Archive for General

An amazing Word-of-Mouth disconnect

January 23, 2006 |  by  |  General  |  , , ,  |  No Comments

Just got back from the WOMMA WOMBAT (Word of Mouth Basic Training) conference. 450 people! It was great. More about it later. But I just had to post this:

I gave a presentation to a standing-room-only crowd. Very flattering. But I digress.

In the course of the presentation, I said, apropos of a recent post that if WOMwere everything, we’d all be using Macs. Think about it: the best word of mouth in the
whole universe, and about a 4% market share. I asked how many people
had Macs. About half of the people raised their hands. Then
I asked, “Of the Windows people, how many would like to switch
if it weren’t for the expense and trouble of switching?”
Virtually ALL said yes! Wow. What’s wrong with this
picture?

Apple has done a magnificent job of creating the reasons to switch, but failed to provide a simple, easy way to switch. It’s like England trying to get everyone to drive on the right side of the street, gradually. Can’t be done.

Some things can’t be done gradually, but MUST be done gradually or they are perceived as too painful. The switch from Windows to Mac is one of these for the average computer owner. Virtual PC is too slow and doesn’t work for many programs, such as my favorite, Dragon Dictate Naturally Speaking 8. So, even though I’ve switched, I have to maintain a Windows machine to write my books and articles.

Until now. If Apple will encourage developers to develop a simple operating system switcher (they exist now on the Windows platform) that will allow people to switch between Windows and OS X, people will be able to buy a Mac, install Windows and have a Windows machine just as if they bought a Dell. Then they could switch gradually, starting with the browser and mail client, which would get the Windows side of the machine off the internet. Now, they have a Windows machine that is unsusceptible to viruses, spyware, malware, etc. They can switch the other programs gradually and see much easier each application is on a Mac.

Apple probably won’t do this. But their customers will. And in the new, new marketing, the customer is in control. As long as Apple doesn’t sabotage the ability of its new Intel machines to operate Windows, we will see all of this pent up desire to switch cause a major shift.

Of course, there are a whole lot of other things that Apple needs to do (none of them that hard compared to what they have already done), in order to get a wholesale switch from Windows to Mac.

The lesson: Even when there is a major pent-up demand created by word of mouth, the mechanisms have to exist to switch to it easily.

George Silverman

Word-of-Mouth Marketing Consultant

Author, The Secrets of Word-of-Mouth Marketing

www.mnav.com wordofmouth.typepad.com

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The Death-Knell of the Old Marketing

January 23, 2006 |  by  |  General  |  No Comments

CNN.com 1/23/2006: “Ford will close 14 manufacturing plants in North America and cut up to 30,000 jobs in the coming years to try to stem losses and adjust to a new, significantly lower market share. ‘If we build it, they’ll buy it. That’s business as usual and it’s wrong,’ said Ford Chairman and CEO Bill Ford . ‘Our product plans for too long have been defined by our capacity. That’s why we must reduce capacity in North America.'” Full story

Wow. The best statement of the old marketing in a sad event. “If we build it, they will buy it. That’s business as usual, and it’s wrong.” Sadly, the response is to close plants (which I have no doubt is necessary in the short run). But the response should be the announcement of cars that people will truly get excited about. Not the recent announcement that they will be building a whole lot of hybrids by 2010. That’s too late.

I’ve been saying since 1972 that Detroit is in big trouble. That was before Japanese cars were even a major player. That was when Detroit failed to respond to the first gas shortage.

NOTHING can withstand negative word of mouth for long. OK, it took decades, but it was a steady decline.

If you build it, they will buy, only if what you build is totally driven by what the consumer will rave about to their friends.

I take no pleasure in this triumph of word of mouth.

