30Aug

Ep#6: Word of Mouth Marketing

Word of Mouth Marketing interview with Martin incl. what are people already saying about you, negative word of mouth, how to get started and more.

This week we have an exciting interview with Martin about word of mouth marketing. Martin is a marketer, consultant and co-author of the ebook; ‘Word of Mouth Magic.’

Included in this episode;

  • What is word of mouth marketing
  • Every business is getting some kind of word of mouth (WOM)
  • WOM in the wider marketing strategy
  • Who should do it?
  • Is WOM marketing suited to B2B or B2C or both?
  • Negative WOM
  • Turning negative WOM into a positive
  • How to get started using word of mouth marketing

 

The Wanding Videographer

This week’s featured photo is another great snap from The Wandering Videographer.

Download Episode #6

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Nick Morris:

Welcome back to Web Marketing Adelaide.

This week, we have a really exciting guest. We have Martin, a consultant, marketer and co-author of the book Word of Mouth Magic.

Martin, welcome to the show!

Martin:

Thank you very much, Nick.

Nick Morris:

How are you today?

Martin:

Good. It’s one of those times where there’s a lot of stuff going on in small business. Small business is having, I think, a tough time, almost no matter where in the world, they are. And it’s good to be able to offer them something solid for their marketing.

Nick Morris:

Great! Well, let’s just get started by you telling us a little bit about yourself and what you do.

Martin:

Well, my background is, as you mentioned, as a small business owner, so it didn’t come to me naturally to have marketing as part of it. I worked out, I was missing a big chunk of information about how to market myself.

Obviously, in the medical arena, the first thing you do is look at referrals, so I naturally developed an interest in it and started looking into all the information out there about referrals, word of mouth — all that sort of “getting known” – because that was the thing I had access to.

Then, I met up with a colleague who was also doing marketing. In fact, he did marketing for a number of things but one of the things he did was he bought a hair salon. And for the 24 weeks that he owned it, he built it up and sold it.

When he looked back on everything he’d done in his marketing, he worked out that word of mouth and referral marketing had created 253% of growth in his customer base and it’d done that in that short space of time – above and beyond what all his other marketing had done!

So, he decided to put down the information about how he got that word of mouth going, and when I came across it, I went, “Wow! That information is fantastic! You’ve gelled into one place all sorts of things I wish I had known from the get-go when I was starting and working this.”

And so, we collaborated together and that led to Word of Mouth Magic!

Nick Morris:

Great! When was that published?

Martin:

That was back n 2003 so I’ve been online ever since then, and, as most people would know, that have looked in the Internet for marketing, it has changed a heck of a lot in that time. The good thing about word of mouth, as a mechanism, as a way of marketing – is that the techniques and the methods have changed, but the underlying fundamentals remains the same.

Nick Morris:

Great! Well, let’s launch into the topic where you tell us a little bit about what word of mouth marketing is, and why is it something that small business owners should be interested in?

Martin:

Well, I think… I duck every time someone asks me for a definition of ‘Word of Mouth’ because people can make up their own definition.

I think the things people think about in terms of friends telling their friends, in terms of referrals, in terms of bad word of mouth (laughs)—bad reputation and things like that… they’re the sort of things small businesses know.

Every small business is getting some sort of word of mouth. The question really is – Is it damaging to them? Is it effective for their marketing? Or is it just, well, basically untapped in their particular business?

So, my goal is to make sure that people can actually do this as a deliberate process rather than, as often happens, something accidental — When they get a referral, they go,”Oh, that was great! Wish I could make that happen more often.”

Nick Morris:

Great! And how does Word of Mouth Marketing fit into a wider marketing strategy?

Martin:

Well, I think what you’ve got to do is look at what your business is doing anyway.

I mean, there are the rare businesses that don’t use the word of mouth, aren’t gonna get referrals. But by and large, if people drilled out into their own business — and if someone is listening to this now, I’d like them to just think about their own business and their own customers, because as they do, they’ll probably notice that their referred customers or the ones that came because of someone else telling them, are a different type of customer.

