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There
are many components to the marketing mix, but when you get down to the concern of actually making a profit, two of the most
important are the retention of existing customers and the management of word of mouth. Retention
Consumer
may buy a product the first few times based upon the “Four P’s”
Product, price, promotion and place But
in the consumer services, retail, consumer durables
and B-to-B environments consumers certainly consider these “basics” as well, but once they initially "trial
purchase" the product or service: their relationship with the brand their service experience the product/service benefits delivered
Carry a stronger influence
on future purchase decisions.
At each interaction or “touchpoint “ of their experience (in consumer services, retail, durables,
and business-to-business environments) customers gather information about how the company treats them, the benefits delivered
by the products and services, ease of doing business,
etc.
Consciously and sub-consciously customers take each of these experience and benefit datapoints and
create a sum of their worth. In a similar fashion the customer recognizes the price they are paying for the product or service
experience. Cost is not only the dollars and cents charged but also includes factors such as the
potential risk and time consumed in changing suppliers, perceived or actual expenses incurred, etc.
Consciously or
sub-consciously customers continually compare the sum of the benefits to the price they are paying. This calculation can be
viewed simply as:
Perceived Value = Customer Experience + Product Benefits
/ Cost
They compare this to what they believe would be delivered by other competitive brands. There
can be many manageable components included in Perceived Value ranging from the highly rational
to the highly emotional. Understanding the various touchpoints and the importance and performance of each to customers
is critical in telling the corporation which levers to pull (where to add resources) for the greatest financial return.
Word of mouth Some in the marketing
press might suggest that with the advent of Facebook, Twitter, YouTube, Yelp and thousands of other blog and websites that
the dynamic of word of mouth has all changed. They would have us believe that it’s now all about
viral marketing and manipulating Social Media. Certainly the marketplace has changed, but consumers still
own the public dialogue. Despite the fanfare, and the favorite corporate success stories, for most brands
and in most categories, it still comes down to brand engagement and the total experience that a product or service is providing
to their customers. What has really changed is the number of avenues a consumer has to communicate their
thoughts and their feelings to others, the number of people they can reach with a few key strokes, and the speed with which
they reach out to those friends, neighbors, relatives, co-workers, and even complete strangers. Be it positive comments or negative remarks –
be it online (email, Facebook, Twitter, blogs, personal texts, and more), or offline (a phone call or plain old face-to-face
conversation) -- consumers only write and speak about a company, product, or service when they have: 1) motivation, 2) content,
and 3) opportunity.
Motivation.
Pick any brand you want and the word “complaint” and enter it into your favorite search engine.
Then take that same brand and couple it with “compliment” and search again. Which do
you think produces more hits? Typically bad product or service experience lead consumers to write or speak
to others about a brand. Why? Because they are so angry, or just want to get even, or hope to warn others
and prevent them from suffering the same fate. In other words, because they are internally motivated to act. It’s
not that a positive experience can’t also motivate us to communicate to others. Showing that you’re
the first to sample an exciting new product, sharing news that no one else knows, and having the opportunity to introduce
friends to something that’s free or deeply discounted can drive word of mouth for a short period, but
over time it’s difficult to surprise and wow a customer. Simply meeting expectations
or “satisfying” a customer just doesn’t ignite that kind of emotional charge that motivates a customer to
begin communicating.
Content.
As consumers most of us don’t claim to be experts about the products and services we buy. Be
it a computer, a lawnmower, roofing shingles, software, or life insurance we probably buy with limited knowledge.
Further, the corporation that produces the brand is a giant behemoth in some far away city that stands for who knows
what. Unless we’ve had an incredibly bad or any exceptionally good experience we simply have
little to talk about. With no information to share and no good stories to tell there is seldom much word of mouth generated.
A
new mom talking about diapers, formula or where to buy clothes – you bet they have content. A mother
of the bride communicating about facilities for wedding receptions, an avid golfer speaking about clubs and balls that give
extra distance, a recently released hospital patient telling others about their emergency room experience, they all have plenty
of opinions to offer. But for most brands and most services the storytelling doesn’t come quite so
easily. Opportunity. The great hole in the Net Promoter concept
is of course the question itself: “would you recommend?” Lots of people might recommend, but
most probably won’t simply because no one will ever ask them. Speaking or writing positively about
a brand requires courage and the right timing. Only the most dedicated customer will volunteer their feeling
about the brand unless they are asked. And unless they happen to be carrying a bottle of their preferred
vitamin tablets, or standing at their bank’s ATM, or showing off their Harley-Davidson tattoo, people will have little
idea of which brands to ask them about. I you are thinking that they don’t need to wait to be asked
before they can begin speaking or writing about a brand, that’s absolutely true. But unless the individual
has the previously discussed Motivation and Content, they are unlikely seek out a website where they can express themselves,
or even initiate a discussion with a relative or co-worker. Word
of mouth is neither simple to understand or easy to manage. It does however offer tremendous potential
for those businesses and other organizations that are willing to target improvement.
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