George Silverman

Word-of-Mouth Marketing Consultant

Author, The Secrets of Word-of-Mouth Marketing

www.mnav.com wordofmouth.typepad.com

Word of Mouth isn’t everything in marketing

January 10, 2006 |  by  |  General  |  ,  |  No Comments

Some word-of-mouth marketers are acting as if word of mouth is the be-all and end-all. It is not. If it was, Apple would be the dominant computer; we’d all be using Tivos and Betamaxs, Leica cameras and many other revered products. Also if stunt marketing were really word-of-mouth marketing and Word-of-Mouth Marketing was totally effective , we’d all be eating KFC [as if subservient chicken was marketing at all] and Jib-Jab and Moveon.org would have gotten Bush defeated.

Stunt marketing is not word of mouth, and it isn’t even viral marketing. It’s just the old PR stunts. But now, we have the Internet to transmit it. Buzz is still just noise. Tongues wagging is just motion without traction.

So what, if anything, is the be-all and end-all?

Content rules. You still have to have a big idea, differentiate it in a meaningful and beneficial way and have a product that is extraordinary in a way that people will talk about. Then you analyze the decision process, find the blocks and encourage people to talk about the things that are holding people back.

People who don’t keep this in mind are going to get the wrong ideas about word of mouth from the upcoming WOMMA WOMBAT conference. They are going to get over-whelmed by techniques and lose the substance. I’m about to post some ideas for how to sort it all out. Stay tuned.

George Silverman

Word-of-Mouth Marketing Consultant

Author, The Secrets of Word-of-Mouth Marketing

www.mnav.com wordofmouth.typepad.com

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Standards of advertising vs. word-of-mouth marketing

September 17, 2005 |  by  |  General  |  , ,  |  No Comments

What are the standards for judging advertising? I say that advertising has one overriding standard: how much it increases the likelihood that someone will buy the product. In other words, advertising is first and foremost a selling medium, not an entertainment medium. Obviously, entertaining advertising tends to be watched and talked about. That’s why entertainment tends to creep in as a standard of advertising. Most of the time, professionals and amateurs judge advertising for its entertainment value. No. As an old ad said many years ago for an advertising agency, “it ain’t creative unless it sells.”

How does advertising sell? Advertising primarily sells by dramatizing the product’s most important, differentiating benefit. That’s what advertising does best, and better than any other medium. Think about it. All the great ads bring to life in a memorable, exciting, strikingly impressive, often larger-than-life way, the central benefit of the product — the thing the product will do for you that no other product will do as well. So, the advertisement or commercial leaves you with the impression of the product as being better in a way that will make you better in some way. Often, this dramatization is extremely creative and entertaining, but that is not the primary purpose. It is a fatal mistake to confuse creative dramatization of benefit with entertainment. Proper dramatization is almost always entertaining. But presenting the product in an entertaining way is not always beneficial to the sales of the product.

Almost all advertising awards and polls of popular commercials fall victim to this confusion, particularly around Super Bowl time.

I attended the U.S. Open tennis championship recently in Flushing Meadows, and have been also following it on television. There are some instructive marketing and advertising lessons and reminders.

First, let’s talk about the “product” itself, then turn to the advertising.

First, it’s not about the “product.” It’s all about the customer experience. It was a delight from beginning to end. I have been reading that there was a conscious effort to turn this into “Disneyland with nets.” Meaning, I suppose, turning it into an amazingly surprising customer experience. They succeeded. Clearly marked signs, ultra friendly policemen, friendly parking attendants. And that’s before we even got in. Then, hosts/hostesses in straw hats, comfortable seating, fun stuff on the Jumbotron, blue courts for visibility, allowing spectators to keep balls accidentally hit into stands, each winner hitting three autographed balls into the stands, specialty foods, etc. It seems that every single area, from the broadest picture of the stadium design and setting itself to the smallest detail has been looked at and rethought with customer delight and word of mouth in mind. So, it’s an excellent example of one of the secrets of word of mouth marketing: design your product for the “Wow!” that will get talked about.

Word of mouth marketing has even reached the sports stadium in the form of consciously creating a customer experience that will get people to talk. I keep meeting people who have just been to Flushing Meadow and can’t stop raving.

Let me ask you, What are you doing at the micro and macro level to create customer delight. Are you making them say “Cool,” “awesome,” “ holy s—t!”

