Trying to spread the word about a hot new financial service, product or about your company? Word-of-mouth marketing is the most powerful and persuasive weapon you can use, and it won’t cost you anything! Successful word-of-mouth campaigns harness the often underestimated power of the personal contact, and will be heard above the media noise.
What is word-of-mouth marketing?
- Word of mouth communications are actually at the centre of the marketing universe. Just as it is untrue that the sun revolves around the earth, marketing does not really revolve around advertising, selling, and promotions. Much of marketing actually centers on illusion-creation.
- Word of mouth offers an authenticity to it because the source is normally independent of the company. The reference initiator is normally independent of the product or service. He or she is offering his or her own candid opinion, and therefore the marketing appears credible.
- Advertising is the renting of a medium to send out a carefully crafted message to a specific audience. Everything is paid for, whereas word of mouth is a more effective tool. And best of all, it is absolutely free.
- Word of mouth can take on a life of its own. There are no limits to how far-reaching it can be. Just study how fast a good joke circulates by word of mouth, mail and by Internet.
- Studies have shown that a satisfied customer will tell an average of three people about a product or service he or she likes. Even more important, the record indicates they will tell eleven people about a product or service with which they had a negative experience.
- Because this is the age of the Internet, e-mail, websites, chat rooms, and video teleconferencing, word of mouth is even more important to businesses today than ever before. The impact is faster and more far-reaching.
- The most important way by which sales can increase is by increasing the speed with which decisions are made. Decision speed is the time it takes for your customer to go from initial awareness to enthusiastic use and recommendation of your product or service. Simplicity, ease, and fun govern the decision process.
- Marketing success is determined more by the time it takes for your client or customer to decide on your service or product than by any other single factor. Decision speed is more powerful than positioning, image, value, customer satisfaction, guarantees, or even product superiority.
- Shortening the customer’s decision cycle means that your product benefits, claims, and promises must be obvious and compelling. Information must be clear and balanced. Credible comparisons must reveal meaningful differences, your trials should be free and easy, your evaluations must be clear and simple. Guarantees should be ironclad and generous. Testimonials and other word-of-mouth marketing must be relevant and believable. Delivery, training, and support offered must be superior.
- A good way to spread the word on your company is to circulate true, positive stories about it. FedEx is famous for its legendary employee who hired a chopper just to deliver a package forgotten on the tarmac. People love a good story, and that is the essence of word of mouth.
There are nine levels of word of mouth. They range from the public scandal with a rating of minus 4, the product boycott of minus 3, to the raving customers or advocates who tell how great your product or services are (plus 1 to 3) to the “talk of the town” level (plus 4).
Examples of those who have reached plus 4 level of word-of-mouth marketing are: Lexus automobiles, the Saturn car company, Harley-Davidson, Netscape Navigator, Celestial seasonings herbal tea, the Internet, and Apple Computer’s graphic interface.
Harness the Power. Use experts like customers, suppliers, salespeople, expert roundtable discussions and selling groups. Every financial advisor should take advantage of seminars, workshops, and speaking engagements, dinner meetings, teleconference, panel discussions and trade shows.
“Canned” word of mouth consists of putting out videotapes, audiotapes, using a well-designed ebsite, or distributing CDs. There are also ways such as referral selling programs, testimonials, and networking methods, hotlines (800 numbers) and e-mail marketing.
Traditional Options. Word of mouth also means using customer service as a word-of-mouth engine for public relations, placements, unusual events and promotions. You can use word of mouth in ads, sales brochures, or direct mail, salesperson programs, sales stars, peer training. Salespeople can be effective as word-of-mouth generators, and there are even friend word-of-mouth incentive programs (“tell-a-friend” programs). Useful gifts to customers (articles, how-to manuals or special boxes and or financial organizers) that they can give or tell their friends.
Use Your Staff. Employees should be actively spreading word of mouth about your services and products. Spread stories around about examples of superior customer service. Give people a common mission and make rewards dependent on the accomplishment of the mission.
Word of Mouth is Fast!Word of mouth accelerates the process of customer decision-making from first deciding to decide, asking for information, weighing options, evaluating a free trial, and then finally becoming a customer and your enthusiastic advocate.
A southern financial advisor was a word of mouth skeptic, until success hit him right in the pocket book. He had always avoided offering his planning fee-based clients a guarantee. He felt this was unnecessary because, “I’ve never had a client unsatisfied with a plan." But, a new young and unbiased associate wanted to do so – in part because he felt it difficult to ask for a $3,000 fee. So they developed a fancy “Satisfaction Guaranteed” gilt-edged certificate. Each prospect was given the certificate and when the plan was delivered the client signed a satisfaction acceptance. But the real payoff was when three unknown prospects called to schedule an appointment to discuss having a plan prepared, saying, “I understand you have a 100% Satisfaction Guarantee.” Word-of-mouth was at work!
Taking Action. With customer-oriented service, your financial services firm can increase sales via word of mouth. Here are some specific techniques for creating a word-of-mouth campaign:
- Find some way to get your service or product into the hands of key influencers.
- Provide a channel for the influencers to talk and get all fired up about your product.
- Gather testimonials and endorsements, like actual letters of praise.
- Form an ongoing group that meets once a year in a resort, but once a month by teleconference, or with which you communicate by list e-mail group.
- Create fun events to bring users together and invite nonusers. Saturn, Harley-Davidson and Lexus have been wildly successful with this approach.
- Produce cassettes, video-tapes and clips on you Website featuring enthusiastic customers talking with other enthusiastic customers.
- Custom–create some CDs for each potential customer.
- Create a club with membership benefits.
- Pass out flyers. Tell friends. Offer special incentives and discounts for friends who tell their friends.
- Use the Internet! Your website and email are powerful tools.
- Do at least one outrageous thing to generate word of mouth about your or your firm; but be sure it ultimately has a tie-in to your business.
- Empower employees to go the extra mile.
- Network and brainstorm for ideas.
- Run special sales or promotions.
Script your word of mouth activity! Tell people exactly what to say in their word-of-mouth communication. Carefully choose the phrase or term you want to have associated with yourself - and use it often.
 Ed Morrow is a personal financial planner and a consultant to financial advisors in the areas of practice management and computerization. He is the author of six software programs, including the financial Practice Builder Financial formerly “Text Library System.” You may contact Ed Morrow at the Financial Planning Building, P. O. Box 0430, Middletown, OH 45042, phone 800. 666.1656 or edm@FinancialSoftware.com
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Financial Planning Consultants, Inc.