On average, referred customers will tend to have a higher level of respect, trust in the business, which means very practically, they’ll often spend more money.

They’ll often spend more money the first time. They negotiate on price less. They’ll often buy more often. And they will often be more loyal to the business if there are hard times.

These are exactly the sort of customers you want to keep particularly because also when they come by referrals themselves, they’re often more keen or aware of how to refer others to a business. So, one referral can get many more, when done appropriately.

Nick Morris:

Right, something you said there made me think. It’s so much more a warm lead versus a cold lead for instance.

Martin:

Absolutely! In some cases, it’s more like just taking the sale and taking the order rather than making a sale. It’s the sort of business we’d all love to be in. People walk in expecting to spend money; they’re really just working out exactly how to do it.

Often a referral is more like that than someone else you have to convince from cold market or whatever or from an ad or from the newspaper. So, in terms of where it fits in their marketing mix, I think most businesses starting up will do it anyway. They’ll tell their friends about their business at the start, but I think more businesses should focus on it because of the return on an investment.

I mean, if I ask a business straight out, “Okay, your marketing mix – you’re spending this much on this, this much on this… How much are you spending getting referrals from your current customers? What’s your dollar value and your budget on that? How many resources of your staff or yourself are you putting into that particular task?”

Now, you know, they’re getting referrals often. They’re doing quality work. People are talking about them. But, very few are actually concentrating on that as a strategic part of their plan that they would commit resources, time, and money towards. And yet, if they look at their business, it’s often a huge chunk.

Nick Morris:

Wow, ‘cause yeah, I can certainly see how it’s an area where people like to get referrals, but they may not think there’s actually something they can do to encourage it.

Martin:

Exactly. And I think the two things that I notice in my work with small businesses is that they either don’t believe it can be done deliberately – that’s one big problem – or if they believe it can be done deliberately, they think it requires begging.

“Do you have to beg? / Do I have to go and beg my customers for referrals?”

What? No! (Laughs) That’s not comfortable for your customer. It’s not comfortable for you. And it’s actually not a successful strategy.

Nick Morris:

Great! And so, by the sense, what you’re talking about… It sounds like something that you do perhaps across the business rather than like a specific sort of task that an employee would do. Is that accurate?

Martin:

Exactly! And I think this is one of the reasons why people have a difficult time setting a plan or budgeting for it because they can’t say “Oh, I will put this ad in this paper and spend this much” or “I’ll go to the website and get my rankings on this or pay this on pay-per-click.”

It’s very much harder to do word of mouth marketing in that type of strategic sense and yes, it covers all your marketing.

If you can get your ads to produce not just a customer but a referral from that… If you can get someone to have a story in part of your marketing pamphlet that also includes the fact that they came from referral – “Oh, when my friend referred me to this business, wow, did they do a good job!” – That’s a little piece of word of mouth marketing. It’s teaching people, “Hey! We get business from others. You can refer to us others you know, too!” And fit it in to the rest of the marketing message. But, that has to be done as a deliberate part of your strategy.

Nick Morris:

Right, and is it better or is it necessarily a need to be done by the business itself? Or could this be something an external marketing person, if the business has one, can do?

Martin:

Well, certainly there are different pieces of the strategy. In terms of web marketing, I would certainly suggest that businesses outsource a lot of that. Most times it’s not the expertise of a business to know how to run these specific things…

But if it’s something like content of it or about how it beds in to the rest of the process, because you want your website to match with your other messages in your marketing and often support it… For example, if your testimonials on your website talk about referrals and word of mouth messages – If your website or your tweets or your LinkedIn profile give people a story to tell, then those are powerful things in word or mouth and they are powerful things of connecting all of what you do together.