Television coverage has also been wonderful. The camera people and announcers are just amazing. McEnroe in particular. He has a noticeable absence of many of his past unendearing attitudes. He and Tracy Austin seemed to be bending over backwards to emphasize the positive aspects of everything they are reporting upon.

The advertising, particularly the TV commercials, on the other hand, are terrible. They are so repetitive I could scream. I had to switch over to TiVo to take advantage of the lag time. The Andy’s Mojo press conference commercial for American Express is one of the worst I’ve ever seen, although it has been widely hailed by the advertising community as a big winner. Why is it so terrible? Read on.

They have nothing to do with the product, much less the benefits of the product, much less the dramatization of the most important benefit of the product. They are clearly designed to create buzz without creating word of mouth. Word of mouth is the recommendation of the product from customer to potential customer. Buzz is just getting people to talk. Why would anybody apply for an American Express card or use their existing card more as a result of this commercial? The commercial contributes nothing to the perceived benefits of the American Express card or American Express is a company, except perhaps to show the American Express is hip and with it.

The American Express Gold card “first date” commercial, on the other hand is excellent. It’s a telephone call from a man buying tickets for a first date from, apparently, an American Express ticket agent. The person makes several suggestions for events that the person could take his date to. It not only demonstrates an unusual degree of customer orientation and friendliness, but emphasizes the primary benefits of the Gold card, even listing them in text: great seats for great events, early on sale tickets, seats exclusively for you. In other words, if you get to Gold card, you have access to tickets that you would not otherwise have access to. In other words, if you get the American Express Gold card you will have advice and access to tickets you would not be able to get otherwise. The commercial could be improved by making it clear who the person is talking to and by making the benefits less jargonny and clearer. But the benefits are there. The contrast between the two American Express commercials could not be greater. The Roddick Mojo commercials are a pathetic attempt at alternative advertising without any understanding of how customers make decisions. The Gold card commercials are old-fashioned slice of life benefits commercials that do the job.

There will be a big run on US Open tickets next year. I suggest that you get an American Express Gold card so that you can get better tickets early! Now, why didn’t they have a commercial about that in the middle of the Open?

The lessons here are that the creation of buzz for its own sake is fruitless. Word-of-mouth without product benefits, as is the case with most viral and buzz marketing today, is fruitless. Advertising that does not emphasize product benefits and give people a reason to buy is fruitless. Getting clients to spend their money on fruitless “cool” stuff borders on the criminal.

George Silverman

Word-of-Mouth Marketing Consultant

Author, The Secrets of Word-of-Mouth Marketing

www.mnav.com wordofmouth.typepad.com


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Interesting post from Tom Peters

September 6, 2005 |  by  |  General  |  No Comments

Excerpt:

Last week GM announced August car sales were down a whopping 13% (industry sales were up 3.8%) … even as they continued their “free cars” employee discount. Ford’s biggest SUV sales plunged … 40%! And, oh yeah, Japanese car market share hit a new record, 39%. (Nissan … +15%. Toyota … +14%. Honda … +23%.) So what, exactly, is it/was it that Wagoner knew that you and I didn’t?

[Link no longer available]

In the meantime, Audi has insisted that I pay for every little ding and scratch on a 4-year-old Audi A6. And my Toyota dealer continues to be wonderful about the service on our twin Priuses. Except… they couldn’t change the channel in their waiting room from a very disturbing History channel documentary about the Holocaust that I couldn’t watch early in the morning before my coffee, because the “only person who can change channels, who has the key, hasn’t come in yet and won’t be here for an hour. How’s that for empowering employees?”

WOMMA “Word of Mouth vs. Advertising” Conference

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September 2, 2005 |  by  |  General  |  Comments Off on WOMMA “Word of Mouth vs. Advertising” Conference

We would like to invite you to an important event: WOMMA’s “Word of Mouth vs. Advertising” Conference. It’s in NYC on September 28th. See below for full details.

