least that's been my experience over the past 1 1/2 years.

While having this discussion with the customer service rep my Cingular call just dropped. It makes a sound when that happens, "da-da-da-da-daaa".

I called right back, got a different rep, and told my story again. She listened. She checked and found out that I had the same plan before and after the "change". Then she said "I'm making changes to your account sir, I'm post dating your text package to the date you tried to make this change". Then she took care of the overage and other assorted things she needed to do to get it to all work out so that my bill would be correct.

THANK YOU!!!

Cingular is an immense company. I won't argue that Cingular is a good wireless provider or not. Mostly it's worked well for me but a bad experience with them and I would be pushed to change providers, it's hard to have a lot of loyalty to a mega-company. It's hard unless they deal with you correctly in all circumstances The experience with the first rep wasn't good, it was exactly what I had feared would happen. That coupled with the extra $170 and other fruity action from their web site and I had plenty of reason to leave Cingular's service. Had this story ended there I'd be with another wireless company right now. But, one customer service rep made all the difference for me. She made it all right, over the top of the first one and other bad experiences I've had with the company. A huge company and one person in it makes the difference. A remarkable person.

I don't talk about my cell phone company unless something gives me reason to, whether it's good or bad. It's good this time and I'm telling others. I'm using a megaphone (this blog) to do it. If Cingular were my company... I'd be rich! No, no, no. If Cingular were my company... I'd find out who my happy customers are and give them a megaphone to tell their friends about how great a company I have.

If you have a company you should do the same with your happy customers. Find out who they are and give them a megaphone to tell their friends about what a great product or service you have. You can do it and you should do it. If you need help with the finding and the megaphone you can get it here.

The growth of your business will be determined by what your customers say about it. Do you know what they are saying? Learn more

Hey, look what I discovered: Animal Style!

Dave Free — Wed, 13 Sep 2006 14:02:41 -0600

Did a little substitute teaching this morning at a local high school ( Go Toros! ) Think you are a good presenter? Go volunteer at your local high school. If they're not interested, they don't even pretend to be.

As part of the lesson I played a game with the kids. I made some motions with a stick, tapped it on the ground a few times and asked the kids to guess the word I was thinking. Of course, none of them could (the word was hat). I then gave one student in the class the "decoding ring" to make sense of my stick motions and senseless babbling and sent her out of the room while the rest of the class picked a new word. The student with the secret was now easily able to "guess" the word. The really interesting thing that occured was that after a few rounds other students began to figure out the code. Their reaction was always the same, they shouted "Oh I got it!" and immediately wanted to tell the world. The first student that was given the code never had the same reaction.

Here is the principle (based on purely non-scientific data): people are more excited to share that which they "discover." In fact, you have to work hard to keep them from sharing. It was all I could do to get the "discoverers" to sit still and keep it secret. After all, what fun is discovering something if you have no one to share it with?

Do you let your customers discover anything?

What? Are you saying I shouldn't shout everything I have to offer to my potential customers?

Exactly. In-N-Out Burger is a master of this. They have an entire "secret menu" that you cannot find anywhere in any In-N-Out store nor on their website , but it is part of their process. The items are in their point of sale system and print out on the receipt.

What good is a secret menu? Have any third parties ever created web pages dedicated to your menu? You can read about In-N-Out's here , here , and here and several hundred other places. Oh, and you can download a pdf version of it (complete with pictures) here. Ever met somebody that loves In-N-Out? They've got the secret menu memorized and will describe every option for you. They've discovered something and can't wait to share.

So, what are your customers going to discover today?

You work hard to make sure your customers are happy. Don't waste happy customers. How easy is it for your customers to share with their friends? Learn more

Whitewashing fences today...

Joe Free — Mon, 11 Sep 2006 15:48:07 -0600

Quick, how many words can you come up with to describe this photo? If you said pool, child, kid, water, goggles or blue you and I would have just made 100 points at one of Googles latest projects.

Remember how Tom Sawyer made whitewashin' the fence so tempting to those passing by?

It seems Google might be doing something similar to label images they have indexed.

Here is how it works. You push a button and get paired up with a partner. A 90 second timer starts and you each are shown the same picture. You type in as many descriptions as you can. As soon as you have a description that matches you are shown another image. Each image you match is worth 100 points. At the end you can even hover your mouse over the images and see what your partner guessed.

I think it is brilliant. Not only are they getting free work from people, but they are discovering what people really think when they see an image. Oh yea, it is also fun.

Think of your business, is there a fun way you could get feedback from your customers helping you whitewash your fence?

(By the way my current record is 900 points in 90 seconds)

Get customer feedback, generate referrals, and increase repeat sales for as little as $150 a month. Learn more

Great Coffee--and I don't even drink the stuff!

Dave Free — Mon, 11 Sep 2006 15:35:29 -0600

So this morning I was scheduled to give a presentation on how to create word-of-mouth using Promoterz to new Entrees Made Easy franchise owners. While the participants were on break and I was getting my laptop set up a discussion about coffee got started. I think it started with a person asking if there was more coffee. There was. She wanted hers dark. Another person overheard and said, "Oh, you've got to try my coffee!"

"Your coffee?"

"Yeah, it's just down the street. The guy is a chemist and has traveled the world to find the best beans. You know how there is a burnt after-taste with some roasted coffee?"

Everyone nods in unison. By now there were seven people listening intently (yes, I counted them.) I was listening too, and I don't even drink coffee.

"Well this guy figured out a way to roast it so that it has no after taste."

"Oh, where is this place? We're going there tomorrow."

What a perfect lead in to a presentation about the power of word of mouth! Notice how the happy customer started the conversation by referring to it as "my coffee." There is a customer that feels like she is a part of something great and is not only willing, but excited to share.

You can't buy better advertising. Are your customers that excited about your business?

Full disclosure: I'm not being paid to write this and I wouldn't know what a good cup of coffee tastes like. But, here are the details: It is called The Village Coffee Roastery and is located in Scottsdale, AZ. Here is a review from a local paper and here is their website . Looks like you can order online! Tell them Lisa sent you...

Unhappy customers tell on average 22 other people. If you ticket price is $50 that is $1100 in revenue. How would you like to know before they tell 22 others? Learn more