So, you can outsource the techniques but you really have to keep the spirit of the business and the core of what the word of mouth message is connected very strongly to the actual people in it – And often, that’s the owner.

What is the owner standing for in their business? Why did they get into the business? What is the value they are offering? And, you know, those messages have to come through all the way through the business, not just in pieces.

Nick Morris:

Great! It seems like if it’s something you can do well or get right, it could be quite a competitive advantage. Would it be right?

Martin:

Well, I mean, if you think about it, referrals are in fact one of the few ways the people can have an entire marketing strategy done in one format. There are businesses that can run only by referrals.

Now, it’s not most businesses but certainly it’s a way you can have a solid strategy and I know that one of the gurus that I looked at when I was first studying this said he wouldn’t have a business running unless he had a solid referral strategy in it.

I mean, it is just so much a part of every single business structure that I think if someone neglects to put it in, they’re leaving dollars on the table – The easiest dollars they’ll often (ever) find.

Nick Morris:

And do you find it’s more suited to say Business-to-business (B2B) and business-to-consumer (B2C) marketing? Or is it for everyone?

Martin:

Well, it’s for anyone whose customers will talk to other customers.

So, you know, I sometimes say anyone from drug dealers to the president. It’s sort of like networking done on a business scale. You might network one to one with some individual people and that would be your word of mouth if you’re B2B and you just need to network with 3 or 4 other people and you’ve covered your entire field you want to link up with.

But if you want to go more broader than that, then it’s called word of mouth rather than one on one networking, and you need a strategy that will allow you to get networking effect and out to a broader audience.

So if someone is listening to this with their business, they can ask themselves—“Could more people refer themselves to the services I offer? Would the customers I currently have or the vendors or the people who already know about my business refer someone else to me?”

Almost inevitably, they’ll say, “Yes, I wish they would!”

Then the question is — “Okay, so what’s your strategy to make that an easy and comfortable process for all involved so it happens more regularly?”

Nick Morris:

Great! So another question I have was what about negative word of mouth?

Is there something or some things people can do to reduce the effect of that or to stop them from leaving a negative word of mouth?

Martin:

Well, that’s a whole topic in itself, so let me not go too broad. The obvious answer is yes, there’s a lot of things that can be done but the key ingredients, I think, are to make sure that you actually get to know that it’s happening.

So, for example, one of the biggest issues with people in terms of their word of mouth is once they’ve dealt with a customer, they never follow up.

They don’t know what that customer has been saying to others or that client is saying to others down the track. So, if they don’t keep in touch, they don’t know what the messages are going on from there and they don’t have the chance to catch things they don’t want and do anything about it.

In terms of online, that’s another thing. If you get bad messages online, sometimes in forums or something gets put up there, are you even monitoring to know it’s there? Do you know how to monitor it?

I mean, I’m sure you, Nick, have taught businesses how to find out such things but it’s a simple business. If they’re wondering now, go to Google, type in to Google your business name, and maybe some variations on it — if you’ve got a lot of results come up. Type in to Google your “BUSINESS NAME review”, “BUSINESS NAME complaint”, “BUSINESS NAME scam”, whatever.

Then, type in the names of your key personnel. See what comes up under those.

What is your current online reputation?

You can get sophisticated and set up ways of monitoring Google or monitoring twitter and those sort of things, if you want. But, at least keeping in touch with what’s there. And then, yes, if something pops up, then I have things I do to help people remove and repair their online reputation. Not necessarily remove, but make it so that when people search, they find the information you want and can look after.

But, obviously, the best form of this is prevention. Particularly with the internet, it’s such a free world you can’t prevent everything.

I think people would need to understand this: A complaint is not so much the issue. What you do with that can often be the solution. And with the right response, you can often turn a problem into exactly the thing people say, “Oh, wow!” And then they talk about not just the problem, but they talk about the fact that you solved it. So, if handled right, there are ways to turn these back into big advantages.