We’ve arranged for a $50 discount as a courtesy to our associates – just enter this code: womadvisor

Market Navigation is a leading member of WOMMA, which is committed to building a prosperous word of mouth marketing industry based on best practices, measurable ROI, and ethical leadership.

You can learn more at http://www.womma.org/

Hope to see you there.

George Silverman, Pres. Market Navigation, Inc.

Author, The Secrets of Word-of-Mouth Marketing

www.mnav.com

The most important word in marketing is…

September 2, 2005 |  by  |  General  |  No Comments

Very interesting question posed on this blog:

HELLO, my name is BLOG: The most important word in marketing is…:

My answer:

TRUTH

In Marketing, which has become synonymous with hype? Yes. The Truth, compellingly told, is most of what you need. You ‘rig’ the game by having a product that is WOMworthy, remarkable, outstanding, outrageous, unusual, chatworthy, or just plain good. Then you only have to tell the truth in an interesting way, usually a story. Then you tell the truth about yourself. That’s called Authenticity (See John Moore’s comment on same blog).

George Silverman

Word-of-Mouth Marketing Consultant

Author, The Secrets of Word-of-Mouth Marketing

www.mnav.com

wordofmouth.typepad.com

WOMworthy Reporter — Jeanne Meserve

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August 30, 2005 |  by  |  General  |  Comments Off on WOMworthy Reporter — Jeanne Meserve

I think Jeanne Meserve of CNN should be nominated for a Pulitzer Prize or an Emmy. She is the most incisive, articulate and human reporter on any network reporting on hurricane Katrina, maybe anywhere. The impact of the hurricane aftermath didn’t hit me until I heard her emotional report Monday night.

She just barely held it together as she described how people were trapped with rapidly rising water in their attics or on their roofs. Her voice choked as she talked about how people were calling out in the darkness for someone to help them, with her and her crew unable to do anything, and as she described how her cameraman worked all day with a broken foot. She clearly painted a pained picture of people on roofs waiting in vain, in the dark, to be rescued.

This is one situation where the appropriate emotional dimension added accuracy. It made me realize that the standard of “dispassionate” reporting can sometimes cause distortion. If she had dispassionaty reported on what she saw, I never would have understood the significance.

This was an amazing example of how word of mouth from a trusted source telling a human story was so much more powerful, believable and accurate than the usual “objective” sources.

George Silverman

President

Market Navigation, Inc.

Word-of-Mouth Marketing Consultants

www.mnav.com

Advertising Can Kill Word of Mouth!

Consider this:

1. You are exposed to thousands of ads and commercials a month and only act on a very small handful.
2. You are likely to act on about one in 3-5 recommendations from friends.
3. Therefore, WOM is hundreds to thousands of times as powerful as advertising.

OK, that’s the power. Now, how about the spread?

If 25 people tell 25 people 6 times, it’s the entire population of the world!
Once 25 x 25 = 625
Twice x 25 = 15.625
3x x 25 = 390,635
4x x 25 = 9,765,625
5x x 25 = 244,140,625 (order of magnitude of pop. of US!)
6x x 25 = 6,103,515,625 (population of the WORLD!)

Obviously, this assumes that no one tells someone who has already heard. In real life, there are many duplicates, creating the impression that “everyone is talking about it,” — which they are — making action even more likely.

So, while WOM can spread at viral rates of 1.1 times, successful WOM campaigns are explosive. Gladwell and everyone else got the math wrong. It’s not viral marketing, it’s nuclear marketing. Advertising (at least print) has miniscule pass-along rates. Broadcast commercials have none. Successful WOM is not only explosive, but thousands of times more powerful.

So, why would you ever want to kill WOM? Yet, that’s precisely what saturation advertising and sales campaigns do. Past a certain point of creating initial awareness, if advertising and other traditional marketing efforts are perceived as saturation campaigns — as they are with virtually all new drugs, for instance — they kill WOM. Why, especially when we always thought that good advertising stimulates and complements WOM?

