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Great example of simplicity

The cartoon on this page is one of the best on simplicity I’ve ever seen.

Cagle Blogs » Best Generic Speech Ever.

Why are some people and organizations incapable of simplicity and ease?

Why don’t some people and organizations simplify and easify their messages, products, directions, etc.?

I’m beginning to think that it’s not that they don’t want to, or don’t understand the value of simplicity and ease. I suspect that they might actually be incapable of simplifying!

Can people who understand the power of ease and simplicity, who devote large amounts of resources to these pursuits, actually be incapable of simple and easy product design, web site design, communication, structure, etc?

I’d like to raise some questions and share some musings.

I won’t bore you with the complexity, but I’ve just been sensitized to this issue in struggling to move my web site to another supplier that gives the site more speed and ease of use. I’m also switching from Drupal to WordPress and moving my mail to Google Apps Mail. So, I’m attempting to do three major switches that all have to be done at the same time. What’s important to you is that I’m learning some important life lessons and questions about Ease and Simplicity (EAS) that I thought I’d share.

You don’t have to know what they are, but WordPress and Drupal are programs for managing the content of web sites like this one. WordPress is a dream, written totally from the point of view of the user. They really understand ease and simplicity. Drupal gets the need for ease and simplicity, but they have been unable to implement it, even when they just spent years on a massive crusade to make it more user friendly.

It’s a fascinating mystery to me why some organizations like Microsoft and Drupal understand the need for ease and simplicity, but seem epistemologically unable to do it despite intense efforts. I’m not talking about the old Microsoft, which didn’t have a clue about simplicity. I’m talking about the present, hip Microsoft which desperately seems to want to simplify and make their products easier to use. There are Google, Apple and WordPress, sitting out there as outstanding examples of simplicity, dominating their markets, the most successful organizations on the planet, with everybody understanding that Ease and Simplicity (EAS) are major keys to their success, with everyone trying to emulate them, and no one able to.

Why can’t fabulous organizations, with amazing resources, copy the Ease and Simplicity that they know they need, that competitors have demonstrated are successful? It’s not that they don’t have the resources, attitudes, will, knowledge or desire. It’s not that it cannot be done: Adobe is a shining example (the only one I can think of at the moment) of a company that had hopelessly complicated products with the most capabilities in their fields. They have somehow gone to elegantly simple interfaces and explanations, while increasing the capabilities of their programs. Photoshop, Dreamweaver, Illustrator, and their other programs can hardly be considered simple and easy in the grand scheme of things. But they are masterpieces of EAS, given that they are professional programs designed to have more bells, whistles and other capabilities than their competitors. They also have simpler versions, like Photoshop Elements and Lightroom, that aren’t just stripped down, they are re-designed from the users’ point of view, for the non-professional in the case of Elements, and from the photographer rather than the graphic artist point of view, in the case of Lightroom. BRAVO!

You would think that Microsoft, Drupal, all the phone companies, HP, and many others, could do anything they set their minds to, given their resources. So what’s going on and what can we learn from it?

Here’s my thinking so far: I realize that the inability to easify and simplify is related to a particular kind of knowledge blindness, but it seems to go beyond just blindness.. Knowledge blindness (and its more extreme form, expert blindness) is the inability to see things the way a beginner or less-informed person sees it. But I think that something much more profound and deeper may be operating here. Maybe it’s not just the inability to see, but Ease and Simplicity demand that someone’s mind work differently: They have to engage in an alien process. instead of piling on more and more information and features, they have to see what can be simplified or eased for the other person, even though it’s easy and simple for them. Then, they have to simplify, which, it turns out, is a very difficult process. It doesn’t only involve leaving things out. It involves many things like abstracting out the details, re-sequencing things, organizing concepts into sub-concepts or higher-level categories, forming new concepts or groups, and many other psychological, communication, and product design skills. It’s a form of thinking that very smart people don’t have to do much, because they are so smart that they can hold so much in mind, and less intelligent people can’t do because it takes a lot of intelligence.

So, my working hypothesis is this: Easification and Simplification can only be done by very intelligent people who have mastered an additional complex skill set, much like some writers and editors have mastered the art of writing simply about complex subjects. No one — to my knowledge and I’ve searched a lot — has set out the methods of easification and simplicity. Hell, there isn’t even a word “easification” “easify” or, for that matter, “funification.” I plan to write about this skill set in much greater detail. Stay tuned.

Secrets of WOM Marketing 2nd Edition

I’m in the final stretch of the 2nd Edition of Secrets of Word-of-Mouth Marketing. I’ll be publishing drafts of sections and chapters here. The final is due on July 31. Those of you who would like a preview can find it as it appears here  — just subscribe to this blog via newsletter or newsreader.

This is very difficult for me to do. I’ve been taught all my life to polish, then publish. Part of me is screaming that I have to polish for the next two months, get it as good as I can, then submit it, let the editors improve it, approve the edits, then wait until the Fall when the final masterpiece comes out, neatly bound and beautifully designed. That’s what I did the first time. My publisher, AMACOM, wouldn’t let me publish on a web site any significant parts of the book before, during or after publication. It was understandable then, before the Word-of-Mouth Revolution, before the soft coup that put the customer in charge. Really in charge, in ways outlined in the book. Who knew, then, that giving away free PDF files of a book would increase sales? OK, Seth Godin did, but no one else believed that it could happen again. And again. And again

So, when AMACOM wanted a 2nd Edition, I asked my agent, Wendy Keller to set up a meeting with Hank Kennedy, President of AMACOM, and my editor, Ellen Kadin. I told Wendy that I wasn’t interested in revising the book unless I could market it using Word-of-Mouth Marketing, not just the traditional marketing I was understandably forced into with first book, having no leverage as a first-time author. I’d rather change it completely and self-publish. Wendy was highly skeptical about our chances of getting a traditional publisher to give permission to do it the way I proposed. I had my doubts, but had nothing to lose, since in this case I was the customer and the customer is in charge. I now had alternatives. Anyway, I prepared my case and we assembled in Hank’s office.

I wish I had a recording of that most extraordinary meeting. To the best of my recollection, here’s what happened:

I got about 30 seconds into my pitch when Hank interrupted. He said, “OK, when can we have it?”

Taken aback, I blurted out, “Is that a ‘Yes’?” He nodded. Even more dumbfounded, I said, “You mean you’re not even going to give me a fight? You’re going to deprive me of the pleasure of at least an intense discussion?”

I don’t remember his exact words, but he pointed out that he wasn’t exactly living in a cave, unaware of what is going on in publishing, media and the rest of the world. He pointed out the obvious, that he was president of a major publisher of business books, books that he actually reads and is proud of. He knew that the world had changed. That it was obvious him that what I was proposing was the ONLY way to bring this book out and that it would be hypocritical to do it any other way. I was so amazed that I don’t remember anything else that happened.

I didn’t put as much up on the web site as I had hoped. It was easier to write privately than to expose first drafts to criticism. While I kept telling clients to “put it out there,” I was still reluctant to do it myself. I came to realize how my clients feel when they don’t even want to get together informal groups of customers to serve as an advisory group. It’s really scary to invite criticism. Our creations are precious little children that we want to protect from the harsh realities of the outside world. But they are also works in progress that are shaped and improved by the outside world much more often than they are trampled. I think I’m over it. I think that somewhere between the people who tweet every passing thought that occurs to them in the shower and waiting until things are “perfect” lies a vast middle ground that we can all be happy with, or at least tolerate, and maybe even come to love. I’m still uncomfortable. Old habits die hard.

There is a lot in life that is simple but not easy.

Welcome to the New Marketing.

The next post will have the actual table of contents.

Secrets of WOM Draft Table of Contents

Draft Table of Contents

Secrets of Word-of-Mouth Marketing


Comments, questions, suggestions will be greatly appreciated.

What’s missing, for you?

What’s unclear?

What made you say, “I can’t wait.”?


Prologue:

The Calf-Path Poem

Acknowledgments

Why this book is different

This is the first and only systematic word-of-mouth marketing system

It gives the guiding principles, not a 1000 page catalogue of all the new media

What’s new in the 2nd Edition

In between the 1st and 2nd Editions, we had the revolution I predicted, but way faster

The Copernican Revolution in Marketing

Why your product can no longer be the center of the Universe

You no longer have a choice about WOMM.

While marketers were reading the newspaper and watching TV, The Customer Has Hijacked Marketing.

You couldn’t have seen it coming. Not to the degree and extent it has.

You can’t control it.

You have to join it.

Why the “old media,” intrusive, exposure models are failing

Why 77% of TiVo owners skip ads.

Newspapers losing readership.

Traditional Media falling apart

Business as UNusual. Why the New Media Explosion won’t let you do business as usual.

How new media is fundamentally different.

Requires relinquishing control

The new attitudes of the Net Generation

You can no longer control information.

The New, New Marketing

The profound differences in the marketplace, even in the last five years

New attitudes, new communication methods, new ways of relating and continuing rejection of the old marketing methods

Net Promoter Score

WOM terminology — a whole new way of talking and thinking.

Web 2.0

You need to change your — and your company’s — way of looking at things

WOM is not a set of tricks and techniques to be added to traditional marketing

It’s a whole new mindset because marketing is a different game, with different rules, in a different arena, and completely different players and fans.

If you don’t know anything about marketing, you probably have an advantage

It’s no longer about controlling information and directly persuading

It is about acknowledging that the customer has control, and showing the easier path.

You can guide, but you can’t manipulate anymore

The Systematic Approach to WOM

In the world of overload, the simplifier is king

Your customers do not need information.

Give them what they really need

They have too much, and they get more, courtesy of the search engines, e-mail, blogs, etc.

They are overloaded, just like you.

You don’t need lists of word-of-mouth techniques.

You need what they need: ease and simplicity

They need clarification, simplification, “ezification,” “funification”

You do it by listing all the decisions, then finding and eliminating the bottlenecks

Word of mouth is your primary tool because…

I’m going to show you how to cut through the hundreds of word-of-mouth techniques to arrive at a simple approach

Dominating Your Market by Ezifying the Customer Decision Cycle

Decision Ezification

Why Decision Speed Determines Product Success

Why Speed Equals Multiplied Sales

The Secret to Shortening the Customer’s Decision Cycle

Make every decision in the decision process easy, simple, fun and fast.

How to use Word of Mouth to Ezify the Decision Process

You have to understand it to sort out the 100s of tools

Everyone now agrees that word of mouth is the most powerful force in the marketplace

But almost no one understands just how powerful it really is

Why word of mouth is the ultimate method for making decisions easy, simple, fun and fast

The Decision Process

How Word of Mouth Works in Different Parts of the Adoption Cycle

The Decision Matrix™

Why WOM is 1000x more powerful than all of traditional marketing combined, and travels much faster

What it really is

The Hidden Advantage: Experience Delivery

Other Reasons Why Word of Mouth Is a Powerful Persuader

1000-5000X more powerful than conventional marketing. Really. And, I’ll prove it.

Intrinsic vs. extrinsic WOM

What Malcom Gladwell and every other author missed.

The Nine Levels of Word of Mouth

The Minus Levels

The Plus Levels

Word of Mouth in the Real World

The Five Ms:

Message

Media

Mavens

Motivation

Measurement

The Content:

Design your story — What is WOMworthy, remarkable, extraordinary about your product, brand. In a story. Why?

It’s more important to be different than better. Lessons from Patch Adams

Why will people talk about it?

Why is it unusual?

What’s unusual about its history, how you do business, your philosophy, principles, your founder’s vision?

What’s the story about how you treat people?

Why should people trust you?

Design your incentives:

Why will people tell the above story?

What’s contagious about it?

Why will it make people look good in telling it?

How will their friends benefit from the story?

Manage your influencers

Identify your influencers and invite their involvement: The experts, product advocates, evangelists, etc.

Build/identify your community.

Give them an amazing “insiders” experience, input, knowledge.

Develop WOM channels (materials and events) that spread the word from the above.

Monitor, track, evaluate, tune, readjust.

Delivering the Message

Sources of Word of Mouth

The Power of Experts

Delivery of Word of Mouth

Champions

Why Traditional Media Lose Effectiveness

How to Accelerate Experience Gathering

Above All, You Need a “Story”

The Science of Memes

Electronic WOM

Web 2.0

Interactive Web sites where customers supply the material (Facebook, MySpace, Craigslist, eBay, YouTube, Flickr, TripAdvisor, and so on, not to mention blogs, podcasts and amateur video).

The New Media

Blogging, Podcasts, Social networking, web aggregators (Digg, etc.), Social bookmarking, Del.icio.us, Diigo, Rating services, etc., etc., etc…

WOM by texting, picture calls, VOIP, Webinars, screencasts, YouTube and other newer methodologies

CGM (consumer generated media) e.g., blogs, chat groups, list groups. Consumer generated advertising. IPod customers commercial. George Master.

[Much more to be added here, especially what’s in it for the reader, how to approach this overwhelming area, etc.]

Harnessing Word of Mouth

The Six-Step Process

The Process in Detail

Ways to Harness Word of Mouth

Internal Word-of-Mouth

Viral Marketing

How to Spread Ideas not Like the Plague but like an atom bomb

The mythology and Siren Songs of Viral Marketing

Why viral isn’t such a good idea most of the time

Viral Marketing on the Internet

Word-of-Mouth on the Internet

Non-Internet Viral Marketing

Constructing a Word-of-Mouth
Campaign

The “Ultimate” Word-of-Mouth Program

How I First Harnessed Word-of-Mouth

How to construct a WOMworthy message

Word of Mouth, the “Tried and True” Way

(Almost) Everything I Know about Marketing I Learned in My Father’s Drugstore, or Irving Silverman’s Rules of Marketing

Specific Steps in Creating a Word-of-Mouth Campaign

Campaign Methods That Work Best

Which Word-of-Mouth Methods Work Best for What?

Word-of-Mouth Checklist

The Word-of-Mouth Toolkit

Negative Word of Mouth

How to monitor it

How to turn it to your advantage

WOMM in special circumstances

WOMM for large companies

WOMM for smaller companies

WOMM for small business

WOMM for professional practices — physicians, accountants, lawyers, consultants.

WOMM for tradespeople — plumbers, other repair persons, etc..

WOMM in Business to Business marketing

For High-Ticket Items

For Services, other intangibles such as ideas


Tips, Techniques and Suggestions

The right way to get and use testimonials

Using Experts

Using Seminars, Workshops, and Speeches

“Canned” Word of Mouth

Referral Selling

Using WOMM in the Traditional Media, when appropriate

Salespeople

How to light the fire, fan the flames and start the Stampede

WOM measurement

Your boss is going to be very upset about this

The difference between research and measurement

Why you can’t measure WOM with traditional control group research – the Silverman Uncertainty Principle. Don’t get caught by the hype.

Researching Word of Mouth

What Do People Talk About?

How to Research Word of Mouth

Other Research Designs

How to Analyze Word-of-Mouth Sessions

Word of mouth fraud and other shady practices

“When people realize that WOM is 1000x as powerful as all of conventional marketing combined, every sleazeball in the world will come out of the woodwork and ruin this medium.” Who said it, why, and what happened.

Warning to scammers, spammers, etc.

How to fight the fraud

Comment spamming, phony reviews, made-up testimonials, etc.

Appendices:

Marketing to algorithms ● Electronic and automatic WOM — no mouths or ears involved ● How to Conduct Employee Research ● Tom Peters and others on Word of Mouth

Case Studies

Recommended Reading

How not to write an email

Don’t you just love all the emails you get that say…

Please do not reply to this email. This e-mail has been sent to you automatically and is not capable of handling responses.

… without giving you a selection of addresses to reply to? Or, without actively asking for feedback, questions, any other way we can be of help?

It’s another example of Knowledge Blindness, plus the lack of a customer mindset.

What’s the big deal? After all, the one that sparked this was only an email confirming the sign-up of my iPad and my iPhone on Optimum Online’s wonderful WiFi hotspot network, an amazing partnership with TimeWarner and others to bring free WiFi hotspots to their customers.

I’ll bet you are doing the equivalent, in many other ways, in other media — missing opportunities to serve the customer, falling into unfriendly, perfunctory formality. I’m sure I am. I just haven’t found them all — yet. But I keep looking. Are you? Take a look. If you can’t find one a day for the next two weeks, you’re either not looking, have a really bad case of Knowledge Blindness or I should be taking lessons from YOU.

  • Where are you missing opportunities to:  
    • Ask for specific suggestions
    • Tell people how to reach you (without looking it up or even clicking)
    • Ask for feedback
    • Give them a tip
  • Did you send out any communications without surprising the recipient with something unexpectedly, remarkably beneficial to THEM?
  • Did you send out any mundane communications that contributed to their boredom?
  • Did you think for a moment that you’re contacting a friend, and while you’re at it, it would be nice to…

Whoops, I almost missed an opportunity:

If you have any comments, questions or suggestions that you want to communicate privately, my private email is: grs at mnav dot com. Any other comments, let’s hear them below.

The Explosion of New Media

April 19, 2010 |  by  |  Word-of-Mouth Marketing  |  No Comments

The Secrets of Word-of-Mouth Marketing was published in 2001. I’ve been compiling a list of the new media that have emerged since then. There are about 20-30 new categories of media (depending upon how you slice and dice the categories , with several major players in each category — hundreds of choices! Totally overwhelming for the marketer. As I was researching the list I’ve become increasingly amazed by how many there are, and how widespread their use is.

