8: Turning Loyal Clients into Advocates
The author relates the story about a nonfiction self-help book ("The Road Less Traveled") that sold very poorly and wasn't marketed aggressively by the publisher - but over time, people who read it recommended it to people they knew, and there was eventually sufficient groundswell for the publisher to take a second look and be more aggressive - and ultimately, the book became a record-breaking best-seller. This anecdote underscores the importance of customer advocacy.
When a customer recommends your products to others, you have reached the highest level of customer loyalty and a powerful ally. While word-of-mouth used to be on a small scale and slow to take effect, the Internet now makes individual advocates a powerful voice.
Blitzed
The author returns to the notion of advertising. It's estimated the average American is exposed to over 3,000 "marketing messages" every day, which diminishes the impact of these messages. In effect, people have learned not to pay attention - and even when you can get their attention, they give very little credence to marketing messages, and have become jaded and cynical.
Meanwhile, word-of-mouth remains fairly rare, and as a result it is a credible and powerful phenomenon that can have a huge impact on sales. A few examples are provided to show the significant impact of positive word of mouth, as well as the devastating effect of negative, on movie ticket sales. Tactics in the industry have shifted to providing information in advance of release, but once the film hits the box office, promotional effort virtually stops and momentum is carried by word-of-mouth.
A few PR disasters are also mentioned, where companies attempted to squelch word-of-mouth on the Internet by turning their lawyers loose- which alienated some of their fans, and even more potential customers when the story about their aggressive behavior reached more people and generated more negative sentiment than the critics they attempted to silence. It's also noted that companies have damaged themselves by attempting to shut down "fan sites" that were favorable to them, as they wanted to control the information being released.
As such, companies have learned to be supportive of fan sites, and indifferent to criticism. The "winning" strategy for managing online buzz is to accept that the company is just one of many voices talking about the products, to support those who support you and respond gently to critics, even if it means accepting that some negative remarks are entirely fair.
(EN: additional details are given about how to "feed" the blogging community good information and build a cadre of allies that will help spread positive news that will drown out disinformation and criticism, but there are other books on the subject that are more comprehensive on this topic.)
Why Word of Mouth Can Be Powerful
Referrals and testimonials have long been recognized as the most powerful way for companies to recruit new customers. This is largely because a referral comes from a credible source - an average person, with no financial interest, whose advocacy for your product stems from genuine appreciation.
(EN: The author also doesn't mention the social dynamic, which is significant. When a person who is a trendsetter for a social group advocates a product, or when a significant number of less influential members of the same group use a product, then the use of that product becomes a defining characteristic of the group - to belong to the group, and to maintain the acceptance of other members, you must be "like" them - which means buying and liking the same products as they like.)
Another advantage to word-of-mouth is less selling expense. In effect, the product advocate has already created awareness and "sold" the benefits of the product for you, which saves you the effort of doing these things yourself. In some instances, the prospect approaches the firm in a "ready to buy" state.
It also holds that people are more loyal to products that are recommended by others. The author merely observes that this is so, but doesn't delve much into the reasons, except to imply that a product with a referral trumps a product without one.
A few random bits: For certain services, such as auto repair or home improvement, it is believed that people who have major projects will put off having the work done until they can find a vendor they can trust. One vendor feels that word-of-mouth also tends to attract customers who are willing to pay extra for quality, which is a much more lucrative and loyal customer base than those who are constantly seeking discounts and do not consider quality to be important.
Generating Word of Mouth
The author presents a number of anecdotes from companies that sought to generate word-of-mouth.
The first set of examples underscore the importance of providing good customer service, either through being excellent at the seemingly mundane day-to-day support tasks, or providing something unique that distinguishes you from the competition. (EN: I've seen this notion elsewhere: the only way to get people to say that you are outstanding is to actually be outstanding.)
The second set of examples isn't so much about being outstanding as being unique or ubiquitous. An example of this is when the name of a product became a common term: Xerox, Kleenex, Band-Aid, and other brands became eponyms for the products they sold - such that a person doesn't ask for a photocopy, but a "Xerox copy". (EN: when firms approach this level of familiarity, they often fear losing their trademarks and attempt to discourage people from using their mark as a generic term. However, my experience has been that they don't try very hard, just make a token effort, which is probably wise.)