Nick Morris:

Great! That’s some really great information there. Now, you’ve given a few little tips and steps in a bit about word of mouth.

Are there any other things or tips you can give for how small businesses can start to get into the word of mouth marketing game?

Martin:

Well, once they’ve realized they’re already in it, the first thing to do is just to monitor what’s going on.

Have you ever asked your customers, “What do you tell others about me?”

That’s just a simple question to ask but since we’re talking about online and web marketing, let me be a little bit more precise. I think in exploring how people use the web, often small businesses feel like they don’t have enough expertise or they don’t want to do that and may outsource it.

But, one way to think about this is you have to respond to what your customer wants. So these days, you can just ask your customers. Like perhaps previously, if you were trying to run an ad, you’d ask, “Which magazines do you read so I know which place to put the ads?” for your best customers.

So, for your best customers, what are they already linked up with? If a business wants to build a word of mouth strategy around Twitter but none of their customers bothered to read any of the tweets, then there’s no point.

The biggest thing I’d say with word of mouth is, this is one of those marketing strategies where the communication back and forth that you have with the people you want to be your referrers – and by the way, not all your customers are one you would want to build word of mouth with. That’s a totally different strategy but it’s something where you do need to be a little bit selective — but in doing that, they will tell you, “Yes, we’re on Facebook all the time.” or “We look at email but really don’t get involved with the rest of the web.” or “We don’t have computers at all. Don’t bother with it.”

These days I would still recommend businesses have some sort of website or some sort of blog, or something to catch their attention when their customer’s daughter or whomever goes on and checks it out for them, but still.

So, responding to what your customers are telling you is the true power to word of mouth, and the back and forth in the real communication is at the heart of every business that uses it well.

Nick Morris:

Great, really great tips in there.

And when people are trying to find out about their customers, should they be just asking them directly when they come in to the store, or bringing them up, or a combination of things?

Martin:

Oh, I wouldn’t stop anyone from doing any of those things. The main thing about it is not when you do it. It’s more like whether you do it!

And also about the attitude you take with you. I think if you understand that this is something to help the customer to help someone they know, that you have the understanding that this is a benefit to the customer… that the money or the time you spend on advertising could be saved and passed on to the customers as either better products because you got more time to concentrate on them or less charges because you don’t have to have the fees of advertising if you can get referrals in.

Referrals are actually a win-win, and the reason that I really have my focus on this compared to a lot of other forms of marketing is, it truly is the best win-win for all concerned.

You’re not paying an outsider like Yellow Pages or advertising companies. You’re not behooven to Google’s vagaries as to how they change things.

You’re relying on the people who rely on you. And that network is a strong one that can withstand, when you’ve got a worthwhile business that is valuable to others as well.

Nick Morris:

Well, great! That’s a really great bunch of tips there. There’s some stuff in there that I’m just thinking in my head that we’re going to apply to my business when we get off this call. Thanks very much for coming on the show.

Martin:

My pleasure! It’s one of those things where the more I can get this information out there, the more I think it’s valuable for all businesses because the only businesses that don’t want word of mouth are the ones you don’t want to have out there (laughs).

I like supporting businesses that come to me saying, “Hey, how can I do my word of mouth better?”, because that means they’re happy to be judged by their customers on the value they provide in the marketplace. It’s a pleasure to work with those sort of businesses.

So yes, if people are wanting to learn more about this, or take some of these into specific strategies beyond what we’ve talked about today, they can find me at the WordofMouthMagic.com website.

When you put in your details there, don’t just leave it there – get in touch! Make this personal.

Give me a phone call. Link up by email or online. Whatever works best for you… And we’ll see how we can build this together because I look forward to meeting those businesses that are happy to be judged by their reputation, and helping them get the referrals, raving fans, and repeat business the deserve!

Nick Morris:

Great! Hopefully we might be able to talk to you again in the future and get some more tips from great sort of knowledgebase you’ve got there. Have a great day!

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