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.
may buy a product the first few times based upon the “Four P’s”
Product, price, promotion and place
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:
1. Their relationship with the brand
3. The product/service benefits
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
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.
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.
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
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.
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.