But this one rocked me back and almost knocked me out of my chair. I was installing Sharaholic plug-in into my Firefox browser. As I was doing so, I came to the place where they asked me to indicate which Social Media Services I used, and I was confronted with the following set of choices, which was astounding in itself. But what rocked me back was how many of them I use (21!) — coupled with how many I don’t even know much, if anything, about (I admit it: 48).

Now I’m an expert in the new media and Word-of-Mouth Marketing. I stay pretty current. Yet, there were 48 I don’t know very much about. And 21 that I use. But I don’t use them smoothly. I have trouble managing them, and knowing which is best for what, when 2 or more can overlap in capabilities. I’d say I’m in the upper 1% in the 50+ crowd in this area, and I’m overloaded, confused, inefficient.

So, here’s my point: Imagine how the rest of the world feels? There are enormous opportunities not only in new capabilities (where everyone’s looking right now), but in simplifying, integrating, educating and making the whole area much easier and much more useful to people who aren’t kids and have some real work to do.

Social Networks
Social Networks

Strategic Listening

March 25, 2010 |  by  |  Word-of-Mouth Marketing  |  No Comments

 

Listening to Customers Isn’t Enough

Note: This was written in 1990, so the remarks should be taken in the context of that year. It’s amazing how many of the predictions came true!

This article is more timely now than it was 20 years ago!

Companies are trying much harder to listen to their customers — but they’re finding that it’s not only difficult, it’s not enough. What people say has to be interpreted into what people really mean, then translated into customer-oriented marketing strategy and tactics. I call this process Strategic Listening.

Henry Ford once said, “If I’d have asked them what they wanted, whey would have said, ‘Faster Horses.'” While I find that remark amusing, he was right and he was wrong. That’s what they would have said, but I’m sure he was smart enough to have asked the “dumb” question, “What would ‘Faster Horses’ mean to you, specifically?” He would have heard things like, “more time with my family,” “more time at work,” “more sleep, and still getting to work on time,” “less maintenance” etc., and dozens of other themes.

He should have probed the “obvious’ and found out what they really wanted, instead of offering “any color, as long as it’s black,” in another quote questionably attributed to him. He sure let in a lot of competitors when he ignored the preferences and expectations of customers. 

However, meeting customer expectations is also not good enough anymore. You have to exceed expectations. It’s not enough for the customer to be satisfied — the customer has to be surprised, excited and delighted. If not, he is a sitting duck for your competitor.

Over the last couple of decades, we’ve seen a parade of fabulous products and companies commit dangerous — sometimes fatal — marketing blunders, often due to a failure to have the vision to go beyond customer satisfaction..

It’s worth reviewing some of them to remind ourselves how serious a problem this really is, and how disastrous the consequences can be. Here are some quick examples and thumbnail sketches. Please excuse what David Ogilvy once called “the dogmatism of brevity.”

Gimbels

A Gimbels department store vice president told me in 1972 that he didn’t believe in marketing research because their data terminals told them exactly what was bought every day. He said, “We know exactly what people want, on a daily basis. Nothing is going to get us closer to the customer than that.” Only a few years later, venerable old Gimbels closed its doors permanently. So did Korvett’s, and Grant’s. Many others, like Sears, are turning in disappointing performances. Nordstrom, notoriously customer oriented, is aggressively expanding their markets. Moral: Listening to and measuring what is does not tell you very much about what could be.

General Motors

I once wrote to General Motors in the early 70’s, when they were totally dominating the market, and suggested a dealer telephone focus group program. They sent me a legalistic letter explaining that they get ideas from all over, and that they could not accept unsolicited “proposals” because doing so would raise questions and lawsuits about who originated the ideas. In effect, they were declaring that they were closed to new ideas “Not Invented Here.” Lee Iococca is another example. He declares that he doesn’t believe in marketing research. Neither Chrysler nor General Motors has been doing too well lately. Ford, on the other hand, is doing very well. They learned from the failure of the Edsel, and many other hard knocks, as well as the success of the Taurus. They seem to be listening to everyone. In fact, the way they built the Taurus, which is well documented in the business literature, is an extraordinary lesson in external and internal listening. Ford is becoming identified with quality (Quality is Job 1), and delivering quality. It is also winning. Bravo! Moral: If a good idea falls in the forest, make sure you are set up to hear it.

AT&T

AT&T, and the aptly named Baby Bells, conduct more focus groups and surveys than almost anyone. The extent to which businesses are gleefully finding alternatives does not say very much for AT&T’s ability to reach out and touch anyone. Their fear campaigns in particular are a disgrace. The fear of being fired is the kind of thing that some marketers pick up in focus groups and run with, without going deeper. If they did, they would find that motivation by fear almost always causes deep resentment and a subsequent backlash. Moral: The important thing is not what you hear in focus groups, but the application of what you hear to strategic thinking.

IBM

IBM, probably the greatest corporation, maybe the greatest organization of any kind, in the history of the world, has been outdone in many areas by Apple and Compaq. In 1990, [and again in 1993,] IBM announced major staff cutbacks. People are now debating whether it can even survive! Apple has also made major, and repeated, blunders. They misread the higher end of the market with the Lisa, recovered with the Mac, and now they have misread the lower end of the market by not having a competitive product. On the other hand, some of their TV commercials are the best examples of attitude shifting I have ever seen. Unfortunately, the attitudes they are shifting are about computers in general, not about their computers. I’m writing this chapter on a Compaq LTE 286-40 laptop, which I predict will be the highest selling machine in 1990 [it was]. I was happy with my Zenith Supersport 286 until Compaq came out with this machine, which is the size of a two inch thick stack of notebook paper, and weighing not much more. It’s the most customer-driven product that I can remember seeing in a long time. In another three years, they or someone else will come out with an even lighter 586 machine with a color screen . If IBM doesn’t wake up, they will still be wondering if there is a market for laptops. They’ll get the idea when they see how many of their people are traveling with Compaqs. Compaq is the most customer driven company I can name. They are so customer driven that I’ll bet they don’t think they are customer driven enough, and they shouldn’t. Moral: Success often causes hearing loss.

More Examples and Lessons

The Japanese are unseating us in almost every area where they choose to compete. A few years ago, we were saying that they will never compete with us in computers. What do you think will happen when the Japanese start selling major appliances? Do you think it will take the four months that it took to perform a minor fix on my Kitchenaid to get a Japanese dishwasher fixed? (P.S., I’m still having the problem. Seems the problem is built into the machine. It has a separate piece that detaches from the upper water outlet. A $.25 clamp would have fixed it.) They claim it’s not a design problem because no one else has complained about it on their customer service line! A couple of inquiries to dealers, however, revealed to me that it’s a well-known problem to them. Why aren’t they calling the dealers? Why isn’t Kitchenaid tracking, no, soliciting customer complaints? Moral: You have to get to the point where you want to hear what you don’t want to hear.

The pharmaceutical firms, who have probably saved more lives in the last few decades than all the physicians who ever lived, are held in contempt by those physicians and the general public. The physicians themselves, once the most respected profession, are also scorned. Suing them has become a national sport. The pharmaceutical industry is a terrible example of companies keeping their heads in the sand, just about as bad as the Detroit auto makers in the early seventies. In the next decade, there will be many $4,000-10,000 per year bio-engineered drugs, like t-PA. This industry is doing nothing to educate people about the reasons for the prices. If they keep their heads in the sand, people will scream “Rape!” even louder, and governmental controls will be slapped on. Unless the pharmaceutical firms take some stands that I can’t imagine them taking, they will be facing a “windfall profits tax,” or some other form of price controls, much like the oil industry. How many drugs do you think a government controlled and profit-capped industry will produce? Almost every aspect of pharmaceutical marketing is pitiful. Their ads are even worse than those of banks and even worse than those in the industrial trade journals. The ads could be much more interesting and informative, even within the FDA constraints that are so often used as an excuse for mediocrity. Moral: When you have your head in the sand, think about what part of you is most exposed.

Pan Am, once the largest and most profitable airline in the world, probably won’t remain independent. [Note: obviously, it didn’t] The airlines are looking more and more like the railroads every day. In fact the railroads are on their way back. It’s really hard to tell the difference. The main difference that I notice on the shorter routes is that the railroads are more comfortable and arrive sooner. Most business people will go to any lengths to not fly certain airlines. The airlines actually seem to think they are in the airline business. They are not even primarily in the people moving (transportation) business. For business people, they are in the making-meetings-happen-fast business. The airlines are about to face a worse disaster than an oil shortage. It’s called teleconferencing. Moral: Maybe it’s worth tuning into some other channels once in a while.

Federal Express, in its effort to expand worldwide, has forgotten its roots. It is not reminding people of its main reason for being: not that it will get your package there overnight, but that it will make you look like a hero, that it’s what good managers do to take care of their customers, that it’s not nice to make people wait. Their success, widely attributed to their “hub” concept, was actually due not only to the hub concept, but to three other equally important concepts that are almost always overlooked: (1) They advertised to the middle managers who could make the decision to go to overnight delivery, instead of the mailroom people that all other overnight delivery services were addressing, (2) they made you a hero for using them, (3) and most importantly, customer driven marketing and empathy which went way beyond the hub system. They did deliver on their promises to get it there positively, absolutely overnight, with a tracking and inquiry system that was (and is) dazzling. Unfortunately, just as the airlines probably missed their chance to get into teleconferencing, Federal Express has blown its chance to get into the Fax business. On the other hand, they are making a long term commitment to global delivery that is likely to be very painful in the short run, but should prove very profitable in the long run. Moral: You must not only listen for customer needs, but for timing as well.

American Express, which used to be far and away the best credit card, has been winning all sorts of awards with Annie Leibovitz’s pictures of famous people and their line “Member Since 19–.” Also, their line “Membership has its privileges” has been widely praised. They’ll get plenty of awards for the new Paul Newman commercial and the other celebrity commercials that will undoubtedly follow. American Express is spending a whole lot of money to position themselves too narrowly as the credit card for celebrities! I’ve had their card since 1969. So what? Who cares? I don’t feel like a member. Am I missing something, or is the emperor naked? What are they talking about? They haven’t given me a cogent reason to use their card in years, that hasn’t been matched or anticipated by Visa almost immediately! In fact, my nomination for the flimsiest attempt to turn a disadvantage into a benefit is this line from their application brochure: “And, because you pay your bill in full each month, you will also enjoy this distinct advantage: no outstanding balance, no automatic finance charges.” How’s that for a “distinct advantage”? If you pay your bill, your balance is zero! I stopped using their card a few months ago. No one called or wrote to find out why. At least a dozen people I know who charge more than $50,000 a year have also stopped using their AMEX card. No one has listened to them either. Tell me what I get by using the AMEX card instead of VISA. With VISA, I get airline mileage, and acceptance in many more locations. I’d say that “membership” has its pretensions.

The examples are legion: The Club Med forgets its roots and its unique selling proposition; Coca-Cola determines that New Coke is preferred by prospects but forgets to check with its present customers; Coleco first doesn’t anticipate the success of Cabbage Patch Dolls, then blows it by letting it expire like a fad, while Barbie has been doing fine for decades and has never been stronger.

The list goes on and on. When venerable products like Kodak film, Budweiser beer, Chevrolet (they’re cars, remember?) and Sears are taking their lumps, something is happening — actually not happening. Companies may be listening to their customers, but they are either not hearing or not responding appropriately.

It is astounding how out of touch even the best companies are with their customers, dealers, distributors, agents. Most of what company decision makers believe about what customers want comes from what people have told them in sales interactions, which are notoriously lacking in candor.

What’s going on? Companies conduct surveys. They conduct focus groups. Managers go around with salespeople, talk to customers, go to trade shows, even have customer and employee advisory panels. Yet you can find major marketing blunders, most traceable to listening deficiencies of one kind or another, chronicled in almost any issue of every major business publication.

The root of the problem lies in a paradox. Markets, like the people they are comprised of, are both inordinately slow to change, and yet very quick to change. On the one hand, they are cautious, slow to abandon the established way of doing things. On the other hand, many small, difficult-to-detect changes gradually build up until, BAM!, major change.

Marketers are continually assuming that markets will change rapidly, only to find them unmoved. Then, when they assume that the marketplace is stable because nothing is happening, or things are happening according to smooth and predictable curves, when they least expect it they find themselves playing in a game with a different set of rules. The forces have built up, the earthquake hits, the ground moves, and they are no longer playing on a level playing field in the same game.

So, markets change slower than most marketer’s hopes, then faster than their worst fears.

You may be doing well now, but will you have the right products, presented properly, five years from now? Companies tend to make their most damaging mistakes when they are doing well, not when they are doing badly.

Markets are a dynamic balance between constantly changing forces: major breakthroughs, minor technological changes, attitudes, beliefs, fashions, emotions, availabilities, prices, and many other forces. These forces act in several areas: technology, product, manufacturing, suppliers, internal and external customers, distribution chain. The changes take place gradually, beneath the surface, little by little. Then it takes just one person, in the right place and time, to say “The emperor’s naked,” or “I’m mad as hell and I’m not going to take it anymore,” or “What, you don’t use this product?” to cause a radical shift.

Fortunately, while marketplace shifts look rapid when they happen, unlike earthquakes their upheavals are usually predictable far in advance because you can hear the rumblings of the gradual buildup of forces. You just have to know where to listen, how to listen, have a means of listening, and know to separate the signal from the noise. How?

It’s simple. Just listen with your third ear.

Your third ear (an old psychiatric phrase) hears the hidden messages that your other ears cannot. In marketing, it hears what customers aren’t saying, but should be saying, or would be saying if your products were better. It hears what customers are saying behind your back, out of earshot. It hears their attitudes, perspectives, viewpoints that they can’t verbalize. It hears their hidden fears that they won’t verbalize. It hears their emotions: their enthusiasms, excitements, anxieties that aren’t expressed in words. It hears their hopes, aspirations, self-esteem and grandeur that they are embarrassed to talk about. It hears not just the opinions heard by the other two ears, but how these opinions have shifted over time, and why. It hears their discomforts, hidden worries, embarrassments that they try to hide from themselves. It hears what they don’t know and can’t tell you about because they don’t know it yet. Perhaps most importantly, it hears what could excite people, leading to the creation of whole new markets.

Sure, market-share tables and sales-by-region graphs and opinion surveys are interesting, but it is the above so-called “soft” issues that determine the success or failure of your products.

These are the kinds of things you usually can’t pick up in surveys. These are the kinds of things that you probably don’t give your qualitative researchers enough time and latitude to dig out in focus groups and individual interviews. When was the last time you let a moderator go into a group with only one question, to be explored in real depth?

These are also not the kinds of things that management can appreciate when transmitted in dry reports. This information has to go up many levels. It gets translated and summarized. By the time it gets anywhere that it can do any good, it has last all its juice. Freeze-dried information cannot be reconstituted.

I’ll bet you think I’m leading up to a plea that management see more customers, attend more focus groups. Yes and no. Many managers benefit from getting out into the real world and talking to customers. But there usually isn’t enough time, and when there is, many managers hear with their fourth ear, which tells them only what they want to hear.

What am I leading up to? You need an organized listening system. To navigate the marketplace, you need a compass, radar, sonar, lookouts, weather radio, loran, and anything else that can let you look out into the distance and make constant mid-course corrections, even radical shifts in direction. Some of these instruments you turn on when you need them, others you keep on all the time.

But listening — even with the third ear, is not enough. Listening must be translated into marketing strategy.

I call the process I have been describing “Strategic Listening”: Hearing the hidden motivations of customers and translating them into strategic marketing plans and tactical executions.

How to implement strategic listening

How is a strategic listening system to be implemented?

Without knowing your situation, needs and preferences I cannot recommend a comprehensive program of strategic listening that will fit exactly on your plate. So, let me instead offer up a smorgasbord of ideas. Enjoy the banquet, but partake selectively.

You need an outside, professional listener who is an expert in the psychology of marketing. Someone who keeps abreast of your marketing objectives, strategies and tactics, who sets up and manages a listening program among your management, customers, distributors, salespeople and other employees. Someone who is abreast of wider business and consumer trends. Someone who is an expert in psychology, marketing, social trends, and persuasion.

This person must, first and foremost, set up a customer listening program (here “customer” means all customers, internal and external). Here’s what one looks like.

Set up a customer satisfaction index, based on periodic surveys that are based not upon questionnaires returned, but upon people called. People returning a questionnaire often tend to be either very dissatisfied, or very happy. Call them, don’t wait for them to call or write you. Pay to have high level people do the calling, and ask respondents their permission to refer their problem to the right person. Have several measures, such as sales, service, delivery, quality, etc. Ask for ideas, for what would excite them. Also ask them to rate where they think your company will be one and five years from now. Of course, ask about the competition. The absolute numbers are not as important as the changes over time, so do it regularly.

Conduct focus groups on a continuing, recurrent basis to find out what’s behind the numbers, why the numbers are changing, and how you can change the numbers. In other words, get them to help you design what will make them more satisfied, even excited. Take them seriously, even if the form in which they express ideas is not feasible. For instance, if they say, “Give away the product,” that’s obviously not feasible, but it may mask many possible desires. Find out.

