In the 2013 Wet leisure Industry Survey, word of mouth was put down by many respondents as their favourite form of advertising, but what are its pro’s and con’s?
Why is word of mouth so popular?
Word-of-mouth marketing or word of mouth advertising is an unpaid for form of promotion where satisfied customers will tell other people about a particular businesses’ products or services.
It is often described as one of the most credible forms of advertising because no money changes hands and the people who make the recommendations are putting their reputations at stake, in some small way, by referring businesses to their friends.
Of course, the internet and the rise of social media platforms and ‘money saving’ and ‘expert’ on-line forums has somewhat changed this description and a US research firm estimated that in 2008, $1.54 billion was spent on ‘word of mouth’ advertising.
But the respondents to the survey were probably thinking about a rather more traditional and much cheaper way that their marketing message is spread.
Over the garden fence and at the golf club.
Traditional word of mouth advertising was just that; a face-to-face meeting and the spoken word.
‘John did a great job for me. You should think about using him too.’
These conversations went on all the time in communities and among peer groups.
They still go on and they are certainly playing their part in selling hot tubs, saunas and pools.
People like to tell their friends about new purchases that they have made and they like giving advice to people they know who are looking to buy something.
Someone who has a pool is likely to know other people who want one or at least could afford one. People who enjoy a sauna or a spa are more likely to have friends that might also be interested.
But there are things to be aware of and wary of.
Dissatisfied customers are much more likely to spread the word about a business than satisfied customers. An old adage says, “Every dissatisfied customer tells 13 people and every satisfied customer tells two”.
The second important issue is that traditional word of mouth advertising doesn’t spread the word very far.
The family, friends and peer groups of your satisfied customers are unlikely to carry your message much further than around your own town.
Of course, word of mouth is very persuasive and, apparently; “92% of people trust recommendations from friends and family above all other forms of advertising.”
Of course, that statistic will apply to negative comments as well.
Remember that the component of a business that impresses people most is what they describe as ‘customer service’. You need to be getting that right and indeed, we have another article on research suggesting that people are happy to pay a premium for good customer service.
Another issue with word of mouth advertising is that it is slow to react; it takes time to build.
Word of mouth won’t do a very good job of launching a new product line that you carry or promoting a new service that you have to offer. It certainly won’t launch a new business.
So what part does word of mouth have to play today?
Getting new business from word of mouth marketing is certainly very important and its importance is based on a number of reasons.
New business that comes in through your door due to a word of mouth referral hasn’t cost you anything. That counts in today’s economic climate.
New business that comes in through your door due to a word of mouth referral tells you that you are getting your customer service right.
New business that comes in through your door due to a word of mouth referral arrives as a new customer who already has some trust in you. They will be more likely to accept your advice and your guidance.
But to grow your business in today’s world, traditional word of mouth advertising alone won’t do.
Social media marketing is sometimes called ‘electronic word of mouth’ and it has many things in common with its traditional cousin.
People have a chance to ‘like’ and talk about your business to their friends and peers.
Social media will spread a bad word as rapidly as a good one, so you’re customer service needs to be top-notch.
It needn’t cost a great deal and it engenders trust as potential customers see your existing customers acting as ambassadors for your business.
But once again it doesn’t offer a one-stop solution to all of your marketing needs.
A good website is important and in fact, that was reflected almost universally by the respondents in the Wet leisure Survey.
Different business needs might point you towards different media. For instance, if you have a sale or promotion or are launching a new range then some of the more ‘newsy’ media like local press or local radio may well be best suited to the job.
It’s good to have people talking about your business, but if you rely on conversations over the garden fence then the only person you will be marketing to, is the one who lives next door.
We hope that the ideas in this article are useful for you.
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Were good article and so true. I tend to view ebay feedback (if you trade there) as word of mouth too which is why i can never understand why so many companies seem to just skip over it.
Good feedback is one thing but a neutral or negative is bad and everyone sees it… So why do we just ignore it? In my experience most customers that leave a neg have not bothered to contact the seller or tried to solve an issue but still we leave a one sided remark up for all to see. REPLY! It’s simple, answer the complaint even if its a simple ‘sorry that you’re not happy, please get in touch so we can help’. Show anyone that reads it that you CARE. Problems happen but you can use bad feedback as an advert showing that you as a company want to help, want all your customers tp be happy, and of course that you actually read peoples comments. Personally when buying on ebay i read the negatives first, this tells me just as much as the positives… does the company care enough to defend itself and / or offer assistance to the customer.