Because people tell other people about things they think they don’t know about. If you tell someone about something that they already know about, you look stupid. So, for instance, a doctor is not going to tell another doctor about a drug that he/she already knows about. In other words, people stop talking about things that are no longer news. Certainly something that is getting saturation exposure is not going to get talked about.

I’ve been designing WOM campaigns for more than 35 years, yet only understood this in the last few years. It’s always been very hard to get WOM going when my client is sending salespeople around, sampling heavily, giving out coupons and taking double page spreads in every magazine in sight. My smaller clients have always done much better, and I never knew why.

So, advertising is not only increasingly ineffective, it is destructive to sales, even if it is increasing sales, and everyone is thrilled. It may be the case that if less advertising were done, more and better WOM campaigns could do much better.

Saturation advertising has other negative consequences. These days, it causes people to wonder, “If their product is so good, why do they have to keep reminding me?” and “Why are they wasting so much money on advertising? Why can’t they put the money into improving their product?”

Jeff Bezos of Amazon has the right idea. He has always found (he’s actually tested) that money put into surprising people with free shipping and other service improvements has a much better return than advertising (which also has a return, but much less).

The ad people will say, “Oh yeah, prove it.” I can’t, yet. The data I have can’t be released. So, at the moment, my case has to rest on common sense and experience.

If the WOM community can develop and release data, it would be devastating. So far, we are making the case that WOM is more powerful, spreads faster, and is a lot cheaper. But if clients saw that they were potentially killing the Golden Goose, instead of hedging their bets by running parallel traditional campaigns, the whole world of marketing would open up. In fact, I think that today’s savvy consumer would realize that ads are for me-too, unremarkable products, and that no product that was worth talking about would be wasting their time and money on saturation ads.

Am I saying, “Avoid all advertising and other traditional promotion.”? No. Advertising should compliment WOM (WOM being the primary medium). Ads shoud give testimonials, stories and other WOMworthy content. Ads should stimulate customers to talk to other customers, reminding them how happy their friends will be after they get the kind of demo, for instance, that only a friend can give. So, the right kind of advertising can support the WOM and be subservient to it. No ad should ever be considered that doesn’t contribute to WOM.

Now, I’ve done it. I won’t even be able to walk down Madison Avenue.

George Silverman,
President, Market Navigation, Inc.
Author, “The Secrets of Word-of-Mouth Marketing.”
wordofmouth.typepad.com
www.mnav.com

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Ford plans “restructuring”

August 24, 2005 |  by  |  General  |  No Comments

Ford plans restructuring: “Ford Motor Co. will soon announce a new restructuring plan to return its key North American vehicle operations to profitability, Chairman and CEO Bill Ford Jr. said Tuesday.”

(Via CNN/Money.)

Watch what is announced closely and read between the lines. I predict that it will be a structural/management restructuring, not a marketing, product or customer relationship restructuring.

What has killed Detroit is word of mouth. The only thing that can save it is word-of-mouth marketing.

Not price cuts in the form of “employee discounts.” Pathetic.

In 1972, around the time of the oil crisis, I wrote a report to the Detroit car manufacturers saying that they were extremely vulnerable to competition if they were not much more responsive to the desires of consumers for reliable, safe and efficient cars. My focus groups showed that Detroit’s image was a disaster and people were furious, but were afraid to buy foreign cars, with the exception of the Volkswagen crowd. (Remember the “Think Small” campaign? Where, oh where, have all the great ads gone?) I said that there here was a gigantic opportunity for a company to build reliable cars that got good milage — and to show them in comparative crash tests. They thought I was crazy. (Volvo later stunned autoland with a highly successful crash test campaign.)

I couldn’t understand why auto makers couldn’t see how frustrated and angry people were, until I was driven to lunch by a top executive of GM. His top-of-the-line Buick Park Avenue drove like it was on a cloud. He proudly said that it was brand new, and that he got a new one every three months. He mentioned that ALL the executives got a new car on a similar schedule. I realized that no auto executive drove a car more than a few months old! They never knew what it was like to have a problem! In the meantime, my three-year-old Thunderbird was falling apart! I was charged $90 to get a brake light changed because they had to remove the whole back panel to get to the bulb! I’m not exaggerating.

