Word-of-mouth marketing doesn't just happen. Learn from these strategists what it takes to cultivate it.
Word of mouth (WOM) has become hotter than ever for interactive marketing professionals. Today's savvy consumers often trust a recommendation more than traditional advertising, marketing materials or other company communications. In fact, according to the Word of Mouth Marketing Association (WOMMA), two-thirds of all economic activity in the United States is influenced by shared opinions about a product, brand or service. In the online world, customer opinions (customer reviews, ePinions, and star-ratings, et cetera) have become even more central to a company's reputation.
Online marketers are grasping for credible, actionable, reliable WOM metrics because they know they can't manage what they can't measure. The question is: What's the right way to measure WOM to yield actionable results that generate the greatest return to the bottom line?
Research shows that recommendations that are "bought" (through incentive programs and other similar marketing initiatives) do not yield the same financial benefits for a company as "earned recommendations" do (which result from truly satisfying customers). Therefore, it is crucial for marketers to learn how to earn positive WOM, because recommendation is highly correlated with likelihood to purchase and it fuels acquisition as well. The only way to earn recommendation is to learn what is truly satisfying customers and address those issues rather than just surveying them about their likelihood to recommend.
The following is a list of ways that marketers can get reliable WOM metrics that enable them to change the future rather than just capture what has already happened.
Create a foundation by using a comprehensive measurement methodology
Before you can start to gain insights into how you can earn positive WOM, you have to have a solid methodology in place that will result in actionable intelligence about what's driving customer satisfaction. Survey customers in your relationship marketing database through email and during website visits to determine how well you're meeting their needs and exceeding their expectations. If you use the right methodology, you'll be able to link customer satisfaction to likelihood to recommend the site to a friend-- or not. The leading cross-industry customer satisfaction metric is based on the American Customer Satisfaction Index (ACSI) methodology and applied to relationship marketing by ForeSee Results and McElroy, Inc.
Find your strengths
Identify which aspects of the interactive marketing programs are producing the best quality traffic-- i.e. site visits from customers who are highly satisfied and are therefore highly likely to recommend and purchase the product. Profile these high value customers in terms of demographics, purchase behavior, creative message and offer. This yields insights into what you're doing right. Since customer satisfaction drives customer behavior like WOM, it is essential that you understand specifically what's driving satisfaction and the impact of satisfaction on behavior. What can you learn from your best customers?
Learn from your weaknesses
Through segmentation, identify and profile customers who rate the interactive marketing and website lower and are less likely to recommend the website to someone else. Which marketing channel drove them to the website? Which creative message and offer did they receive? Zero in on which aspects of their relationship marketing experience are lowest rated and have the highest impact on overall satisfaction, and ultimately, on WOM. This will allow you to make adjustments that improve satisfaction of this customer segment and grow the ranks of your strong supporters.
Develop a feedback matrix
You want to be able to use a database to track your key customer segments, satisfaction with various marketing programs and new customer growth. The database should allow for cross-referencing so you can see which segments are likely to participate in positive or negative WOM.
Learn from new customers
When new customers opt-in to your relationship marketing program, be sure to ask them what drove them to sign up and include "recommendation from friend, colleague or family member" as one of the options.
Make necessary changes!
The best way to earn positive word of mouth is to satisfy your customers. If customers are dissatisfied with particular elements of your website or email communication, product selection, service, et cetera, then change them! Making the proper improvements and investments based on customer feedback and sophisticated metrics that help you prioritize will earn you more positive WOM than the best promotional campaign in the universe.
WOM is a complex metric and cannot be managed by asking just one or two questions. In the long-run, you cannot pay or cajole or convince or reward someone for recommending your company. You have to satisfy them.
As you continually improve your relationship marketing programs based on customer satisfaction metrics, you should expect to see WOM numbers grow exponentially. Most importantly of all, you also see purchases and revenues increase. After all, what good is WOM if you don't see the results to your bottom line?
Larry Freed is president and CEO of ForeSee Results, a customer satisfaction management company with solutions based on the American Customer Satisfaction Index (ACSI). Vicki Panagiotis is president of interactive marketing agency McElroy. Under her leadership, the agency has grown to offer a unique combination of services -- including creative, marketing, technology and business analytics -- that clients cannot find together in other interactive agencies.