Posted by: Andy Porter | September 8, 2010

So you want more new customers…

Word of mouth is widely recognized as the single most effective form of advertising. Yet at the same time it is commonly under utilized as a distinct marketing avenue and taken for granted.

Conversations with management about Word of Mouth marketing often go like this: “Yeah, I know word of mouth is the best form of advertising, heard it a million times…okay, but what I want to talk about is how to move our web site up in the Google rankings…!”

If you survey owners or managers as to what is important to fix or improve in their business you always get a big hit on “attracting lots of new customers’ or “increasing sales” and a much smaller hit on “improving customer service”.

A major reason for this is that it’s generally thought that it’s easier to get more new customers than it is to improve the quality of service.

One can rather simply create some advertising or marketing materials and get them sent out. Whether it is via email, letters, signage, radio, TV, or whatever medium, creating a message and getting it out there is not very difficult. If an owner cannot do it himself or herself, or they can always hire someone to do it for them.

Creating really great word of mouth for a company takes a LOT more work. It demands that every level of management become intimately involved in every nook and cranny of what happens at every level of the company. From hiring to staff training, from staff benefits to employee discipline, from every phone call answered to every letter or email sent out, every possible point of contact between your company and the “outside world” AND every interaction between owners, managers and employees sets your level of customer service and word of mouth promotion of your business.

Those are a LOT of areas to work on! Maybe it IS easier to just focus on getting lots of NEW customers! This is EXACTLY what a lot of larger companies do. Cell phone companies and banks, to name two examples, more often than not fit into this example, they have given up any real pretense of taking care of their customers, and their MAIN focus is to attract an ever-expanding influx of new customers.

The illogic of what they’re doing never seems to sink in: If they looked to improve their performance for their existing customer base, word of mouth would bring in new business; and then they wouldn’t NEED such an inflow of new people.

Perhaps these large companies with lousy service have had their accountants crunch the numbers and it turned out it was cheaper to get floods of new customers than to spend the time, money and effort to actually improve customer service and garner really great word of mouth from their existing customers.

Smaller businesses have a much greater necessity to ensure that their word of mouth is good. Actually not just good, but great! The smaller the community, the more competition the more important word of mouth becomes.

So, where to start?

Word of Mouth Marketing Basics:

For starters there are actually several different types of word of mouth promotion.

The way MOST word of mouth goes is like this: Your friend just got a new puppy and asks you if you know a good veterinarian. You tell them about Dr. Tim down the street. This is called Solicited Word of Mouth Promotion. This follows the sequence, they ask, you answer.

This is good. BUT if you own or manage a business what you really need and want is UN-solicited Word of Mouth Promotion.

UN-solicited word of mouth promotion is when one of your customers tells other people GREAT THINGS about your company BEFORE they were asked. In this case your customer starts talking you up to people who NEVER asked them for a recommendation. In the case of the veterinary hospital, the happy customer tells their friends and acquaintances how great you are EVEN IF THESE PEOPLE DONT HAVE PETS! This follows a DIFFERENT sequence; the customer loves you, and starts telling everyone.

People who provide unsolicited word of mouth promotion about your business are LOYAL CUSTOMERS. They will tell people (friends, relatives, people at work, etc) about you. They will write about how great you are on their Facebook page (or My Space, or Twitter, any other form of social media).

Another angle on un-solicited word of mouth promotion is that whenever a customer hears or sees an ad for a company that they liked very much (or disliked very much!) they will comment on it to whom ever they are with at the time. If you’re sitting with a friend watching a game or show on TV and see an ad for an insurance company that gave you the most horrible run-around service recently you will probably comment about it to your friend. “That company is HORRIBLE!”

On the other hand if your service from the insurance company was fast and you were quite happy with the result then the TV ad might move you to make a positive comment to your friend.

It is quite interesting to see how your overall word of mouth status affects your other marketing actions. There is actually a magnification factor, plus or minus, good or bad, of your advertising efforts al based upon the word of mouth out there about your company.

(By the way, are YOU a loyal customer of any local business? Have YOU ever provided unsolicited word of mouth promotion for a local business??)

Of course any positive word of mouth promotion about your business is wonderful. But as an owner or manager what you are really after is the un-solicited variety.

Here are a few important questions that you are probably asking yourself right now:

  • What are the specific steps needed to create great word of mouth?
  • What is needed to maintain it?
  • How does one measure and keep track of changes when your word of mouth gets better or worse?

And here are some of the specific points that MUST be addressed fully to answer the above questions:

  1. Top down customer service. Great customer service starts at the top. It flows from the owner to the management, onto the staff and then between the staff. We already know that people tend to treat others the way they are treated. If the owner or management treat the staff with kindness and understanding and follow the next 5 points they will have loyal customers and great word of mouth. If not, they will have trouble.
  2. A business must have a system to gather accurate, up-to-date feedback from customers to really know how the customers feel and what needs work. Otherwise it’s all just guessing.
  3. Constant unrelenting attention on customer service based on the feed back you receive. Hold weekly meetings to discuss what is working and what needs to work better. Ask your experienced staff to come up with ways to handle any customer service problems.
  4. An ongoing program to train and educate staff. This includes: training for their basic duties and complete understanding of the services or products offered, mastery of all applicable software, customer service training and when that’s all done, cross training on related positions.
  5. Recognize and reward service excellence. Employees who excel at customer service should be acknowledged and if possible promoted. Building a team of motivated, empowered staff is the key to creating loyal customers.
  6. Recognize and get rid of employees who constantly gossip, gripe and complain. They cause stress for the rest of the staff and make everyone’s life miserable including their own). If management does not rapidly rid the company of these people they will drive your best staff away.

DO THIS EXERCISE RIGHT NOW Give your company a grade on each of the 6 areas above. Grade each point like in school: A, B, C, D, and F. Write the grades on the left side of the page. If applicable, grade your department on the right in the same manner.

How did you do? Are you interested in tools to improve any of these areas?

These bullet points make up the contents of our management training program “Customer Service Boot Camp for Owners and Managers”.

Our next open-enrollment full day seminar is scheduled for Thursday, September 30th.

The Boot Camp will be held at the Calico Cupboard Café; 121-B Freeway Drive, Mount Vernon, WA

The event starts at 8am and will end at 4pm. A detailed work book and lunch at the Calico Cupboard are included in the fee, which is $150.00 per person.

To visit our web site click here:

To register click here:

To read more articles click here:


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