I thought Detroit was vulnerable to competition from John Deere, Mac Truck or International Harvester if those companies chose to go into car manufacture.

A few years later, Chrysler was rescued from bankruptcy by the government, then bought by Daimler. Now, people are openly discussing whether GM and Ford can survive. But they are wrongly focusing on the cost of American labor, pensions and health care.

NO!! The problems are with the lack of a close relationship with customers that causes extraordinary products that cause positive word of mouth.

Obviously, I was wrong about domestic companies providing the competition. (I’d still like to see a John Deere car: it would be green, run forever but a little slowly.) Now, the situation has reversed: American cars have the well-deserved image of being unreliable, unsafe and gas-guzzlers. Word of mouth has almost totally destroyed the American manufacturers.

Detroit is not going to be saved by lowering wages, restructuring the pension funds, reducing health insurance or getting rid of unions. It’s not going to survive by more robotics. (They actually need less robots among their executives!) Just like the airlines, they need a different way of doing business.

There are successful auto makers. There are successful airlines. Two industries that are beset by terrible problems. Their few winners all have one thing in common: customers who rave about them to their friends.

Let me tell you two quick stories to illustrate: A friend just bought a $62,000 Cadillac, after a succession of Lexi (Google says that’s the plural of Lexus) and Mercedeses. He hates the Caddy. It has a whole lot of little things wrong with it. When the electric mirror stared working jerkily, he asked the dealer to fix it. The dealer replaced it. It was a $600 repair that my friend was not charged for. It happened again. That this happened again is not the point. The dealer said something that my friend found appalling, “Listen, I can’t keep replacing these mirrors.” My friend said that he only wanted it fixed, not replaced. The dealer had him come back at a time when he could call a special dealer number and be guided through the repair. It broke again in a few days. Now my friend has a constant reminder of poor quality in a $62,000 car every time he adjusts the mirror.

On the other hand, I bought a Prius hybrid, after getting rid of my Audi A6. (See previous post). I didn’t expect to like it that much, but found my wife’s Prius surprisingly roomy, agile and peppy. More about the Prius in a future post, but the point here is a remark from my dealer’s repair manager. I asked him about the wait for maintenance. He said that routine maintenance could be done while I waited, but that he might have to take a little longer with any actual repairs, because he never sees Priuses!!! (Boy, the plurals of cars are really a problem.) I asked my local private mechanic wiz, who specializes in foreign cars. He said that he’s not that good with TOYOTAS across the brand, because he doesn’t see that many because they are so reliable. All my friends say the same thing about their Toyotas and Lexi. “It ran forever.” “Never had to get a major repair.”

By the way, I’m paying $1.30 a gallon for gasoline at the moment when almost everyone else is paying $2.60. How? I’m getting more than twice the milage (45 miles a gallon) with the Prius hybrid than I got with the Audi, and it’s more fun to drive (less acceleration but actually better handling) Everybody’s upset at the gas station. I’m smirking. Na nana na na.


The lesson here is that word-of-mouth marketing — indeed survival itself — starts with the product delighting, surprising, astonishing, wowing the customer.

THAT’S how Ford and GM need to restructure.



George Silverman

President

Market Navigation, Inc.

Word-of-Mouth Marketing Consultants

www.mnav.com

Brand = Reputation. Reputation = Brand

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August 23, 2005 |  by  |  General  |  Comments Off on Brand = Reputation. Reputation = Brand

p>Great Post by that name from Brand Blogger. Raises the question “But what is reputation?”

Glad you asked. Reputation is an expectation, particularly of performance. That’s why brand, or reputation, plays such a large role in decision making. When you see a brand, you think you know what to expect. This saves you a lot of time.