Do the same kind of monitoring with your employees at different levels (particularly salespeople), distributors, agencies, suppliers, etc. Make sure that you concentrate on the “front lines.” As you go higher in the organization, you get more of what one of my clients calls the “filtering effect” as information is selectively sent up the line. It is very easy to conduct these sessions among people in the field, with telephone focus groups. They provide anonymity, convenience, people who are not all from the same geographical territory, and, since they are done in the early morning or evening, no time lost from work. (See my articles “The Shocking Truth About Telephone Focus Groups” and “How To Conduct Salesperson Focus Groups.”

Do these sessions on a regular, scheduled and budgeted basis. These are the kinds of sessions that typically no one gets around to, because they are researching specific problems and “don’t have the time.” But unless you have an organized monitoring program, you won’t know how to interpret your other marketing intelligence and research. You will not discover the hidden issues until you have a serious problem. I have a lot of clients who were once marketing research analysts and are now presidents, general managers or executive vice-presidents of their companies. I have asked them how they got where they are. They are unanimous in saying that they took a proactive attitude, and made sure that they were tracking people, not numbers. What I am trying to say, in as many motivating ways as I can think of, is that ongoing customer, employee and distribution chain monitoring comes first in importance, not as something you might get to if you have the time and budget.

Get top management to hear the sessions. How? Obviously, they usually cannot travel to distant cities to hear groups. There are several ways. Find out how different top managers like to get their information. Give those that like them cassettes. Have transcripts made for others. I have been setting up transcripts newspaper style, in columns, with easily-read, proportionally spaced type. Instead of giving someone 60 pages of typewritten type, which is hard to read and looks too formidable, I can give them 9 pages (both sides) which are as easy to read as their daily newspaper, but much more informative. To my delight, they are read. You can even set up a newsletter of transcripts sent out on a regular basis to top management. Important comments can be highlighted, and interpretations and cautions inserted. The beauty is that it requires almost no time on the part of the marketing research people in your company because it is a self-running program. But it sure is visible, and valuable. The widely-accepted idea that top management can’t or won’t listen to focus groups is nonsense. You just have to deliver the information in a simple, accessible, portable, markable, easily read format. It’s just a marketing problem. You have to market your marketing intelligence.

Incidentally, the participants are informed that the transcripts have no names or other identifying information in them, so that employees, suppliers, distributors and customers can speak freely without fear of retribution.

Another idea: I sometimes conduct telephone groups from clients’ offices, with the top executives in the same room. They can write notes to me, or make brief private comments to me during the session. I can switch off my microphone and ask them if a particular idea is new. If it is, I can probe it in depth and develop it. If it is old hat, I can move on quickly. It’s like conducting a face-to-face focus group from behind the one way mirror, in the viewing room! Of course, with this method anonymity is lost, since the participants cannot be promised that their identities will be secret.

Another way to listen is to talk with people as they are using your product, or just after they have used it. Talk to them in stores, coming out of your facility, arrange to talk with them after they have first tried the product. Go and live among the natives. Take, for example Norman Brinker, the chairman of Chili’s restaurant chain, described in the Wall Street Journal (1/29/90) as “one of the country’s most respected restaurant gurus.” and “the Ray Kroc of full-service chains.” He is the founder of Steak & Ale and Bennigans. His disciples have “also gone on to turn around such successful chains as Chi-Chi’s and TGI Friday’s.” The WSJ goes on to say, “Mr. Brinker has demonstrated a second sense for trends. After his 1983 acquisition of Chili’s, then a gourmet-hamburger chain, he recognized that consumers were growing health-conscious and quickly added salads, along with fajitas and grilled sandwiches, to broaden his menu. Friends say Mr. Brinker’s prescience comes from diligent — and somewhat sneaky — research. For example, he likes to pose as a confused tourist outside his own restaurants and asks departing patrons if they’d recommend it. He also visits competitors’ restaurants, walking around like a manager, stopping at tables to inquire about the food and service. ‘You have to listen to customers,’ he says.”

When I was a kid, my father owned several drug stores. He used a “shopping service” to send people into his stores and write detailed reports on how the store looked, the stocking levels and selection, and how customers were treated by the employees, including their physical appearance, knowledge and friendliness. No one was spared, not the managers, his partners, himself or his son. He also had the competitors shopped, and sometimes I got to do the shopping. Every few years this sort of research is rediscovered and renamed. Its current name is observational research. Do it, have your friends or family do it, and have professionals do it. Have market researchers go through the entire purchase process. Use your products, have people who will be brutally frank use them. Do all of this not to catch “wrongdoers,” but to see where people need support, or where systems can be improved. I think that one of the major reasons for the decline of US auto manufacturers was their practice of giving all executives a brand new car every three months. I’ll bet the cars were specially marked, so that they were inspected carefully and didn’t exhibit the usual initial problems that new US cars are notorious for. More importantly, they did not have them long enough to have the problems that develop after three months, much less after several years. What do you think happens to executives who have cars no older than three months? They get no feeling for quality. Every car is experienced as perfect. I have had a string of Olds 98’s. In all if them, the automatic antenna failed after about a year, despite carefully following their instructions. This usually resulted in the electric motor running continuously until the battery ran down, usually at the most inconvenient possible time. The same was true of the cruise control. Each time, I was informed that they would cost $200-300 each to fix. The dealer even wanted more than $100 to disconnect the wire to stop the antenna motor from running continuously (an obvious design flaw: motors like this should turn off after a preset number of seconds). I always had a kid in the local gas station do it for $10. Many other Oldsmobile owners reported this. The dealers say these things happen all the time. But they rarely happened to a GM executive. I think that all auto executives should alternate between brand-new randomly selected cars which they keep for a month, and cars at least two years old. If they got stuck on a cold street because a little thing like their antenna motor ran down their battery, they would probably be in a mood to have the thing redesigned the next morning. [I’m sure you have your own personal stories, too. Send them in to me, or call me, so that I can include them in future editions. I’m particularly interested in success stories.]

Conduct groups of your beta testers, clinical investigators, other pre-launch users. I once conducted groups of clinical investigators and pre-launch users of an eye surgery product. We conducted groups prior to their getting the product, to assess their expectations. We then conducted groups a few hours after half of them used it for the first time in surgery. The ones who hadn’t used it quizzed the ones who had, clarifying several confusions that could be avoided by modifications in the directions. We tracked their use for several weeks, when some of them discovered a mysterious redness in the eye after surgery. They hotly debated whether it was the product or operative technique, while the company was sure it was the latter. The clinical investigators flew around the country observing each other’s techniques and insisted it was the product. The problem was ultimately traced to an impurity. The company delayed introduction, fixed the problem, and credited the pre-launch groups with saving the product. It is now a highly successful product. Not every pre-launch situation is as dramatic, but I have never seen one where there were not major blunders averted, or major opportunities identified.

In another example, I was asked to investigate what the client thought was a minor problem with a part on a machine. They weren’t sure if it was the part itself, the training of the service people, or the general inability of the service people to troubleshoot. In talking with sales and service people, it quickly became apparent that the “problem” was just a symptom of many problems in manufacture, training, communication, corporate organization, incentives, and so on. In the meantime, the breakdown of the part was so serious that the client recalled the product the morning after the groups. It was clear to all concerned that the situation would not have reached major proportions if a strategic listening program had been in place. It was not that the problems had not been detected. Their significance was not appreciated until seen from several perspectives at the same time, and until people opened up in a focus group setting where I, as an outsider, was allowed to probe beyond the superficial, “nicey-nice” baloney that they had been feeding to their bosses. The amazing thing is that the company itself is extraordinarily customer-driven. They just made the mistake of not doing the sessions from the pre-launch period, through the first few weeks or months of the launch.

How to launch a product

Track new products not only quantitatively, but qualitatively: interpretively, motivationally, deeply. I believe that this is among the most glaringly neglected MUSTS in marketing. When you are introducing a new product, or your competitor has introduced a major new product, conduct focus groups and individual depth interviews among customers who have just bought, who have not yet bought, who have rejected the product and who have bought an alternative product instead. Mix people who have bought with people who are still deciding, to research the word of mouth. Talk in focus groups with your salespeople as the product rolls out. You don’t want all of your information through the formal sales channels. I have seen disaster after disaster averted, and clients discover ways to make the marketing more powerful. I have seen new hot buttons discovered, whole new markets uncovered. Several of my clients have had us conduct focus groups on aweekly basis during the first few months of launch. Overkill? They don’t think so. They could have canceled with two weeks’ notice, but didn’t. Here are some of the things they were able to track:

Why people bought.

What the principle objections were and what overcame them. Why people almost didn’t buy, and what got them over their reluctance.

What the company and its competition was saying that was turning people off. The things that people were buying despite, not because of.

What the competitors were saying to counteract the product, and how to not only counteract them, but make the competitors lose credibility in the process.

Which competitors were most vulnerable, why they were vulnerable and how to make the most of their vulnerability.

How satisfied they are. What expectations were met, exceeded, or not met.

What they are saying to other people. How word of mouth could be encouraged to unleash the most powerful selling force, the word of peers.

What is working, and not working, for all the promotional materials, such as ads, sales aids, etc.

What sales, persuasion and promotion approaches are actually working. How has the sales force modified existing materials to make them better?

What materials need to be developed for the next sales cycles.

Also, conduct regularly scheduled groups of users of competitors’ products. This is rarely done, because it is so painful. What you hear will be very disturbing, but will probably galvanize everyone into productive action.

I have heard the executives of several companies at industry meetings talk openly about the unusual responsiveness of their competitors. I even heard one top manager joke (more than half seriously, though) that he thought there might be a spy in their organization. In each of these cases, I knew that the responsiveness, both to the customer and to competitive moves, was due to a strategic listening program among sales reps, customers, competitors’ customers, industry experts, and other kinds of people who should be monitored in depth. It’s truly this company’s secret weapon. Someday I’ll be allowed to tell the story, but I can’t even mention the industry at this point.

More tips on implementing a strategic listening system

Integrate all of the above, plus other methods you discover along the way, into a company-wide crusade. Announce your listening system to everyone: customers, prospects, managers, workers, salespeople, reps, distributors, wholesalers, retailers, and any other “customers” you have to satisfy. Make the program concrete: Hot-lines, focus groups, newsletters (that really have news, not the usual company pep talks and hype). Include in your listening system: Communication of problems instead of just solutions, rewards for suggestions, stories of how listening made someone a hero, sharing of focus group transcripts, voice mailboxes for specific actions, guidelines about when to get back to people, task forces, nationwide conference calls among the field, retreats for middle and lower level people to solve problems, etc.

In future chapter updates, I will give you even more specific examples of what to do. [Please send me your additions and success stories. Also send your requests for what you want to hear more about. Do you want to hear about how to set up hot lines, voice mail, telephone focus groups, distributor advisory groups, other elements of a strategic listening system?]

Also, in future chapter updates I will be listing the most and least customer oriented companies and products. Send me your nominations, and the reasons.

Technorati: The most unresponsive company of 2009, so far – kdbm6q4y8x

September 28, 2009 |  by  |  Word-of-Mouth Marketing  |  No Comments

kdbm6q4y8x

The above cryptic post has been up for a while. A word of explanation and a lesson to be learned:

I have been trying for a month to get this blog indexed by Technorati, the search engine that specializes in blogs. The procedure is pretty simple. When you give them your blog address — in this case http://mnav.com/blog — they give you a little piece of code that is 10 numbers and digits long, which you can see at the top of this post. You publish that on your website, which tells them that this is your site.

Well, that little piece of code has been sitting there for about a month. Technorati claims that it goes out and finds that code on your blog within about an hour. When I keep checking, I get various kinds of error messages which they ask you to report back to them. I've done that several times over the last month, receiving an automated response to my e-mail but never a reply or resolution.

So I went to their support forum. There are dozens upon dozens of complaints about the inability to claim blogs. Most of these are unresolved and unanswered. A wider Google search (what, do you think I'd use Technorati?) reveals widespread complaints about their unresponsiveness chronicled on dozens of websites.

Apparently, their unresponsiveness is both broad and deep, across many different issues, for a long period of time. These complaints stretch over the last couple of years. They are punctuated by occasional responses from Technorati claiming that they are rectifying one kind of technical problem or another, but never, apparently, resolving the issue.

Responsive, customer oriented companies actively monitor the web for these kinds of posts. They respond quickly to complaints, especially from authors and bloggers like me. Especially when the post might give voice to the many many other people out there who are also dissatisfied but not leaving complaints on their forum. let's see how long it takes them to spot this post and respond to me. Don't hold your breath.

I nominate them for Most Unresponsive Company of 2009.

Their slogan should be:

Technorati: Taking Web 2.0 to a new level of unresponsiveness

Oh, the lesson: You don't have to work hard at making people hopping mad. Just ignore them. It's easy.

Knowledge Blindness and Expert Blindness

September 12, 2009 |  by  |  Word-of-Mouth Marketing  |  No Comments

Expert Blindness, and Knowledge Blindness:

A person once gave driving directions to someone who he knew was a first-time visitor to his town. “Drive down to the corner where the bank used to be, and make a right.”

An expert knows everything about an area except one thing: What it’s like to know nothing.

Knowledge Blindness” —and its extreme form “Expert Blindness” — refer to the things that people who are knowledgeable can’t see because they can’t experience what it’s like not to know: such as what words beginners don’t understand, how difficult a task is to do or learn, distinctions that non-experts can’t discriminate and appreciate, and implications  that are dependent on advanced knowledge.

It bears repeating: Knowledgeable people can’t see what it’s like to know nothing.

Knowledge blindness is the tendency to not be able to see the details, complexity, ambiguity and difficulty of  someone not familiar with an area. When something is familiar, it is automatic. The details and examples that built the concept drop out. It is now an abstraction. If you use that abstraction with a beginner, he/she won’t know what you’re talking about. So, experts can talk with each other directly in sweeping abstractions, without the specifics that the abstractions group, while non-experts have no idea what they’re talking about. To communicate with beginners, you nee to start with concrete specifics and real-world examples, then group them into abstractions. That’s why I started with the driving directions example above.

In marketers, this is extremely prevalent in product descriptions. Remember all the times you tried to follow assembly instructions or a product manual and it was gibberish? People do not realize that new customers do not understand even the most rudimentary terminology.

In my marketing consulting practice, knowledge blindness is why most of my clients come to me, although most don’t realize it. When I explain it, it seems to come as a pleasant shock. Pleasant because it’s great to be reminded how expert you are, but it’s a bit of a shock to realize that you can’t go back to experience things through the eyes of your prospects and customers. If you’ve invented the product or service, or been through the steps of its development, you have never actually experienced seeing it for the first time in its current, finished (for now) form.

This is particularly true in finding the decision blocks that are so central to my approach to marketing. You literally can’t see what people are getting stuck on: their vague, unarticulated qualms, worries about things that don’t exist, confusions, etc. Sometimes the customers themselves can’t tell you. You need an outside person who knows the customer decision making process to go through the process of learning about your product, and spotting the probably sticking points, then verifying it by fixing and testing.

If you keep wondering why people don’t get the “obvious,” especially in areas where you are an expert, you’ve got knowledge/expert blindness.

What are some of your favorite examples of Knowledge or Expert Blindness? Add them in the comments section below.

Current Examples to be added to:

Although they have made enormous strides, Apple still doesn’t get how hard it is for people to switch from Windows.

 

Update and Report: 6/26/11

I’ve been using the concept of  knowledge blindness as long as I can remember. So, I was knowledge-blind to its importance. Many people tell me that once they hear the concept of knowledge blindness, they start spotting it in themselves and others several times a day, and find themselves talking about it often. If you practice spotting knowledge blindness in yourself and others, your writing will improve, you’ll spot massive omissions in your persuasion materials, you’ll see competitive opportunities everywhere and your vision will improve.

The Decision Matrix: The Steps in the Decision Process by Adopter Type

 

The idea is to get your customers to the next stages of the decision process, using the messages below in the right order, from the right sources. So, if you are going after early adopters, read across the early adopter row and get people word of mouth in the order prescribed.

 

 
  Deciding to decide [What he/she wants to hear in regular type.] [Examples in italics.] Weighing Information Trial Implemention Expanding Commitment
Innovator Wants to be outstanding.
Wants to hear how ‘far out’ the product is.
It’s so new and unusual, no one’s even heard of it or tried it. It works on a totally new principle. Most people wouldn’t even understand it.
There is little information to gather. He will have to investigate the product first hand.
It’s so far out that there is nothing to compare it to. It’s in a different class.
Wants to be among the first to try.
It is so new that no one has tried it yet. You would be the first.
Wants to be the pioneer who will lead the way for other people.
Now that you’ve tried it successfully, you can help others learn about it.
Wants to push the envelope to the limits.
Have you tried the wild new things it might be used for?
Early adopter Driven by excellence.
Concerned more about possibilities than actualities.
Think of the potential. If this product really worked in your situation, it would change your life or give you a competitive edge.
Looking not as much for ‘hard’ information than for a vision of what might be.
Here’s how I envision using the product. The other products are more ordinary. This one has possibilities.
Doesn’t care that it hasn’t been used in his situation, just that it may be applicable.
This product doesn’t work all the time. But when it does, wow!
Knows there will be problems, wants to know what they are, and how they can be handled.
Here is how to get the most out of it and minimize the problems.
Wants a major advantage for being at the beginning of the curve.
Here are the additional possibilities that will give you a competitive edge.
Middle Majority Wants to be competent. Concerned with practicalities. This has been tried and really works in situations like yours, in your industry, etc. Wants comparisons about how it’s working out in situations similar to his own. Here is the practical information about how this is working out in the real world. Wants to verify that it will work in his situation without investing too much time and trouble.

