The truth about word of mouth advertising

“Well, we rely on mostly on word of mouth advertising.”

Talking to people about their marketing plans, I often hear this. This statement can mean a bunch of things. It could mean that the company has contracted with a successful WOM agency to actively engage consumers in a WOM campaign. Or it can mean that they have instituted some social media tactics into their marketing mix to engage consumers in conversation. It could mean that they have established a strong referral program with incentives for customers who refer new customers.

More often than not, it means, "We don’t do any planned advertising or strategic marketing programs and we don’t think we need to, because when we unlock the doors and flip on the neon “open” sign, the customers show up and buy stuff." Or in a manufacturing setting: "We rely on quality ratings and supplier ratings, respond to requests for quotes from the prime contractors in our industry and are happy with our piece of the pie."

The problems come when they experience roller coaster periods of activity—up one month, down the next. Or when the big contract comes to an end and there isn’t another one to replace it. Or when a new competitor enters the market and takes part of those customers that seemed to just show up during operating hours.

The truth about word of mouth marketing is that, while powerful, it is not something that just happens. If you are relying on that last customer who had a great experience to go tell his five closest friends, who will tell their five closest friends and so on, then you are not really engaging in word of mouth advertising. You are hoping. And hope usually runs out as more competitors enter the market place.

The big message is this: WOM is not just something your customers do. It is something that you must help shape. Many times, this is best done through branding initiatives.

Think about it. If you have customers talking about your business and you don’t have a well-defined brand, who knows what they are saying about you? You may have five different customers saying five different positive things about your business. If we are honest, most of the time we aren’t really good at five different things. In best-case scenarios, our businesses are pretty good at four things and really good at one.

When you establish a brand identity based on a brand promise (that one thing, not the four others) and communicate it to your target market through the appropriate mediums, you begin to shape the words that the consumer uses to brag about you.

Perhaps the biggest disconnect with businesses on this issue is (shocker) over money. Branding costs money (often times lots of it), while WOM is free. Right? Wrong.

Firms that are successful over a long period of time have well-defined brands that are reinforced by their actions. They do this by investing resources (AKA $) in branding and reap the benefits of positive WOM after.

So is your company engaging in WOM advertising or just hoping?