The next set of examples suggests the value of reaching the "influencers" as a way to get them talking. This is especially true today, given that the Internet makes it possible for people to have greater reach. A nice quote from a software marketer: "You don't need to reach two million people ... you need to reach the right two thousand people ... and they'll reach the two million."
Another example is provided of a department store that hired some of its best customers on a part-time basis to help it plan and promote events. This example is fairly uncommon in that, in this instance, it was well-to-do women (country-club class) who were willing to work for low wages, a few days here and there, for an employee discount and something to do with their spare time. The "work" they did on-site was negligible, but it got them to talk to their peers about the store, which had a significant impact on sales to their demographic.
(EN: the author has a fair amount to say about building an online community, but given there are books on the subject, there's nothing new to be noted here.)
Sustaining Word-of-Mouth
A customer who has risen to the level of being an advocate will promote your company, but generally at their leisure and when the opportunity arises. To "maximize your talk factor," you must act to sustain their interest so that they are more proactive.
While companies want people to endorse them to others, it should be kept in mind that an advocate is not an employee: they will advocate when they choose to do so, when they feel it is in their interests (not yours). Primarily, it is reasoned that a person who endorses a product is in it for esteem: they want to be admired for their knowledge, and they want those who follow their recommendations to benefit from them, and thus be socially indebted to the person who made the recommendation.
(EN: it's also worth considering the converse. While a person who makes a good recommendation gains esteem, a person who makes a bad one loses it. This puts the company in a position to have to keep a promise made by someone else - and failing to do so harms that person. This can be tricky, because you may be unaware of the expectations set, or even of the connection between the advocate and this unknown "new" customer who follows their recommendation - and disappointing the new customer harms the advocate, who may then be reluctant to advocate for you in future.)
The author notes that customer testimonials can be used as promotional tools - keep a "success stories" file, and ask for clients to write a recommendation for your services (especially in B2B). it's important to ask permission first - normally, people are amenable to that, though some may be concerned about privacy (B2C more so than B2B)
(EN: A note of caution - testimonials and recommendations provided by your company are not as credible as testimonials "in the wild." Customers expect that you have hand-picked the best comments others have made about you. As such, a proffered testimonial is subject to raise suspicions, but still has more credibility than an unattributed statement.)
Using client referrals when approaching other businesses is a common sales approach: you ask a satisfied customer if they know others who may need your services, and ask their permission to use your name when you contact them. (EN: having been on both ends of this tactic - a salesman approaching me because he'd spoken with someone who knew me, and a salesman using my name with someone else - I'd disagree with the author's suggestion that this is good for customer loyalty. It may be an effective sales tactic, but at best it is only mildly offensive to a loyal customer to be used in this way, provided it's handled carefully.)
A similar tactic in B2C sales are "refer a friend" programs that offer customers an incentive (such as a discount) for referring others to the business. It's an effective marketing tool, in that it reaches people who are similar to your existing customers, hence likely to become customers themselves. (EN: This is also an "effective but precarious" approach, given that there has been a backlash in social media against individuals who market to their acquaintances to earn benefits for themselves, and a distaste for being manipulated in this manner.)
The author suggests a regimen for marketers for staying in touch: send five handwritten notes a day, make five calls each week, and make five in-person contacts each month. The math is rather facile: it gives you 1,560 "contacts" per year - in the form of 1250 notes, 250 calls, 60 visits. (EN: I think I get the point that the author is trying to suggest it's easy to stay connected - but again, it can be damaging to customer relationships to be a person who's always contacting a client with nothing to say, "just checking in" - it conflicts with earlier, and better, advice: to consider the value of the contact to the customer. And if there is none, don't make a call to someone just so you can maintain your quota of five-a-week.)
The author suggests having a customer newsletter to "establish a club feeling, giving customers a sense of being special." (EN: I don't really subscribe to this notion, and have yet to see a customer newsletter that was anything but a sales circular with some generic and thoroughly uninteresting filler content. I'm open to the suggestion it might be possible to do so, but I have strong doubts. My sense is you're better off buying ad space in an industry journal or special-interest magazine to promote, and working the PR angle to get into the editorial copy.)