 

 

 

 

The bugs have been worked out and it is highly predictable.
Wants to know that there is an easy way out if it doesn’t work out. Training, support and guarantees are in place and reliable. Wants to know usage is getting pretty standard. It is rapidly becoming the standard in our industry
Late Adopter Wants to reduce risk. Promise a good deal on a tried and true product. It has become virtually a commodity and this product can get you better price, delivery, service, training, etc. Wants to ‘shop around’ and get the proven product with the best deal.

 

 

 

 

I’ve checked out the pricing and service etc. and it seems to be the best product.
Trial tends to be not for product excellence, but centers around the support system.

 

 

 

 

Check out how wonderful they are to deal with, everyone can fix your problems, etc.
Wants complete support for rolling out full usage of the product.

 

 

 

 

They’ll come in and do it all for you.
Wants to use what everyone else is using, in the way that they are using it.

 

 

 

 

Everybody is using it for everything.
Laggard Wants to be completely safe.
Wants reassurance that it is a safe product where nothing will go wrong.
You’ll get in trouble if you aren’t using this.
Wants to find the loopholes, problems, negatives, etc. If he doesn’t find some, will keep looking.

Here are the risks and how to render them harmless.

Basically won’t try anything new. Needs reassurance that the product is the standard product used in his industry, situation, etc.
Try it, everyone else has and likes it.
Implements only when he has to.
Adopt this product, or else.
Wants reassurance that he is using it in the standard way.
That’s the way we all use it.

Live Books

September 7, 2009 |  by  |  Word-of-Mouth Marketing  |  No Comments

 A "live book" is a book posted on my web site that allows visitors to ask questions, make comments, or even make a contribution to the book (by giving their own example, for instance). By making a comment, your are giving me permission to include it in the book, in whole or in part, as-is or modified, with with or without attribution (at my discretion, although all requests for anonymity will be honored).

Each blog post is dropped into the appropriate book in the right place. You can subscribe to the blog as an RSS feed or as an email subscription, so that you can follow along as I write each book. 

The Calf-Path

September 6, 2009 |  by  |  Word-of-Mouth Marketing  |  No Comments
One day through the primeval wood
A calf walked home, as good calves should;
But made a trail all bent askew,
A crooked trail as all calves do.
Since then three hundred years have fled,
And I infer the calf is dead.
But still he left behind his trail,
And thereby hangs my moral tale:

The trail was taken up next day
By a lone dog that passed that way;
And then a wise bellwether sheep
Pursued the trail o’er hill and glade
Through those old woods a path was made.
And many men wound in and out
And dodged and turned and bent about
And uttered words of righteous wrath
Because ’twas such a crooked path;
But still they followed — do not laugh —
The first migrations of that calf,
And through this winding wood-way stalked
Because he wobbled when he walked.
This forest path became a lane
That bent and turned and turned again;
This crooked lane became a road,
Where many a horse with his load
Toiled on beneath the burning sun,
And traveled some three miles in one.
And thus a century and a half
They trod the footsteps of that calf.
The years passed on in swiftness fleet,
The road became a village street;
And thus, before men were aware,
A city’s crowded thoroughfare.
And soon the central street was this
Of a renowned metropolis;
And men two centuries and a half
Trod in the footsteps of that calf.
Each day a hundred thousand rout
Followed this zigzag calf about
And o’er his crooked journey went
The traffic of a continent.
A hundred thousand men were led
By one calf near three centuries dead.
They followed still his crooked way,
And lost one hundred years a day;
For thus such reverence is lent
To well-established precedent.
For men are prone to go it blind,
Along the calf-paths of the mind;
And work away from sun to sun,
To do what other men have done.
They follow in the beaten track,
And out and in, and forth and back,
And still their devious course pursue,
To keep the path that others do.
They keep the path a sacred groove,
Along which all their lives they move.
But how the wise old wood gods laugh,
Who saw that first primeval calf!
Edited from a poem by Sam Walter Foss, 1895

Quoted in The Secrets of Word-of-Mouth Marketing: How to Trigger Exponential Sales Through Runaway Word of Mouth By George Silverman, AMACOM. This book will keep you off the crooked road of conventional marketing and set you on the straight and narrow path to greatly increased sales with less marketing expenditure.

Please copy and give to a friend or colleague. It’s an example of one of the secrets of word-of-mouth marketing: Give people something valuable that’s an example of your product or service or your quality, or your good taste, with your name on it. You can get an electronic copy of the poem at mnav.com/the-calf-path/ . It will also be an interesting experiment to see how much this obscure poem gets passed around. (Another secret of WOM Marketing: Appeal to the fun of participating in a beneficial experiment.)

Open letter to Pharmaceutical CEOs

August 31, 2009 |  by  |  Word-of-Mouth Marketing  |  No Comments

Open letter to Pharmaceutical CEOs

Re: How to Solve the Current Pharmaceutical Crisis

 

Dear Pharmaceutical CEO,

You are in the midst of a major crisis. I have a solution.

I’m writing to you because this problem can only be solved at the highest level.

The crisis: Physicians and patients are not paying attention to your messages, causing traditional marketing costs to escalate to an intolerable level. This is raising prices, causing a cascade of other crises.

I’m in a unique position to solve the problem: Thirty-five years ago I revolutionized pharmaceutical marketing by inventing "peer influence groups." We’ve reached the end of an era. It’s now time for another major change.

With a fundamentally new approach you will cut spending on new drug launches from hundreds of millions of dollars to about $25–50 million with a greater effect than with traditional promotional efforts. The saved money will give you a higher profit margin while allowing you to lower drug prices. The launch will be twice as fast, cost one tenth as much and be multiples more profitable. The physician’s adoption cycle will be dramatically shortened. Physicians will use the drug more skillfully and more effectively, further driving its sales.

Here’s the solution: You announce that the next significant product will be launched totally by an organized word-of-mouth campaign, without traditional promotion. The only way that physicians can learn about the drug will be physician-to-physician communication: Instead of traditional advertising and detailing, physicians will be directed to a carefully orchestrated series of materials and events in which: the clinical investigators will communicate their experience with the super experts who in turn will communicate with the experts in each field. They will talk with specialists who will talk with generalists. All of this will be accomplished by a systematic approach that will move the physician quickly through the decision process with physicians’ enthusiastic cooperation, using a mix of teleconferences, web sites, e-mail, webcasts, podcasts, blogs, streaming media, roundtables, meetings, personal communication, etc. that weren’t possible as an integrated system even a couple of years ago.

The benefits are enormous for a pharmaceutical firm with the vision to be first. It will be perceived as the boldest move in the entire history of marketing, while in actuality the risks will be low. Physicians aren’t really listening much, their adoption using conventional promotional techniques is slow, and they mostly get convinced to use new drugs through physician-to-physician channels anyway. It will further be perceived as honest, open, and physician/patient oriented. Everybody wins.

I am not talking about leaving this to chance. I am talking about an organized, systematic approach. It’s based on an extensive analysis of how physicians really make decisions, all elements of which I have already executed successfully and outlined in my book, The Secrets of Word-of-Mouth Marketing: How to Trigger Exponential Sales Through Runaway Word of Mouth.

Why take this bold, new step? Aside from the positive PR that it will cause, there is another very sound and newly measured marketing reason. Word of mouth is 5,000 times more powerful than conventional marketing. It turns out that — contrary to common marketing belief — the more advertising and sales rep activity, the less the word of mouth! The reason is that people do not want to look foolish by telling their colleagues about things that they think they already know about from a huge amount of promotional activity. So, the more you advertise and detail, the more you are shooting yourself in the foot and the less efficient is your marketing.

I realize that this is going to take a huge amount of boldness and vision — an entirely new mindset. There are a lot of turfs that will be shaken up and vigorously defended. It will probably be tried first by a small to middle size David going up against a Goliath. But it might be a large firm that realizes that the old ways of promoting pharmaceutical products are dying, or whose sales force is stretched too thin.

I welcome the opportunity to sit down with you to discuss more of the details. I’m eager to work with a company that has the right kind of drug and is ready to make the right kind of commitment at the highest level, since that’s the only way it will work. I look forward to putting our heads together soon.

Cordially,

George Silverman,
President,
Market Navigation, Inc.

How to Harness Word of Mouth — Guide to Peer Selling

August 10, 2009 |  by  |  Word-of-Mouth Marketing  |  No Comments

 

Word of mouth is the most powerful force in the marketplace. Yet there was almost no useful literature on the subject until 2001. It was almost totally neglected, primarily because people thought that they could do nothing about it. The following article appeared in my newsletter The Market Navigator in 1991. It has some fundamental and non-obvious insights into why word of mouth is so powerful and how to harness that power.

Peer Influence Groups

There has been a great deal of controversy around so-called Peer Selling Groups or Peer Influence Groups ever since Ron Richards and I co-invented them over twenty five years ago. Lately, the controversy has heated up in the pharmaceutical industry, where they are most widely used. Their existence has become threatened by a ban, by the AMA and the Pharmaceutical Manufacturer’s Association, on paying gratuities to physicians for participating in educational activities. The payment of these honoraria is regarded as a bribe. For those of you in the pharmaceutical industry reading this article, I’m going to offer a proven solution to the problem later on in this article. I’ll whet your appetite by saying that I have never paid an honorarium to a participant in a Peer Word of Mouth group (as I call them) in more than 25 years and thousands of sessions.

It might shock you to know that Peer Selling Groups have become the largest single promotional item in many products’ budgets, particularly in the pharmaceutical industry, in some cases exceeding the money spent on salespeople, advertising, direct mail and sampling combined. They have also been measured to be the most effective selling method for many products ­ more effective than salespeople, advertising, direct mail and sampling. It’s clear that peer selling groups are a major addition to the marketing mix, and are here to stay, because they increase sales, cost-effectively. I might also add that, when done right, they are the most professional, honest and persuasive means of communicating with high level people such as physicians, executives and other accomplished people.

I am both gratified and dismayed at their success. I feel vindicated after all the years I spent trying to convince people that they work. But I am dismayed that peer selling groups are not well understood, and there are some sleazy and unprofessional approaches to them that reflect badly on me as one of the people known to be their inventor.

The time has come to clarify what Peer Word of Mouth Groups are, what they can and can’t do for you, and how to use them most effectively. I’d like to start with a description of some of the marketing problems that you have, and show you how Peer Word of Mouth Groups can solve them. Then I’ll describe how to set them up most effectively, well within ethical guidelines.

What’s at the root of all marketing problems

In order to be persuasive, information must:

  • Come from the right source.
  • Be presented in the right order
  • Be relevant to the particular customer
  • Be credible
  • Be presented in a context in which the customer is receptive.

However, even the right information presented in the right way is often still not enough. Past a certain point, you begin to spin your wheels.

Why?

Once people have heard of your product and its claims (information), they need confirmation and verification — Confirmation from independent sources that the claims are valid, and verification that the product will do the job it promises to do in their particular situation.

The product adoption cycle has two major phases, and you are probably only covering the first phase:

(1) The Information Phase (Awareness and Interest). First there is the learning phase in which information is gathered. This is where the customer considers whether he is interested in the product, what benefits it may have to him, whether it is worth finding out more. The major mental set is: "If the claims are true, would I want it?" This is the phase that marketers address most of the time, to the almost total neglect of the second phase.

(2) The Verification Phase (Trial, Evaluation and Adoption). In the second phase, the customer is trying to find out if the claims are true. The conventional kind of information that marketers try to provide is almost totally irrelevant to this phase.

Why?

The fundamental contradiction in marketing

Prospects already have most of the information. They need verification, which they think they can’t get from you, because you are not objective.

They need verification from an objective source.

In their attempts to verify the truth, information must be perceived to be objective in order to be believed.

But most marketing is advocacy.

Advocacy is not perceived to be objective.

Therefore, most marketing is not viewed as objective.

Therefore, most marketing is not believed.

What do I mean by objectivity?

Accurate, complete and clear presentation of the relevant facts and conclusions. In other words, an unbiased evaluation of the advantages, disadvantages and value of the products.

It’s not that they don’t believe that what you are saying is true. In some industries, such as the pharmaceutical industry, there are severe penalties for giving inaccurate information and for lies of omission. There are many ways to slant the truth. It can happen unintentionally and from the most noble motives of enthusiasm for your product and a desire for people to reap its benefits. Everyone realizes this. Most people would no more take at face value a manufacturer’s evaluation of his own product than they would leave a fox to watch the chicken coop.

There are several ways that people try to get the objective information they need. They are:

1. Direct experience with the product

2. Experience of peers who are like themselves

3. Experts’ experience

4. Scientific journals, studies, panels

5. Independent rating and opinion services

e.g., Facts & Comparisons, The Medical Letter, Consumer reports, Infoworld, PC magazine, Dataworld.

So the necessary objectivity is only provided by something that delivers independent experience and evaluation.

Let’s recap:

You need to get your prospects beyond information gathering…

to confirmation and verification…

which customers get by objective, independent experience and evaluation…

which conventional marketing does not deliver.

 

So, what keeps most stalled superior products from reaching full market share is not the time it takes people to find out about your product, but the inordinate amount of time it takes the decision makers to get the independent experience to confirm and verify the truth of what you are saying.

So, people are caught in a dilemma. A physician, for instance, will not get experience with a drug unless he has confidence in it, but he can’t get confidence in it unless he has experience with it.

If what holds products back is the time it takes to get experience, the problem becomes how to accelerate that experience-gathering.

How to accelerate experience-gathering

Basically, there are only two ways for your customers to get experience: directly or indirectly (vicariously).

The traditional ways of accelerating the accumulation of direct experience are: demonstrations and free trial

These methods can be extremely effective, as every marketer knows. They are powerful because they provide experience, which can conclusively provide the verification and confirmation that people need to make a decision. But demos and trial also have several disadvantages. Demonstrations are not always possible. For instance, there may not be anything to see in a demo, as in the case of some drugs. Even when the product can be demonstrated, the demo is often inconclusive. Conditions are often artificial, as at trade shows and dealers, so the decision maker does not know whether the product will work the same way in the real world. The demonstrator may have more skill than the customer. From the point of view of the marketer, there is little control over the demonstrator, who may be a dealer or a rep who is not as skilled or motivated as you would like.

Free trial (sampling, equipment loans, etc.), as powerful as they can be, also has its own set of difficulties. There are many things that are impossible or difficult to try or sample: Life insurance, a new surgical procedure, other all-or-nothing major commitments. Often, products that one would think are easy to try, such as new prescription drugs, involve a large perceived risk, or innate caution and conservatism, which make people like physicians and pharmacists want to wait, even when you give samples.

Often, demos and trials tend to make the customer want to try other products as well, increasing the time it takes for a commitment.

In an effort to reduce the risks inherent in direct experience gathering, such as directly trying the product, and also in an effort to broaden the experience to a wider sample, customers and prospects often go to indirect experience gathering. They will seek the opinions of experts, ask their peers and consult independent, respected rating services. They will use the various forms of word of mouth.

Most marketers agree that Word of Mouth is the most powerful force in the marketplace. The conventional explanation is that it is more credible. That’s true as far as it goes. The rest of the story is that it indirectly supplies the independent experience that is necessary for confirmation and verification, which in turn is necessary for opinion change, which is necessary for behavior change.

To summarize, the flow goes like this:

Indirect trial (word of mouth) and direct trial Independent and Direct Experience Objective information Confirmation/verification of your claims/promises Belief/opinion change (persuasion) Action/behavior (motivation).

The problem with indirect experience gathering from your point of view as the marketer is that it is out of your control. In fact, that’s precisely why word of mouth is so valued by the decision maker. Word of mouth is independent of the seller, and so it’s more objective. This is where prospects feel that they can get the real story. Under most circumstances, as soon as you try to control it, it loses its independence and its credibility.

Like a forest fire, Word of Mouth is smoldering, burning or blazing along on its own, the most powerful force in the marketplace, out of your control. You never know when it might strike, or what good or damage it may do. You usually do not know if it’s there, or what form it’s taking, or whether it’s doing good or harm. But word of mouth can be harnessed.

Why conventional promotional media lose effectiveness

Many products are at a point where they just won’t respond cost-effectively to conventional marketing methods. This can happen anywhere from before the product launch to years into the product life cycle.

With some products, it becomes evident before launch that it is too complex for your salespeople, ads, or other conventional selling media to be effective.

Even after a product has been out for a while, you can keep pouring more and more money into conventional media, without much visible result. You can change your ad campaign, media mix, sales message, sales aids, brochures. You may even go to alternative media, such as experts’ endorsements, symposia, sampling, free trials, demonstrations. You keep thinking you haven’t found the right message, or the right way to present it.

You probably have awareness and interest, but little trial and adoption. The only thing that people are adopting is a wait-and-see attitude.

