Word of mouth is far and away the most powerful force in the marketplace. Yet it is the most overlooked. Companies have vice presidents of sales, advertising and marketing, but there isn't a single vice president of word of mouth in any corporation in the country.
Why is this? Presumably, because most people think they can't do much about word of mouth. Most marketers believe that word of mouth can't be measured. They believe that it can be influenced, to be sure, by advertising and other marketing media, but can't be influenced directly.
Word of mouth can be harnessed. It can be directly influenced, causing - under the right circumstances - a stampede of customers to your products that cannot be stopped by your competitors.
By "word of mouth," I mean informal conversations about products and services between people who are independent of the company providing the product or service, in a medium independent of the company.
In contrast, advertising is communication of a message originated by the company in media the company owns or rents. A sales message is a "company line" delivered by a representative of the company.
Word of mouth is much more credible than your most sincere salesperson. It's able to reach more people faster than advertising, direct mail and even the Internet, because it can spread like wildfire.
Even more important than its credibility, reach, speed and ability to break through the clutter is its power to get people to act. In study after study with almost every category of buyer, word of mouth has been shown to be what is known as the proximal cause of purchase - the most recent thing that happened before purchase. In other words, the purchase trigger. People tend to make major purchases on the advice of trusted peers or experts.
What is the power behind word of mouth? It is independence. If you ask most people why word of mouth is so powerful, they will tell you that it's because of its objective, independent "no ax to grind" nature. A decision-maker is more likely to get the whole, undistorted truth from an independent third party than from someone who has a vested interest in promoting a point of view.
There is another, more complicated reason word of mouth is so powerful. When a person is deliberating about purchasing a product, he reaches a point where he wants to try the product. He wants to get real-world, low-risk experience. Up until then everything is informational, abstract and somewhat removed from the real world.
Word of mouth is "live," not canned like most company communication. That means it is custom-tailored to the people who are participating in it. There's no pitch; people are responding to questions, the ones the decision-makers are asking. Customers pay more attention to the message.
Word of mouth is an honest medium because it is independent of the company. Advertising and salespeople are notoriously biased and not always fully truthful.
This credibility also explains why word of mouth is often negative. It's the only place where the decision-maker is likely to hear the negatives of the product or service. Another reason word of mouth is often negative is that people are three to ten times more likely to relate a negative experience than a positive one. Studies have shown that a satisfied customer is likely to tell approximately three people, while a dissatisfied customer will tell approximately eleven. This is often because positive experiences are expected and soon forgotten, but unresolved negatives make people angry and frustrated, energizing word of mouth. Some of the strongest and most frequent word of mouth results when a dissatisfied customer is turned around by an extraordinary response to their expression of dissatisfaction.
Word of mouth is subtle. Its effects are seen, but more than likely companies and their competitors think the action in the marketplace is due to their active promotional efforts. Align your advertising and sales force with word of mouth...your products and services will sell faster at a lower sales cost.
Do you know anyone you want to talk with concerning your own experiences?