In this day and age, the problem rarely is getting the information about the benefits of your product across to your potential customers. That’s easy. It just takes money for enough salespeople, ads, mailings or PR. But you quickly reach diminishing returns, where throwing more money at the problem produces little result.

Creating interest in your product isn’t so hard either: all it takes is the promise of something different about your product that might actually make a difference to your customer.

Serious trial, evaluation, adoption and expansion of use are other matters entirely. These latter stages of decision making are hellishly difficult to move people through. Conventional marketing methods are relatively ineffective during these stages of decision making. This is where most products are stuck.

Why are conventional methods ineffective in the latter stages of adoption?

Because conventional marketing methods are mostly directed at getting across information: the features, claims and benefits of your product. But information is not enough. The information must:

How we Harnessed Word of Mouth

Word of Mouth has been tamed and made manageable. It’s worth looking at how Ron Richards and I did it because there are some instructive lessons to be learned.

Soon after I invented the telephone focus group, I started mixing together physicians who were using a product successfully with people who were not using it. The latter were often skeptics, laggards, triers who hadn’t adopted, or even ex-users. The reason for this research design (see my article Persuasion Design Laboratories), which I still use today, is to see how physicians who are adopters of a product will attempt to convince their less enthusiastic peers. Their wording, logic and sequencing can then be used in promotional materials. We noticed an amazing thing, as a byproduct of the research: Even when the adopters were vastly outnumbered, they almost always convinced a significant number of the non-adopters to try, or re-try, the product. Even one or two would convince ten or twelve! We followed up and found that the physicians had in fact tried the product and usually had changed their subsequent prescribing.

Most people have noticed this phenomenon in focus groups, and much has been written about it, mostly in the form of criticism of the focus group technique ­ the old "one person can sway a group" criticism. We viewed this as a finding rather than a bias. When the group is swayed, it’s either an opportunity or a threat, you want to know why and how it was done, so that it can be duplicated or defended against.

We kept looking at this group persuasion phenomenon and discovered additional things. It only happened under certain circumstances, and it was virtually always one way: adopters, no matter how few, convinced non-adopters, no matter how many. There was an extraordinary amount of constructive, respectful experience sharing going on, rather than abstract discussion, disagreement or debate. It was as if the non-adopters wanted to be convinced.

We knew that there was a powerful force at work. We quickly rejected the idea that it was "peer pressure," because then the majority would sway the minority. This force was working despite peer pressure.

Ron Richards had a background in sales and was interested in group selling. I came from a background in psychology and was interested in peer learning, problem solving and decision making. In one of our discussions late into the night, we realized that group selling and peer learning were different sides of the same coin. Only this was group selling without a salesperson! People were in an open situation in which they were free to learn from their peers, uninfluenced by outside forces. Since it is very difficult to argue with success, even one successful person would sway a whole group! The main difference between what we were doing and ordinary word of mouth was that we had caused it to happen. We had harnessed word of mouth.

Other differences

There were other differences between what we were doing and ordinary word of mouth. The moderator, while not injecting information and not exerting influence, could bring up important points that the participants might have left unexamined, or turn the conversation to a more constructive direction by asking for solutions to problems. If the moderator at any time lost objectivity and took an advocacy position, the entire atmosphere of the group was poisoned and the objective examination and experience sharing stopped.

Of course, marketing research ethics precluded us from conducting large numbers of focus groups which had as their primary purpose directly increasing the sales of our clients’ products. We went to Roche, from whose focus groups we had developed many of our insights, and explained the situation to them. We proposed a very simple solution: tell the complete truth. We would invite physicians to groups in which no reference to marketing research was made. The sessions would be described as exactly what they were: open discussions in which physicians could discuss the drug in question with other physicians who had had success with it. Roche agreed to fund a large number of telephone conference sessions on Laradopa, their brand of L-dopa, an anti-Parkinson’s Disease drug which was a very difficult product. On introduction, its sales had skyrocketed, only to disappoint because of many side effects. Sales tumbled. The difficulty in using it was to adjust the dosage between the symptoms of the disease, which would appear when not enough of the drug was given, and the side effects of the drug when too much was given. In fact, for most patients, there was a mixture of symptoms and side effects. Many physicians had tried it and dropped it because of their frustrations in trying to use it. We scheduled many telephone conference sessions, each with about 8 primary care physicians who treated large numbers of Parkinson’s patients but did not use L-dopa, a couple who did, and a neurologist who knew how to use it. Sales tripled almost immediately. It was clear that the changed prescribing was due to our sessions. This was the first use of Peer Word of Mouth Sessions.

Word of Mouth is now a "medium"

We realized that we had turned word of mouth from an out-of-control force into a promotional medium, something that could be included in the promotional mix: It was budgetable, deliverable on a schedule, predictable. In a lot of ways, it was more measurable than other media. Because it was done by telephone conference, we could reach people without the limits of geography, and include experts from anywhere without making them travel.

We also realized that we had invented something that is not just another promotional gimmick. It is as basic as salespeople, advertising, and sales promotion. Each major element of the promotional mix delivers something that you and your customers need in order to make the decision. The basic need that advertising meets is the need to reach large numbers of people efficiently. Salespeople deliver custom made messages interactively. Peer word of mouth sessions deliver experience needed for verification and confirmation objectively.

In the last decade, "Peer Influence" or "Peer Selling" groups have grown enormously. But most of them are done face to face, in the mistaken belief that physicians prefer them that way. Surveys and inviting tests show that, in fact, physicians accept and show up to telephone sessions more than to face to face sessions, provided that certain conditions are met, which I will go into later. In case there is any question about what physicians like better, you have only to look into the honorarium issue. As I stated earlier, I have never paid an honorarium to a non-expert participant in a telephone Word of Mouth Session. I only pay experts, and even that is a very small honorarium. So, the solution to the "honorarium problem," is to design telephone sessions that do not need honoraria.

I have found in twenty years of doing these sessions, that the key is building in and communicating the educational value of the sessions. My attitude has always been, "why should I pay a physician, or other participant, to participate in an educationally valuable session, which is being given to him/her without charge and with great convenience, by phone ­ a session in which the physician can learn from an expert and/or peers, and can broaden his or her experience?"

I’m sorry to say that peer word of mouth, now that it has been harnessed, has been abused in many ways. Sometimes, the sessions are purely promotional in nature, with no fair balance, and biased information. Sometimes, physicians are misled into participating in sessions they think are marketing research groups. Usually, at best, the sessions have not been carefully designed to come from both an educational and marketing point of view.

Over the years, I have learned how to structure discussions which would bring out the best of our clients’ products. I have learned that there is no conflict between the responsible marketing goals of our clients and the educational goals of our participants.

How do you structure the best programs? Very carefully. I find out, through client discussions and focus groups, what the participants need to learn in order to decide to use the product, and use it most effectively. I then ask, how will they best learn these things. You can’t just tell them, because telling is not teaching, and teaching is not learning. I then design and structure a customer driven program (in this case the participants as much as the clients are the customers).

Basically, I figure out what the participants need to learn, in what sequence, from what sources and in what form. Sometimes, we design study materials for review before the sessions, sometimes the sessions have to contain experts, sometimes only peers, sometimes there is a need for a follow up session. Much of this is governed by keeping in mind the basic function of word of mouth: the spread of experience. Particular attention has to be paid to what experience has to be shared, and what will be the most efficient and meaningful way to do this. Sessions for different types of people have to be built in, with flexible, but well thought out agendas.

What actually goes on in the sessions?

Usually, there are about 10 people, all participating from their own unmodified telephones, at home in the evening, from all across the country. The sessions take place over a custom built telephone conference system which has been specially constructed to meet the needs of this type of conferencing and which allows us complete control of the process. The sessions are extremely informal, with participation in the form of questions and discussion. Often we poll the group to find out what topics, questions, issues or concerns were the most important to them. Then the guest expert talks for a few minutes to give general background, then answers the questions brought up in the beginning of the session, then specific cases are discussed. Sessions usually last an hour, but an hour on the phone is equivalent to at least an hour and a half face to face.

The sessions are tested and tuned, so that they are appealing, informative and help the participants translate information into decisions and decisions into action. Then, and only then, should the client commit to hundreds of sessions.

The point I’m trying to make here is that there is no set formula. You have to know what you are doing. Each product is different, each program is different, each session is different and each participant is different. So, session and program design are of paramount importance. I have seen programs which have wonderful educational value, but which did not further the marketing objectives because they did not address the critical thing people need to learn in order to remove the block that is holding them back from using the product. I have seen self-serving programs which met the marketing objectives perfectly, except that no one wanted to come to them, or they were so transparently self-serving and promotional that people were offended. Just as you can’t throw "selling points" on a page and have an effective ad, and just as you can’t recite benefits to a person and have an effective sales call, you can’t throw together groups and have cost effective peer word of mouth sessions.

It is a tribute to the power of word of mouth that even some of the worst programs have caused measurable sales increases. Unfortunately, many of these increases were not lasting. In contrast, a well-designed program in which important things are learned has lasting effects that are superseded only when a better product comes along.

How to design more powerful programs

I’ve already given you many of my trade secrets. Since I believe that the more I tell you, even though competitors will eventually get the material, the more likely you are to realize the kind of substance there is behind my programs and the more likely you are to come to me. After all, many people have written books on how to write a great ad, to the benefit of their competing advertising colleagues, only to have people say, "That’s the guy I want writing my ads."

The Power of Follow-up Sessions

So here goes. The most important next step after the development of the Telephone Peer Word Of Mouth Session was the Follow Up Session. I realized that participants learned a lot in sessions, but there was no follow up to their learning. They had no way to put their experiences in context, to correct mistakes, to explore other issues. Programs offering participants one session were effective, but I wondered what would happen if participants were offered the opportunity to apply their experience and come back to a follow up session. Remember, the major function of word of mouth is broadening one’s base of experience. After the initial session, there was experience going on that wasn’t shared. Might the whole thing cause more than twice as many sales with two sessions, one following up the experience gained after the first session?

I tried to get a couple of clients to let me test the concept. Two refused, saying that physicians would think it too self-serving on the part of the pharmaceutical company, and joking that it was pretty self serving on my part also. Finally, someone let me test it. I struggled with how to get physicians to come back to a follow-up session. Every wording sounded blatantly manipulative and not of benefit to the physician. Then I realized once again the power of customer driven marketing, in this case the physician being the customer. I asked myself, "What’s in it for him or her?"

Then I got excited. I realized that this was a wonderful opportunity for the physician. In the very next group I ran, I pointed out to the physicians that some of them obviously would be starting to use the drug on some patients. But they would have trouble interpreting their results. So, the sponsor was willing to offer the following opportunity: If they each put 5-15 patients on the drug in the next few weeks, and then came back to a follow-up session, they would have 50-150 patients to compare. While it wouldn’t be a double-blind crossover clinical study, it would be better than trying the drug in isolation and trying to interpret the results. We could discuss therapeutic efficacy, and short term side effects. It could probably compress a couple of years of cautious trying into a few weeks or months of equally conservative trial. I made it clear that if they did not try the drug, they were still welcome to come back to ask questions of the others. Then I pulled the headphones away from my ears, expecting to be blasted for such an obviously self-serving suggestion. As you probably guessed by now, they loved the idea! I even asked whether they thought this was self-serving on the part of the pharmaceutical firm. They said that of course it was, but as long as we did not exclude negative comments in the session, they thought that there was no conflict between their interests, the company’s interests and the patients’ interests. I then asked them to estimate how many patients they thought they would be putting on the drug, explaining that their answer was not a commitment, but that it would be helpful to know, so that we could mix people who had a lot of experience with people who had not tried the drug. Most were quite willing to estimate. The number was severalfold higher than the usual first trials. Neither the client nor I believed the numbers. We got the same results in a dozen more groups. We waited an uneasy several weeks. Over half the physicians came back to the follow up sessions. That was a disappointment that I’ll address later. But amazingly, the participants had put only 10-20% less patients on the drug than their original amazingly high estimates. In this case, the client made back multiples more money on the trial between the sessions than he had paid for the entire program. In addition, since the drug performed as promised, they decided to adopt the drug without further dragging their heels. Most said that this was the best, most responsible way to introduce and evaluate a new drug into their practices. Sales jumped.

Now, what about those who didn’t attend the follow up sessions? Did they, after the enthusiasm of the moment, decide that they had been "had"? Did they not like the initial session? Were they dissatisfied in some other ways? I was worried. I knew I didn’t have a business if I was antagonizing half the physicians I was talking with. So we called them to ask why they did not come back to the follow-up session. Less than 1% expressed dissatisfaction. Most said that they had tried the drug just as they had said they would, but that they had such good results that they decided to use it regularly, and didn’t want to spend another hour pooling experiences to make a decision that they had already made! We subsequently compared increases in sales of participants who participate in an initial session only to those who have participated in the two sessions. Over the years, two-session participants have brought in a 10 fold return on investment, while one session participants have brought in three fold ­ not bad, but obviously people who think they are already sold still could use the extra confidence that hearing about the success of their peers inspires.

Why Telephone is Better

A few more points about doing these groups by telephone. Telephone groups stand or fall only by their educational value to the participants and their marketing value to the company. As you probably know from my other writing and speeches, there is no conflict between the two. Marketing is the practice of providing valuable transactions. One of the most valuable things you can do in support of your product is to provide valuable customer education which will make the decision easier and the product more effective.

On the other hand, face to face meetings involve travel to and from the meeting site. Even local meetings require a significant commitment of time. Honoraria of some kind must be paid. Where meetings take place in an exotic location, with the company picking up the tab, the travel and lodging constitute the honorarium. They are widely viewed as constituting a bribe. Since these are no longer allowed, I predict that a variety of schemes will emerge to get around this prohibition. But remember that any incentives other than genuine educational value send the wrong message: that the program needs an incentive either because it doesn’t have the educational value or the objectivity to make you want to spend the time. Do you want your programs imbedded in this context?

In addition, face-to-face groups have the same physicians coming to them time after time, for the honorarium, the meal, the trip, or the social contact. The mix sure changes when the incentive is purely educational! You reach physicians who really want to learn something. Over the phone, that’s all they get.

What’s more, face to face groups are much more expensive. I can do initial sessions with an expert, plus a follow up session for a lower price per physician than one initial face to face group.

How to move the "late adopters"

I discovered that people who characterize themselves as late adopters or even laggards are often among the first to try a product when they have the support of this kind of a system. Often people are slow to adopt because it is their personal policy to wait to see what others’ experience is. When they are offered the chance to try under conditions of low risk with a high potential for being able to evaluate their trial in the context of others’ experience, they frequently jump at the chance. So it is naïve to pigeonhole people as innovators, early adopters, middle majority, late adopters and laggards. They often adopt with different speeds in different circumstances in different product categories. If you know how to create the right conditions which give people the right support, you can get people who would ordinarily have taken 3-5 years to adopt a product, to adopt it in a matter of a few weeks or months.

The power of experts

Another thing I discovered was the power of live experts. I had originally thought that pure experience sharing among peers was best, and for some programs they are. I found that often when experts are introduced, the more typical participants clam up. So we often included experts via tape recorded excerpts, so that the participants would feel free to share their experiences without fear that an expert would tell them that they were wrong. I have discovered many techniques in the last few years, however, to include the power of live experts while getting physicians to express some of the uncertainties that they are ordinarily reluctant to express. Of course, in addition to these moderating techniques, the fact that participants are on the telephone helps, since they are in different cities and are not as concerned about preserving local reputations.

The two step function of experience: I’ve found that there is a two step process in experience gathering via word of mouth. First people want to know what the upside potential of the drug is. They speak of this as its "promise." Here, they look toward the company to make the claim, or promise, and the expert to confirm this upside potential. But that is not enough for a decision because the endorsement of the expert only says to the decision maker that under ideal conditions, in an expert’s hands, the claims are true. Next, the decision maker still has to decide if the promise will be fulfilled in the real world, the more typical world, of his practice. That can only be done by hearing peers on one’s own level, or by direct experience. This process usually takes years to go from initial interest to trial to adoption because it takes an inordinate amount of time to talk to so many people to gather their experiences.

The following flow can compress a many-year process into a few weeks or months: An initial session with an expert, with organized trial after the session, with another session containing an expert to put experience into context and give practical tips and suggestions. That’s how to accelerate the experience gathering and evaluation that people need to adopt your product.

If all this sounds too good to be true, it might be. This kind of approach, in contrast to the promotional "sit them down and make them listen to a sales pitch" approach, only works with products that can benefit from objective scrutiny, but when it works it is the most spectacular, honest, responsible and lasting means of increasing sales you ever saw! If you have a product that fits, you may be able to cut your advertising, sales time and everything else to the bare minimum, or cut them out entirely.

Candidly, I’m very worried about the future of this medium. Experience has already shown that there have been abuses, just as there have been abuses of other media. However, peer word of mouth sessions are in some ways more subject to abuse. No one expects a salesperson, or an ad, or a brochure to be objective. After all, they are advocacy sources. That’s why word of mouth is needed, to give fair balance. So, anything that compromises fair balance and objectivity strikes at the heart of what people are looking for and will backfire in peer word of mouth sessions. It is very easy to lose objectivity, to play down one issue and emphasize another. The moderator can forget his or her role as the guardian of fair balance, openness and thorough examination of the evidence. The expert can become overenthusiastic. The moderator or someone else can give a sales pitch. There are many ways to lose the sense of being a disinterested party, and all of them hurt the program, the product, the medium, and all of them ultimately backfire. All of them make it less likely that the person will participate in the future.

I’m very proud to say that physicians continually want to come back to our sessions, and our acceptance rates keep going up. We continually get letters praising our programs, and many physicians say that our sessions are the best way for them to evaluate new drugs and that they should be offered with every new drug introduction where the manufacturer really believes that the new drug offers real advantages. Recently, a particularly candid salesperson for one of my clients’ products said after talking with physicians who had participated, "More real selling gets done in one hour in your sessions than any salesperson can do in a year."

The most amazing example of the attractiveness of our sessions occurred 45 minutes after the 6:45 PM EST start of the air war against Iraq. The whole nation was waiting anxiously for this event. We had a session scheduled with physicians for 7:30. When we placed reminder calls to them 20 minutes before the session, every physician had heard the news and was tuned into the news media. We told them that we would be glad to reschedule the conference, and would get them all on the line to see what they would like to do. A couple of them asked to be rescheduled, but 10 agreed to get on the line at the time of the conference to decide what to do. When we convened the conference, I said that we would certainly understand it if they preferred to run back to their TV sets and do the conference at another time, but that we were prepared to conduct the conference if they wanted to, with one of my staff members breaking in with bulletins. They said that one hour would not make any difference, especially in a situation that they could do nothing about, so they might as well learn something useful. We ran the session. It was one of the best sessions I have ever heard, with everyone participating actively. After the session, we found out that the guest expert had a sister in Israel and was extremely anxious about the threatened chemical warfare attack.

Fortunately, the medium is also robust. It is live, so if the moderator, an expert, or even another participant loses objectivity, the other participants usually bring them back on track.

Still, I worry that some people will copy the superficial aspects of this medium ­ group discussion of a product ­ without understanding its underlying workings, and thereby turn off many people who could benefit from participating, and denying the process to many products which could benefit.

Identifying the products that could benefit

There are a whole host of marketing situations that don’t respond well to conventional approaches, no matter how creative. These can usually benefit from Peer Word of Mouth Sessions:

Credibility problems:

If people don’t believe your claims, they usually don’t believe your evidence either. Here, there is no substitute for independent corroboration.

Most breakthroughs (except to announce them, which are best done by ads):

Breakthroughs require departures from present thinking and practice. Most people (except innovators, who studies show aren’t influential, it’s the early adopters who are) wait for everyone else to validate them.

Marginal improvements (where it’s not worth going to something new for only a little improvement):

Here, peers can show that the little differences make a difference in a practical way.

Where the product has to be tried in large numbers or over time:

The process can often be accelerated by Word of Mouth Sessions

Where there is high risk in trying the product:

The risk can often be reduced, shared or put into perspective by talking with peers.

Older or mature products that have a new story which people don’t want to listen to:

Again, peer discussion can get people to take a new view.

Unfair competitive practices, such as spreading rumors, telling lies about your product, etc.:

This is uncontrolled word of mouth at its worst. The right combination of experts and peers can set the record straight.

Governmental or other restrictions on what you may say or claim:

This is a particularly sensitive issue in the pharmaceutical industry, so I’d like to spend some time on it. Companies are restricted from promoting the use of products in any way that differs from the Package Insert, otherwise called the "Full Prescribing Information." They may not talk about other conditions, dosages, frequencies, forms, ways of administering, or anything else that is not in the PI. Direct communications from pharmaceutical firms are considered to be part of the labeling of the product. Anything that is "out of labeling" can, and does, cause the FDA to inflict severe direct and indirect penalties.

While this makes sense on the face of it, in reality there is a severe problem. The medical literature is full of useful information about using drugs in ways that have not been officially approved. Often the approval will never come, because a way of using a drug is found to be so superior that it is unethical to do a study withholding the treatment from the control group. Yet, the approval can only come on the basis of a scientific study.

How can this information be gotten across in a responsible way? The FDA recognizes that they cannot restrict physicians from using approved drugs in unapproved ways, because that would be telling physicians how to practice medicine and there are many situations in which these uses are highly desirable. They also recognize that they cannot interfere in medical communication, i.e. physician to physician information flow. So, companies are allowed to sponsor, fund, or underwrite in the form of grants, medical seminars in which independent experts comment and clarify issues, including non-approved indications and other issues outside of approved labeling.

Peer Word of Mouth sessions, especially those containing experts, fall well within the letter and the spirit of the law. The idea of all the restrictions is to keep companies from presenting one-sided, biased, distorted and unverified information. We make sure that our experts present all sides, and clearly characterize their comments as speculative, or probable but not yet proved, proven beyond dispute, etc. When a non-approved issue is brought up, the moderator or the expert is scrupulous in telling the participants that the use is outside of officially approved labeling. They are still allowed to discuss it, but only in this context of full disclosure. We insist with our clients, and it is written into our contract, that we, together with the experts, will exercise editorial integrity and cover the ground objectively. Experts are instructed to emphasize the negatives as well as the positives of our clients’ products as well as all others discussed. Our moderators remain strictly neutral and are not allowed to disseminate medical information.

It should be stressed that the way we handle non-approved uses is not a way of getting around the law. It is a way of complying with it.

Products not to use peer word of mouth sessions for:

 

"Me-too" products where a seminar would not add meaningful added value;

Products that can’t be tried and where there is no consensus among experts;

Products that are clearly inferior, without having a compensating superiority for a particular application;

Products which are so much a matter of personal taste and or emotion that rational discussion is irrelevant to the decision.

Products where the decision value is so small (low price + low volume) that the medium will not be cost effective. On the other hand high price/low volume or low price/high volume are often ideal. The principle here is that there has to be enough value in the decision to adopt to justify what the program will cost.

I would be happy to talk with you about whether your product is suitable for Peer Word of Mouth Sessions and show you how to calculate whether the sessions are likely to produce a sufficient return on your investment. If your product looks suitable, my approach is to structure a small pilot program to prove feasibility and effectiveness, before moving to the full scale program.

How to Harness Word of Mouth

August 10, 2009 |  by  |  Word-of-Mouth Marketing  |  No Comments

By George Silverman
President, Market Navigation, Inc.

 

Note: This article was written in the early 1990's, over a decade before I wrote first edition of my book, The Secrets of Word-of-Mouth Marketing. It was pretty prophetic. It's included here not only for its historical interest, but because it still remains a pretty good summary of word-of-mouth marketing.

Marketers are overlooking the obvious. Word of mouth is far and away the most powerful force in the marketplace. Yet, it is the most neglected. Companies have vice presidents of sales, advertising, and marketing. But there is not a single vice president of word of mouth in any corporation in the country. Why? [Note: there are now some people with titles pretty close!]

Presumably, because most people think that they cannot do much about word of mouth. Most marketers believe that word of mouth is out of their control. They believe that it can be influenced, to be sure, by advertising and other marketing media, but cannot be influenced directly.

The obvious thing that they are overlooking is that word of mouth can be harnessed. It can be directly influenced, causing — under the right circumstances — a stampede of customers to your products that cannot be stopped by your competitors.

Chances are, your product is more influenced by word of mouth than anything else. You and your competitors put huge amounts of information into the marketplace in the form of marketing materials, events, and salespeople. The illusion is that these things directly influence sales. The reality is that all the while, your customers are talking over that information and helping each other decide what to do. Word of mouth is the reality that intervenes between your communication and sales.

Word of mouth is more credible than your most sincere salesperson. It is able to reach more people, faster, then advertising, direct-mail, and even the Internet, because it can spread like wildfire. It breaks through the clutter better than anything:

“Even those deaf to the bragging cries of the marketplace will listen to a friend,” as one highly successful marketer put it.

Even more important than its credibility, reach, speed and ability to break through the clutter, is its ability to get people to act. In study after study, with almost every category of buyer, word of mouth has been shown to be what is known as the proximal cause of purchase — the most recent thing that happened just before purchase. In other words, the purchase trigger.

People tend to make purchases on the advice of trusted peers or experts.

Even more amazingly, word of mouth happens spontaneously, without you having to be there, and, unlike your other media, it doesn’t cost you a dime.

If you could only harness it..

How to harness word of mouth

The idea that word of mouth cannot be controlled as one of the biggest marketing oversights. It will surprise most marketers to find out that word of mouth can be controlled at least as much as advertising, salespeople, public relations, coupons, samples, promotions, and other marketing media and tactics. (Most things in life cannot be completely controlled!)

So how then do we harness word of mouth?

First, there is a lot more about this strange and powerful force than is generally understood about it. We have to know the nature of the beast before there is any chance of taming it, harnessing it, and directing its power. Then we have to have a way to monitor and track it, to sneak up on it and observe it. Then, and only then, can we learn how to speed up, change its direction, and turn it into a stampede toward our product.

Stalking the beast: what is this strange creature?

Word of mouth is one of those things that everybody thinks they understand, yet realize soon that they are talking about a different part of the elephant.

By “word of mouth” I mean informal communications about products, services or ideas between people who are independent of the company providing the product or service, in a medium independent of the company.

In contrast, advertising is a communication of a message that you originate, in a medium that you own or rent. A sales message is a “company line” delivered by representative of the company. Word of mouth is originated by a third party, transmitted spontaneously in a way that is somehow independent of the party being talked about. So in word of mouth, both the message and a medium are independent. In that sense, public relations is actually one form – by no means the only form – of word of mouth.

What makes word of mouth so powerful?

It is this independence that gives it much—though, as we will see later, by no means all—of its power. If you ask most people why word of mouth is so powerful, they will tell you that it is because of its objective, independent, “no axe to grind” nature. Why is that so important? Because a decision maker is more likely to get the whole, undistorted truth from an independent third party then someone who has a vested interest in promoting your point of view. It is this unique credibility that gives word of mouth much of its power.

That explains why word of mouth is often negative. It is the only place where the decision maker is likely to hear about the negatives of the product. So when people ask someone about a product, they are likely to ask, “Had any trouble with X?” Because they know that it is the only source of information where they are likely to get a straight answer.

Another reason that word of mouth is so often negative is that people are three to ten times more likely to tell others about a negative experience than a positive one. Many studies have shown that a satisfied customer is likely to tell approximately three people, while a dissatisfied customer is likely to tell approximately 11 people. This is because the positive experiences are expected and soon forgotten, but the unresolved negatives get people angry and frustrated, energizing word of mouth. Studies have also shown that unexpected extraordinary service also causes strong positive word of mouth. In fact, some of the strongest and most frequent word of mouth results when a dissatisfied customer is turned around by an extraordinary response to their expression of dissatisfaction.

So, as we have seen, word of mouth can be a positive force because of its credibility, but often destructive because of its negativity.

The unknown reason why word of mouth is so powerful

But there is another reason why word of mouth so powerful. This reason is even more important and useful than word of mouth’s independent credibility. It takes some explanation.

When the person is deliberating about purchasing a product, he reaches a point where he wants to try the product. Why? He wants to get real world, but low risk, experience in his situation. Up until then, everything is informal, abstract, somewhat removed from the real world. He has to know how the product “will actually work out in the real world.” He needs experience.

There are only two ways to get experience: directly or indirectly. Now you would think that direct experience—actually trying the product—is the best teacher. But it is the most costly in time, money, and risk of failure. Also, you cannot afford the time and money to try a new product directly too much, so your sample tends to be small.

Indirect experience—that is, hearing about other people’s experience—is actually much better in many ways: someone else is footing the bill and spending the time. You can pool the experiences of several people so as to have a greater sample. If the trial fizzles, their reputations are damaged, not yours.

All in all, indirect, vicarious experience is the better deal. Of course, it is not an either/or situation. You might try the product a little yourself and also talk with others.

By now, you probably see where I'm going with this. Talking with others about the product, comparing experiences and helping each other sort it out is one form of word of mouth. In fact, it is the most powerful form of this most powerful marketing force. It happens just at the point of maximum involvement, just when they are thinking about trying the product, just when they are making their crucial decisions about the product: Will it work? In my situation? Should I make a major commitment here? How should I interpret any negative experiences?

To summarize: the thing that gives word of mouth most of its power is the fact that it is an experience delivery mechanism. And it is successful experience that triggers full adoption behavior more than anything else.

Let me give you a quick example. Let us say a new drug comes out which holds considerable promise for helping to alleviate the symptoms of a disease. Physicians read the studies and talk to the salespeople from the company. That is how they know that the drug holds promise. But how do they know it will work out in actual practice? They try it on a few patients who have not responded well to existing drugs. These, of course, are the patients on whom the drug is least likely to be effective, but it is easiest to justify trial in these cases. Physicians typically try a drug on five of these refractory patients. One gets better, one stays the same, one gets worse, one has other possibly unrelated complications, and one moves to Florida. These results are uninterpretable, so he has to wait for five more low risk situations in which to try the drug. This typically goes on for years, until enough experience accumulates so that physicians can talk with each other and share success stories, tips, and suggestions for coping with problems, and other experiences that make the pool large enough for physicians to form reliable opinions. Then, and only then—after a few years have elapsed—the chain reaction reaches critical mass and explodes into enough word of mouth to cause to drug to grow rapidly into full usage, sometimes in a matter of months.

This pattern of acceptance is similar for most business-to-business, industrial, high-tech, and professional products. It is even true for many consumer products, especially those that are not easily tried. The time frame and other details may be different. But what is the same is the fact that it is the time it takes to accumulate enough favorable experience—and to communicate that experience—to make a reasonable decision is what determines a product’s success and the speed with which it is accepted. It is the content, speed, and sources of word of mouth that mediate the process and act as the accelerator or brake on the speed of adoption.

So, to summarize: speed of experience gathering determines the speed of product adoption. Word of mouth determines speed of experience gathering. Therefore, word of mouth determines speed of product adoption.

Other reasons why word of mouth is the most powerful persuader in the marketplace

There are some other reasons why word of mouth is so powerful. Even though you already know most of them, seeing them all summarized in one place will probably make you realize why word of mouth is even more powerful than most people recognize.

It is more relevant and complete. Word of mouth is “live,” not canned like most company communication. That means it is custom tailored to the people who are participating in it. People are not giving a pitch, they are responding to questions, though most important questions, the ones the decision-makers themselves are asking. Therefore, customers pay more attention to what because it is perceived as more relevant and more complete than any other form of communication.
It is the most honest medium. Because it is custom tailored, and because people are independent of the company, it is the most honest medium. And customers know it. Advertising and salespeople are notoriously biased and not fully truthful. The inherent honesty of word of mouth further adds to its credibility.

It is customer driven. Closely related to the above, word of mouth is the most customer driven of all communication channels. The customer determines who she will talk to, what she will ask, whether she will continue to listen or politely change the subject, etc.

It is a mysterious, invisible force. Despite all of its overwhelming power, like the wind of a hurricane or the neutrons of a nuclear chain reaction, it is invisible. It is sometimes called “underground” communication, or the grapevine. You see its effects all right, much more than likely it is due to your (or your competitors’) active promotional efforts. For instance, you take a bunch of actions, such as sending out a load of materials and ads launching a product. You see an effect in the marketplace. What could be more natural than to think that your action caused the effect? Actually, it is more than likely that your actions sparked a word-of-mouth chain reaction, and it was the word of mouth that caused the effects. Why should you care, as long as you get the desired effect? Because many products succeed despite the marketing supporting it, for different reasons than the product’s most-emphasized benefits. If the advertising and sales force were aligned with the word of mouth, you could have had a faster launch, at a much lower cost. It is what will go down the word of mouth channel—and be amplified by it—that should drive advertising and sales, not the other way around. This is a paradigm shift. It is the Copernican Revolution of marketing: Traditional marketing revolves around word of mouth, not the other way around.

It feeds on itself. Word of mouth is like a breeder reactor. It is self generating, it feeds on itself. It does not use up anything. If 10 people have 10 experiences, that is 100 direct experiences. If they each tell 10 people about their own experiences, that is an additional 1000 (indirect) experiences, which can be just as powerful as the direct experiences. If they each tell ten people, that is an additional 1,000 people who now have 10,000 experiences in their heads. And so on.

It does not take much time for everyone to hear about the wonders of the product, often several times each, which provides additional confirmation (“Everybody’s talking about.”).
Word of mouth is unlimited. A magazine ad, in contrast, may be seen by two or three people who read each copy. So, you have to use mass media to hit a lot of people, because it is limited to just the direct and pass-along readers. Word of mouth is unlimited. In theory, you could tell just the right fountainhead influencer, she would tell 10, who would tell 10, who would tell 10, who would tell 10, who would tell 10, who would tell 10, who would tell 10, who would tell 10. That is 100 million hits! Some topical jokes — I am thinking of some particularly tasteless O.J. Simpson and Hillary Clinton jokes — made the rounds like this (yes, actually starting from one person!) in a matter of a day or two.

It sometimes takes only one influencer to start a stampede. I call this the law of the fountainhead influencer. Of course, in real life, you would try to tell and convince dozens to hundreds of leveraged influencers, thereby increasing the chances of reaching critical mass to sustain the word of mouth chain and explosion. But more about this later.

Why are these fountainhead and leveraged influencers powerful enough to spark a chain reaction? Why don't they tell a few people about the product only to have the whole process peter out? Because they are luminaries, experts, gurus, and mavens. They each have a sphere of influence that may be worldwide, national, or local in nature. Their sphere of influence may number in the dozens up to the hundreds of millions.

These experts have one overriding attribute that gives them their influence: trust. People trust them to filter, distill, and objectively evaluate the overwhelming amount of information, make sense of it, and present it in a recommendation that is most likely to be right.

These tiers of experts and influencers tend to initiate word of mouth, sustain it, give it more credibility and supply the initial bang that can start the chain reaction of word of mouth.

For instance, I have several friends who like to discover new restaurants in the New York area. They read reviews of reviewers (one form of expert) who share their tastes, then fax my wife and I reviews of restaurants that seem to be worth trying. Often, they have already sampled the restaurant, so they can add a recommendation of their own. I know a few people who have never steered me wrong. So, when I need a restaurant in a particular area, I call them. They are my local influencers. The same with movies, novels, business books, computers, cars and so on. This phenomenon of people trying to review things and engage in word of mouth is the basis of the phenomenally popular (and wonderful) Zagat guides to restaurants and hotels. Notice the word of mouth endorsement in the previous sentence. The Zagat guides are an example of the rare phenomenon of word of mouth which is itself sold primarily by word of mouth.

Word of mouth becomes one of the product’s attributes

It is important to also notice that the recommendation by experts becomes part of the product’s attributes. Your favorite movie star or director may come out with a new movie. That is one plus. But is now it is recommended by one of your favorite reviewers, that becomes part of the product. It is now “two sums up” by Siskel and Ebert and four stars by Leonard Maltin. These endorsements and testimonials may be even more important than who is in the movie. Now, if three friends also loved it who share your tastes – especially if they have successfully recommended the movies you have liked in the past – you are going to see it. Notice that testimonials are a major part of almost all movie and book ads.

The important thing to remember here is that the “recommended by” becomes one of the product attributes, often the most important one.

Experts Like To Influence

It should be obvious by now that the source of the word of mouth is critically important. But there are some consequences of the importance of the source that are not so obvious:

One of the reasons that the initial stages of word of mouth are sustained and can be spread so rapidly is that influencers like to influence. That is one of the reasons that they are influencers. If they did not enjoy the process, they would keep their mouths shut and their keyboards still.

They like to talk with each other (and almost always report that they do not get enough of it), they like to influence non-experts, and they like to teach.

So, they are surprisingly willing and even eager to participate in the various kinds of word-of-mouth programs that I will describe later.

Word of mouth saves time and money

Another attribute of word of mouth is that it can be extremely efficient. If you want to buy a product that you do not know too much about, the best way is often to find a few people who have investigated the products, and piggyback on what they have found out.

Example: when I was looking for a supplier to put up my Website, I decided to “ask around.” The first person I asked was a friend and business colleagues who I have known for about 30 years. He has extremely high standards and is even more demanding that I am likely to be of this type of supplier. He told me that he had spent two weeks investigating Internet service suppliers. Prices were similar, but there were wide differences in service, particularly willingness to work along with customers who wanted to do things that no one had ever done before. He had found such a supplier and opened up an account. Since I was thinking about some innovative Web services, this sounded perfect for my needs. My friend warned me that the supplier had a lower level communication link that could potentially cause some bottlenecks, but recommended that I take the chance that they would upgrade soon.

To me it was a “no-brainer.” I called the supplier, verified the prices, and asked when they were going to upgrade their telephone lines. They informed me that it was about two weeks away. I signed up immediately, and had my WebSite up a few days later. They walked me through everything and could not have been better. The point here is that my friend saved me at least a few days (he had taken two weeks) of investigation. If a savvy friend with high standards thoroughly investigated and then had direct positive experience, why should I waste my time looking further? I could not go too far wrong (I can always which are my domain name to a different supplier), and I was extremely unlikely to find anyone better. Even if I could find a “better” supplier, it would only be marginally better. That would not have been worth even an extra minute of my time.

Examples of word of mouth programs and campaigns

There are ways of researching, causing, delivering, amplifying, and steering word of mouth in many different industries, with many different products, and many different kinds of people. Word of mouth works differently in every industry, but—as we will see—there are basic principles that can be modified and adapted for your industry.

Products are routinely made or destroyed by word of mouth. Some examples:

Lexus automobiles regularly conducts open houses for its customers. During a recall, the company contacted each customer individually and arranged to fix the car in the customer’s driveway or the parking lot of the customer’s business. This is an extraordinary customer satisfaction program that directly clauses word of mouth. In addition, the company sends multipage questionnaires to its customers, which not only assess customer satisfaction, but also cause customers to realize how satisfied they are.

Do you think that only a luxury, high profit car company can afford this? Then, how do explain…

Harley-Davidson conducts events around the country, often with the top executives of Harley attending, of course on their own “hogs.”

Netscape Navigator was built entirely upon word of mouth. They initially captured about 90 percent of the Web browser market before they took their first ad. They did it with a combination of giving away the first versions of their product and word of mouth, primarily on the Internet. The market was subsequently taken away from them by Internet Explorer.

Celestial Seasonings Herbal Tea: during their first years, their president, Mo Siegel, enclosed a note each box of tea with words to the effect that they are a small company that cannot afford to advertise. He asked people to tell their friends about his wonderful herbal teas or, better yet, to serve it to all their friends.

PackRat: (how word of mouth destroyed a product.) PackRat was probably the best personal information management software on the market. However, when they released their version 5, it did not work very well. Their loyal customers, many of whom were participating in a forum on CompuServe, tried to help each other through the problems, but then quickly turned against the product when many of them felt that they were not being dealt with in a straightforward manner. They started asking each other what the best product to switch to was, and most decided it was a product called Ecco. Many switched, told their friends, and PackRat was virtually dead while Ecco took off.

The Internet: probably the most important communication advance in human history—even more important than the printing press. It took off almost entirely on its own through word of mouth. No one owns it, it is no one’s product. People told people, who told people. An amazing phenomenon, especially when you think about it from the point of view of marketing. It took off with no marketing, not even a product!

Same thing with Google, Amazon, Firefox, Wikipedia, open source movement, etc.

Apple Computer: its customers became almost a cult. Apple computer is another example of companies—like Noxzema and Hershey—which did not advertise until very late in the game, and relied almost entirely upon word of mouth in the form of dealer recommendations and friends telling friends. [Added: Same with the iPod]

Laradopa: the story of L-Dopa had enough drama to inspire a film, Awakenings. No surprise then, that it stands as an extremely powerful word of mouth case study.

At its inception, Laradopa was viewed with high hopes by the medical community. It promised to remedy dopamine deficiency that was causing devastating effects in the brains of Parkinson’s disease sufferers. As with many “miracle drugs” however, there was the problematic issue of side effects.

Word of mouth threatened to tank this product before it had barely gotten off the ground: the scuttlebutt among physicians was that the side effects of L-Dopa were far worse than the symptoms it was meant to treat. Sales plummeted to one-fifth of their previous level.

Hoffman La Roche engaged me to develop a program teaching physicians how to use the drug effectively. Physicians’ negative word of mouth was revealed through focus groups. Then, group sessions with a prominent neurologist determined how physicians could learn to put L-Dopa to good use.

Through teleconferenced seminars, doctors were taught that all they needed to do was fine-tune the dosage and the promise of the drug would be fulfilled. Sales of L-Dopa jumped more than tenfold. There had been four competing manufacturers in the market, prior to my sessions. Two of them pulled their product off the market, reeling from the aftershocks of the powerful seminars.

Ocuflox: in this case, teleconferenced word-of-mouth sessions were used to transform a superior, but unheralded product, into a dominant market force.

In 1995, a new class of antibiotics was introduced for the treatment and prevention of eye infection. The first version of this antibiotic to reach the market was extremely successful. It seems that ophthalmologists were simply too comfortable with the existing drug to bother switching to Ocuflox, taking an “if it ain’t broke, don’t fix it” attitude. They had not been swayed by the improvements offered in Ocuflox.

That all changed when we implemented word-of-mouth sessions and doctors listened to four clinical investigators who explained the new frontiers in antibiotic use, and why the benefits of Ocuflox were so important. One of the more persuasive advantages was the greater penetration that Ocuflox achieves. It took the word of the mouth of respected professionals to move the doctors into action, and the product into his rightful position as the market leader.

Prilosec: Gastroenterologists were favorable towards this superior anti-ulcer and heartburn medicine. They knew it worked well, but a prominent FDA warning in the prescribing information gave them cold feet. What they needed was a positive signal from the most influential experts in the field, giving them the green light to use Prilosec.

We conducted a series of teleconferences with several of the most respected specialists in the country, together with expert clinical investigators. The information that came from these sessions convinced enough physicians to set into motion the largest sales jump in pharmaceutical history. The numbers exploded from 300 million dollars to 1.3 billion dollars.

What word of mouth can teach us about the rest of direct marketing

As you can see, I tend to approach all marketing from the perspective of word of mouth and how it can accelerate the decision process.

Let me take you on a very useful tangent for a few moments. The word of mouth orientation is just one perspective or viewpoint. There are many other places from which to view marketing, such as from the point of view of advertising, sales, promotion, etc. No particular viewpoint is more valid than any other. Orientations, viewpoints, perspectives, angles, and standpoints are just places from which to look at things from a particular perspective. On the other hand, the ideas and beliefs that come from looking at things from another angle, may be right or wrong, but the place from which you look is just that, only a place.

However, orientations differ greatly in how fruitful they are in helping us know and organize the world. Some are highly illuminating, such as “how would this look to a child, or someone who didn’t understand the field?” “How does this look from my customer’s point of view?” Some are singularly unfruitful lines of approach, or viewpoints: “how can I sell my product?” “How can I get people to use my product?” Unfortunately, these last two are the usual approaches to marketing, but they are narcissistic points of view. They are not wrong, but if they are our only perspectives, they tend to lead us to neglect the customer’s viewpoint, and therefore lead us into ineffective ways of marketing. They can be an invitation to put on blunders.

It is also worth pointing out that the only way to look beyond superficialities, to see through illusion and to create anything worthwhile is to look at it from more than one perspective. Walk around it, look from above and below, get inside it, imagine it differently, reinvented it, etc.

What does this have to do with my word of mouth orientation?

Everything.

I am suggesting that you keep whenever orientations and perspectives have worked for you in the past, such as advertising and/or sales perspectives. In addition, however, I urge you to look at all of your marketing as a word of mouth generating system. If, for most products, it is the word of mouth that triggers the sales, is it not important to look at what triggers the word of mouth? What if all elements of marketing, such as sales, advertising, direct mail, etc., were not oriented toward directly persuading people to use the product? Instead, what if all your marketing elements were organized around causing people to talk about the product in a way that would get them to use more, and get their friends and colleagues to use more?

Sometimes the “long way ‘round” can be the fastest. In fact, some would argue that going after word of mouth directly is not the long way around. It is what happens anyway: marketing leads to word of mouth, which leads to sales. Why not try organizing everything around word of mouth, since it is the central part of the mix?

There are many ways to accomplish this, such as testimonial ads, materials that describe case studies of how customers use the product successfully, endorsements, product seminars and the like. These are usually very effective, which is why these methods are often overused.

But these techniques, and dozens of others that can trigger massive amounts of word of mouth, are usually used piecemeal. They need to be organized into a campaign, so that each element supports and amplifies each other.

That's what we do in our word of mouth campaign consulting.

What I am urging you to do is to consider a total approach. What if all parts of your marketing were focused singlemindedly on one goal: getting people to talk favorably about your product? I know this is extreme, because you’ll always need things like closing pieces, order forms, etc., but it is very productive to consider marketing from this orientation. When you look at a marketing system from this perspective—as a word of mouth generation system—you will see it in a whole different light that reveals many opportunities.

[For instance, if you look at the marketing communications, you will almost always see elements that could not possibly generate word of mouth. Or, if generated could not survive from one person to another. You will typically see communications that are asserting facts that are unproven, in a brute force attempt to convince skeptics, instead of simple quotes that will remove all doubt.]

I cannot even begin to give you a flavor for how many opportunities are lost, how much more effective most marketing mixes could be made if they were viewed from the perspective of word of mouth. It is routine to be able to increase sales multi-fold (yes, 2-5 times!) by tuning your marketing to the word of mouth note.

On-Line, Real Time Internet Focus Groups

October 22, 2008 |  by  |  Secrets of WOMM  |  No Comments

Note: This is a reprint

You can now get real-time reactions to your Web site, Internet software, and product offerings by means of online focus groups*: Connect respondents via telephone focus groups over their standard phone lines. Respondents are at their own computers, so they can all look at the same stimulus materials. They can:


· visit web sites together
· look at new software features
· retrieve and read concept statements and diagrams
· react to new ideas
· learn a new program in the days before the sessions, or in real time.


*In other words, you get telephone focus groups coupled with Internet access. You get total interactivity in real time, in people’s real life situations. This is not like the usual “online focus groups.”

For a comparison of the usual online focus groups with both telephone focus grousp and face-to-face focus groups, click here: Online Focus Groups.

This methodology replicates the best features of face-to-face focus groups, while removing the disadvantages. You get the rapid-fire interactivity, openness and depth of face-to-face focus groups. In addition, you get nationwide representation and access to hard-to-reach respondents. You also get greater speed from project inception to completion, higher-level participants, people working on their own familiar equipment in their own natural environment. The groups are also less expensive than face-to-face groups.


WOM gone wild in a crisis">WOM gone wild in a crisis

October 9, 2008 |  by  |  Word-of-Mouth Marketing  |  No Comments

The current financial crisis provides a rare opportunity to study Word of Mouth under crisis conditions. It turns out that Word of Mouth works differently under these conditions.

It’s interesting to watch almost everyone get the current financial crisis wrong, watching the spread of misinformation, the lessening of the ability to listen, the growing list of “That Which Must Not be Questioned” and the elevation of nonsense into dogma in a crisis, i.e. a perceived necessity to act immediately. Fascinating. Instructive. Scary.

In periods of extreme uncertainty coupled with an urgent necessity to act, WOM becomes more important, but of much lower quality. False information spreads. Simple questions don’t get asked by our designated questioners (the press). Simple questions like, “yes, but what made THAT possible, encouraged it, blinded people to the problems, etc.” Simple but wrong explanations are very appealing. No one wants to ask the deeper questions out of fear of looking stupid or or getting overwhelmed with too much confusing information.

One of the functions of WOM is to piggyback on others’ knowledge and experience, thereby saving us time, effort, uncertainty and risk. That may be fine for buying a product, but it’s not so good when the matter at hand is extremely important, urgent and complex.

However, there is a silver lining to this. Dissenting opinions and evidence are getting passed around. For instance, I’ve seen a NY Times article predicting the crisis in 1999 being passed around and laying it at the feet of Fannie Mae’s — and other GSEs — granting of more mortgages to people who obviously couldn’t repay. Some people are questioning why people would do such a thing, and not accepting “greed” as the “obvious” answer. (Wouldn’t a greedy person do the opposite?) There have been many mentions of the Community Reinvestment Act and the “mark to market” requirements (regulation, not deregulation) that are also at the root of the situation. Anyone who wants to access WOM from knowledgeable people can now do so, unlike in previous crises. Wikipedia, perhaps the most amazing result of the WOM revolution, is surprisingly accurate, clear and concise in describing these controversial issues, objectively. For instance, the “mark to market” issue, while the TV pundits say it’s too difficult for us to understand, is a trivially simple concept that Wikipedia easily explains.

While most people are analyzing the symptoms of the problem, some wiser people are asking what are the root causes and what really allowed these causes to happen.

When the conventional WOM is saying that something is too complicated for you to understand and that we have to act now on the “obvious,” run for the hills holding your wallet. Actually, run for Google and read, read, read — not just the first few entries. You will eventually find entries that are crystal clear and easily understandable.

Lessons:

We can now question what we hear, and get answers.

We can — and should — shop for our Word of Mouth carefully, critically and cynically.

The age of being able to manipulate and control information is over, but is still operative in the short run.

WOM can never replace thinking — except when we allow it to, which is sometimes desirable.

Professional Word of Mouthers, such as TV pundits, are often pushing a hidden agenda or hiding the fact that they don’t have a clue. This is particularly true of reporters. Reporters report, that is, they repeat what at least two people say. They call this corroboration. Criminals are found guilty on the basis of corroborating witnesses. But so did “witches” get burned at the stake.

WOM is inherently self-correcting under conditions of transparency, high feedback, reward for success and/or penalty for failure and a high standard for evidence. Wikipedia is a shining example. But this self-correction can be shut down by “The Sky is Falling” urgency and desperation, by telling us that the situation is too arcane for us to understand, by PC dogma that forbids questioning, by intimidation, by distraction (such as the real unfairness of things that don’t make a difference, such as executive salaries and immunizing people from their poor judgement), by illusions masquerading as facts, by wishful thinking and by Political Correctness and other dogma (unquestionable beliefs).

WOM can accelerate the spreading of speculation, misinformation and panic — and make it more credible before it makes it less credible.

WOM in this Information Age increases the chances that the small number of people who correctly understand the situation can eventually be heard.

Beware of WOM that attempts to complicate.

People can sell almost anything in a neatly packaged story.  President Bush’s story about the necessity for the bailout was almost identical in structure to his speech about the necessity for invading Iraq, which I suspect that at the time, but which was frighteningly driven home in a split screen episode on The Daily Show.

<embed FlashVars=’videoId=186052′ src=’http://www.thedailyshow.com/sitewide/video_player/view/default/swf.jhtml’ quality=’high’ bgcolor=’#cccccc’ width=’332′ height=’316′ name=’comedy_central_player’ align=’middle’ allowScriptAccess=’always’ allownetworking=’external’ type=’application/x-shockwave-flash’ pluginspage=’http://www.macromedia.com/go/getflashplayer’></embed>

Note; take this out and re-insert in html mode.

Eventually, even under conditions toxic to the truth, some kid will step forward and say “The Emperor has no Clothes.”  That kid is invariably a pain in the ass who increases our discomfort and who should therefore be treasured.

Word of Mouth — without words and without mouths!

Implied WOM — Here’s a case where it’s more important than explicit WOM

The Olympic swimming competition is providing a great example of what I call “Implied Word of Mouth.”

The current flurry of Olympic gold medals and world records in swimming is being attributed in large part to the new Speedo LZR swimsuits.

— 38 world records have been broken since its introduction in February until June, before the Olympic qualifiers and Olympics, not counting all the Olympic trial and Olympic records.

In fact, as of this writing, here’s some information that Speedo has on its website:

200808151508

They have an endorsement deal with Michael Phelps. That’s an obvious use of paid word of mouth.

More importantly — and often neglected by people who are thinking about word of mouth — is the implied endorsement by all of the swimmers, many of them previously non-contenders, as they win medals and smash world records.

Adding to the situation is the controversy around whether the suits constitute “technological doping.” Swimmers and Speedo are being accused of using technology — rather than athletic ability and training — to give athletes an artificial edge, much like using performance-enhancing drugs.

It is just about the ideal word of mouth situation:

  1. A wildly superior, unusual product.
  2. Easy to talk about the product as a whole.
  3. A technology story that is easy to describe, thereby giving a “reason to believe.”
  4. An overall story that is easy to tell, even in headline form. (“New Kind of Swimsuit Shatters World Records” Better for the Company: “New Kind of Swimsuit Makes Even Mediocre Swimmers Win Races.”
  5. Celebrity endorsements. Some paid, others spontaneous.
  6. Implied endorsements by everyone who is seen on the Olympics wearing one, especially medalists and world-record breakers. [Note: This is the original meaning of “viral marketing”: a product whose very use is an implied recommendation by those who use it. It was originally used for HotMail, which had at the bottom something like: “Sent by HotMail. Want a free email account? Go to Hotmail.com”)]
  7. Controversy, generating buzz, that reflects well on them. After all, if the suits were not effective, there would be no accusations of unfairness.
  8. An amazing website (Speedousa.com). It is simple, uncluttered, fun, and allows you to find anything you want on a very information-packed website with only an obvious click or two. Their explanations are simple, yet informative. There are a few problems: they have a fun “Virtual Model” section in which you can construct someone who looks like you, and then try on various kinds of swimwear (when did “bathing suits” become “swimwear”?). Unfortunately, all of the avatars are under 30. More importantly, they have so many fabrics and lines that they need a comparison chart or a decision tool where you can enter info, such as whether you are a competitive swimmer, where you will use the swimwear, etc. and it makes recommendations. Like many of the sites that help you pick a camera or a television set.
  9. A product that is not yet available to the public, but will be soon, thereby building desire for something you can’t have. By the way, a full swimsuit will cost around $550, with leggings costing just $350, and trunks just $290. But don’t worry, they have models that are almost as good, especially for the non-competitive swimmer. By the time you check out other models, their $100 and $50 swim trunks begin to look cheap.
  10. There are dozens of other little and large issues around their product lines, website, attitudes, innovative spirit, etc. that make this a marketing situation well worth studying. I’ve barely begun to look into this company, and already I’m bowled over.

Yes, but…

Note to any companies that are tempted to say, “Yes, but we are not Speedo,” or, “Yes, but we have a mundane product,” let me respectfully remind you of several things: First of all, stop saying “Yes, but…”  Then, remember that they were a swim trunk manufacturer. There is nothing more mundane than that. Then, they were the first to use Lycra® in swimwear in 1972. Then, a series of innovations in all areas of sportswear followed that. To get WOM, you have to be EXTRA-ordinary.

The REALLY important lesson here:

Okay, here is your reward for reading this far: All of the above is an example of a much more important and broader concept: Decision Simplification. Speedo has made the brand choice decision into that Holy Grail of marketing: a no-brainer. If you want to buy a swimsuit and want the very best, the decision is now simple — a decision so simple that no time or effort has to be spent on it by busy people (everybody!). If you are an affluent and aspirational buyer of sportswear, what are you going to buy yourself or your kids? Simple. The suit that Michael Phelps and every other medalist and world record holder wears.

Many people have gone from only a dim awareness of the brand to the belief that Speedo makes the best swimwear. When they go to their website, they find out that they make a broad line of sportswear and accessories.

It doesn’t make a bit of difference if Speedo doesn’t make any money on the new swimsuits. They have, after all, put a huge amount of R&D into its development. They have now out-Niked Nike, the masters of the actual and implied endorsement. They have demonstrated in the most rigorous environment that their particular clothes actually enhance performance. I’m not aware that anyone else has done that, at least so convincingly and so publicly.

This particular formula for Decision Simplicity is simple to understand, but hard to do: Make a smashingly superior, astonishing product and get everybody to use it visibly because of the edge that it gives them. They don’t actually have to say a word about it, although they will. Of course, you might have to put in some R&D that will make the bean counters go crazy.

What this means to you

If you can make a product that actually enhances the performance of something your customers do (why make it if it doesn’t?), you are making your customers into a personal champion and making them feel better about themselves. They will brag about it. They will wear your logo.

Also, get the leaders in your customers’ line of work to visibly use it. Get them involved in its development, get their continual feedback, stir up the good kind of controversy and competition, make it something whose name and logo they are proud to display. It’s worked for Speedo, Nike, Canon, Nikon, Leica, Apple and many, many other brands that you’ve never heard of because they are in obscure and technical areas. But, I could name plenty of other brands in windsurfing, magic, photography, surgery and medical devices. There is room in your area, even if you’re getting clobbered by a Nike at the moment.

Here’s another idea: Maybe you should run an “Olympics” in your category. For instance, if I made voice dictation software and it was the fastest on the market, I would run a contest for the fastest “typist” (sounds better than “dictator”) in the world. They could type or use voice dictation. Since the fastest typist in the world types about 160 words per minute, and I can easily hit that with my present voice dictation system, the champion would be widely acknowledged to be the fastest in the world, using my software. My guess is it would be over 200 words a minute, using my software. This would be a real contest that actually demonstrates the superiority of my product dramatically, instead of the stupid, artificial contests that are usually run.

How can you take advantage of implied word of mouth?

Technorati Tags: Customer Decision Experience, , Decision Simplification, WOMM, Womworthy products, word of mouth marketing, Word-of-mouth marketing

Technorati Tags: Customer Decision Experience, Decision Simplification, , WOMM, Womworthy products, word of mouth marketing, Word-of-mouth marketing

Technorati Tags: Customer Decision Experience, Decision Simplification, , WOMM, Womworthy products, word of mouth marketing, Word-of-mouth marketing

Are you being subtly obnoxious?

March 26, 2008 |  by  |  General  |  No Comments

Sometimes, exerting a little pressure on customers to get them to use your services again seems perfectly reasonable from the company’s point of view.

From a recent Hilton email:

.. But Time is Running Out



We don’t want to lose you as a valued member. Please act by
June 01, 2008 to keep your HHonors account open. If no activity is recorded by that time, the remaining point balance will be forfeited and your account will be closed. Prior to your account closing, you may redeem your points for any eligible reward. For a complete listing of HHonors rewards, click  here.

To which I replied:

If you really don’t want to lose a valuable member, don’t apply this pressure. Just keep the account open and don’t hit me with arbitrary requirements.



To which they replied:



As long as you keep your account active by recording at least one eligible point earning activity every 12 months, your HHonors points will not expire.  However, should you go more than 12 months without recording any eligible activity, your account will be deactivated and your accumulated point balance will be forfeited. If you do not have an activity, your account will be automatically closed due to inactivity.

If you have any further questions regarding your HHonors account, please let me know.

Bee

Hilton Reservations and Customer Care

2050 Chennault Drive

Carrolton, TX 75001

To which I replied:



Thanks for responding personally.

If you knew how arbitrary, threatening and non-customer-oriented that sounds, you would not do it or say it. It’s so bad that I’m going to use it as an example of bad customer policies and communication in my blog and my speeches. Thanks for the material.

Here’s the communication that I would have liked to have received. Wouldn’t this have been better?

Dear Mr. Silverman,

We noticed that you haven’t stayed at a Hilton for a while. Is this just an accidental byproduct of naturally fluctuating travel patterns, has our competition provided something better, or did we do something that you are not happy with? While we usually close down inactive accounts after a year of inactivity, if you click on this link to tell us to keep it open, we will be happy to do so.  But more importantly, if there is anything that we can improve or rectify, I want to hear about it so that I can personally intervene to make it right.

We know that it is very hard to get new customers but it is very easy to lose them. While our business is formally called the hospitality business, we know that we are in the happiness business. We are passionate about constantly improving our level of hospitality and your happiness. Please take a moment to tell me what we can do better, no matter how ambitious or how minor it may seem from your perspective. Our legendary level of service comes from two things: a few occasional major breakthroughs and hundreds of minor improvements. Many of these come from customer suggestions, even though our professionals literally stay up nights figuring out improvements. We don’t just say that you are a “valued member.” As you will see if you take the trouble to jot down a few thoughts, we take your happiness seriously and will demonstrate to you just how valuable we consider your patronage.

Bee, your personal customer advocate.

BTW, call me at ——– if you want to talk about this personally.

——————————-

Some hotel firms, other firms, actually to send letters like this — and mean it. They follow up, make things right, provide personal service and don’t send out form letters.

By the way, I have no gripe about Hilton Hotels. My last stay at a DoubleTree in LA was wonderful. Too bad they had to ruin it with bad corporate communications. Come to think of it, I’ve gone more than a year on occasion without staying at a Marriott. They never cancelled my account.

David Pogue wonders about the Macintosh Surge

David Pogue has recently attempted to explain the Macintosh Surge, and solicited opinions about it:

http://pogue.blogs.nytimes.com/2008/01/18/explaining-the-macintosh-surge/

The comments, hundreds of them!, are a primer on WOM and should be read by anyone interested in WOM.

(Those of you who go to the WOMMA conventions: remember when I got up and challenged the Vista product manager to give me a single reason to switch to Vista, instead of a contest to win a trip to the moon!)

In part, here’s what he says:

At the risk of enraging the Apple bashers, I can’t keep my mouth shut any longer: Something is going on with the Macintosh.

At this week’s Macworld Expo, there were 475 exhibitors. That’s 100 more booths than last year.

There were 50,000 attendees. That’s 10,000 more people than last year.

A book publisher told me that 2007 Macintosh book sales were up by double-digit leaps over the previous year.

Gartner’s fourth-quarter 2007 research shows that Mac shipments grew 28 percent over the year before, giving it an 6.1 percent market share. (It was 3-point-something only a couple of years ago.)

According to Net Applications, use of the Mac’s Web browser, Safari, climbed 32 percent in 2007.

Apple sold 2.16 million Macs in the last quarter–a new company record.

And anecdotally—well, you probably know somebody who’s switched to the Mac recently.

What is going on?

He rejects the IPod (and by implication iPhone) halo effects.

He rejects the “fed up with viruses and spyware” argument.

He says that the best theory is “Windows Vista.” “When people found out they’d have to buy a new computer and learn a new interface, a certain slice of them just said, ‘Well, if I have to buy a new machine and learn a new interface, I may as well get the cool-looking, virus-free one.’

He goes on to ask, ”But could that effect explain this gigantic 35 percent leap in just 12 months? It’s still an expensive proposition to switch platforms once you’ve got an investment in software and peripherals.

Anyone else got a better theory?“

What he didn’t mention:

He and other gurus now openly support the Mac.

A HUGE increase in the Mac notebook share of market.

The ability for Macs to co-exist on Windows networks.

The seamless integration between the iPhone and/or iPods, email programs, iPhoto, ITunes, IMovie, iCal (the Mac calendar).

Some programs that are Mac-only that are so good that it’s worth switching for them. For me, they are DevonThink Pro (a free-form database that you can dump all your info into and retrieve with artificial intelligence — and a whole lot more) and Scrivener, an authoring program for articles, scripts and books that goes light years beyond word processing by separating info gathering, writing and formatting into totally separate processes. Quicksilver — the most useful program I’ve ever used that is so all-purpose that I can’t even describe it adequately. (But, here’s a try: with a couple of keystrokes, it lets me instantaneously find any file, move it, open it, launch programs, add text to files without even opening them, send emails, look up phone numbers, plus dozens of other things without even thinking.) Plus, Keynote is way better than PowerPoint. Plus some technically advanced photography programs that I can’t even go into.

in addition, the upcoming arrival (which he did mention in another post) of MacSpeech Dictate, the super-accurate speech recognition program, and the even better implementation of Microsoft Word 2008 on the Mac than Word 2007 on Windows itself! also make the Mac much more attractive, and well worth the learning curve.

Here’s my take:

His premise is wrong. He is looking for something that has recently changed to explain it all.

PC vs. Mac is the largest word-of-mouth disparity that I have found in decades of studying word of mouth. I’ve been predicting this surge for years because nothing can withstand the degree of negative word of mouth that Windows and Microsoft have, especially against such a positive WOM alternative.

As I’ve reported before, when I give a speech and talk about this, I ask the audience how many people use Windows. Then I ask, knowing what they know now, how many of them think they would switch to a Mac for their next machine if it were feasible to run their Windows programs, or make an easy switch, if it didn’t cost them much in money or time. At least 80% of them say they would, if their companies would only let them. This much pent-up demand is screaming to be satisfied.

But for the first time, it’s becoming ever more easily satisfied.

What has held it back is that Apple has ”knowledge blindness“ and doesn’t understand how onerous people imagine the switch to be. Apple doesn’t understand that most people don’t even know what an operating system is, and don’t want to. Apple doesn’t understand all the things they could be doing to ease the switch and think they are doing all they can.

The ”Tipping Point“ is arriving.

Gradually, these decision barriers have been coming down. Required, legacy Windows programs can be run on the Mac, so businesses can use it. Famous Windows mavins, and regular IT people are encouraging their non-geek spouses, children, friends and grandmothers to buy Macs, so they don’t have to be bothered by phone calls. The technology mavins like Pogue  himself and Mossberg of the Wall Street Journal have finally come out of the closet and no longer afraid to say that the Mac is much better. The Mac kids are growing up. The last few areas missing Mac programs, such as voice recognition and GPS mapping, now have Mac alternatives, often better ones. And now, they keep hearing how easy it all is to switch. Apple is porting over files from PCs at Apple stores. More complete switching support would be even better, but it’s coming along. Apple stores themselves have revolutionized retailing. More of people’s friends are able to offer support, as are stores and consultants. Apple offers a $99 one-year series of private, weekly lessons in how to do YOUR things on the Mac. It’s turned many people I know from people who hate the computer, to people who have fun on it and produce cool things that spread the word of mouth.

Example: My wife — who barely tolerated and rarely used her Windows computer — has been having a ball doing the things she is learning in those lessons. She has produced our Holiday cards on it, stunning picture and all. Of course, on the back of each card, it says ”Made on a Mac“ (which could have been optionally removed, but we are Mac fans).

Gradually, the word of mouth is reaching critical mass, so that a large number of people keep hearing from people they know and trust that the switch will be painless and supported. In addition, they keep seeing all the cool things that their friends can do: the movies, greeting cards, coffee-table picture books, web sites, picture galleries, etc.

So, the answer, David, in summary, is that you are seeing a surge now because of the exponential effects of word of mouth. At some point, it reaches critical mass, then everyone asks, ”what’s new,“ looks around for an event, and points to the most obvious or most proximal. There is no single event. The so-called ”tipping point“ is made possible by all of these events, plus the removal of most of the under-appreciated barriers to switching.

Apple creates WOMworthy products (spectacularly simple, elegant yet powerful) that makes people feel very good about themselves, creating word of mouth. AND — the reason that the geeks don’t understand — we are reaching the point where real people are viewing the switch as less onerous. What technical people see as an adventure and ”not a problem“ is becoming actually just about tolerable and only minimally painful for the rest of the world..

At some point WOM grows exponentially, so look for the surge to turn into an explosion in Mac sales at some point in the very near future, if Apple doesn’t get too arrogant and shoot itself in the foot, which it could easily do, since it is product oriented (in the best sense) rather than people oriented. When they make mistakes, that’s where they tend to make them.

One last point. Imagine what would happen if the Mac OS could run Windows programs natively, without virtualization software and without Windows. Apple would take over the market overnight.

George Silverman

Word-of-Mouth Marketing Speaker and Consultant

Author,
The Secrets of Word-of-Mouth Marketing

main website:
www.mnav.com    blog: wordofmouth.typepad.com