Reputation (Brand) is mostly spread by word of mouth. As I point out in my book, The Secrets of Word-of-Mouth Marketing, a large part of word-of-mouth marketing can be thought of as reputation management. Building a reputation is building a brand, and word of mouth is the key. Who are you going to believe about what to expect about the performance of a product, an ad or your friend, wife, mother, advisor?

I’ve been finding myself gradually moving over to Apple programs, largely because the brand is building quite a reputation with me and with other users. I keep finding things that their programs do that other programs don’t do: great power with simplicity. To be the subject of another post. But suffice it to say here that I just switched almost with blind trust from Entourage (Microsoft’s Outlook for the Mac) to Apple’s Mail, Address Book and Calendar programs, knowing they wouldn’t have the clumsiness that was so annoying with Entourage. I wasn’t disappointed. Simple, elegant, yet much more powerful. Easy to archive. Just also switched from Firefox to Safari to take advantage of its use of Services that Firefox lacked. Again, the brand was enhanced.

I know what to expect with some products (positive and negative). That’s why I’m willing to pay more for certain BRANDS: The Brand or Name has come to represent the expectation of superior performance.

I’ll gladly pay more for Toyota/Lexus, Apple, Nikon, Palm Treo, Go-Daddy, and Monteblanc

Others, like Audi, Microsoft, Earthlink, Verizon and many other brands that I used to love, I now expect inferior performance and service from and wouldn’t even use them at a deep discount.

Others, like Adobe and Continental Airlines, have annoyed me in the past with poor service and/or poor useability, but have turned around dramatically, greatly improving their product interfaces and have done some wonderful services favors for me lately. I find that they literally look different to me, and I go out of my way to use them. (It’s going to be interesting to see what happens with the Continental brand, now that an accountant has taken over as CEO. Prospects don’t look good, judging from the downsizing of their First Class cabins on many planes.)

>>> the brand builder blog: Brand = Reputation. Reputation = Brand.

Customer service horror stories

August 19, 2005 |  by  |  General  |  No Comments

An amazing example of negative WOM. This story has spread across the whole blogoshere and the mainstream press.

Customer service horror stories in this Chicago Tribune article.

(Via This Is Broken.)

Open letter to Audi — Why I can’t recommend Audi anymore

August 19, 2005 |  by  |  General  |  No Comments

After many years of both my wife and I owning Audi A6’s, I regret to say that I advise against buying Audi’s. The story provides many lessons in how to turn positive word of mouth into negative wom.

I used to love the Audi A6. I’ve owned several over the years.  However, the last two have had a series of repairs that I won’t bore you with. My wife’s last Audi finally died when water seeped into the electrical system because a dranage hole under the battery became clogged (inspecting it is not part of the standard maintenence), causing a short circuit. The entire electrical system was destroyed. The repair would have cost $11,000, but the insurance company chose to total the car.

On my car, the twin turbos both burned out, causing a repair that would have cost $9-11,000 if it were not covered by the lease.

However, the real reason that I can’t recommend the Audi is their attitude toward my return of my last car after the lease was up. They had always taken back my cars after the lease had expired without charging me for the normal wear and tear: a few dings and scratches that a three-year-old car typically has. This time, the wear and tear was the same, but the attitude was different. Since I didn’t agree to lease another car, they apparently decided to stick it to me. They decided to charge me for every ding, scratch and every other cosmetic deficiency on this three and one half year old car. In all fairness, where was a crack in the windshield that I expected to pay for (but not $600). They have refused to reach any kind of accommodation, thereby turning a staunch advocate into a bitterly disappointed ex customer. I actually intended to buy another Audi eventually. Now, I’ll do everything I can to discourage people from dealing with a company who wants to grab a few bucks short term and is obviously not interested in the long-term satisfaction of their customers.

I’m now about to try once again to negotiate with Audi to reach a fair accommodation. I’ll update this post to let you know what happens.

Open letter to Pharmaceutical CEOs

I’ve decided to make public the letter I sent to the CEOs of the 50 top pharmaceutical firms urging a Word-of-Mouth (WOM) only launch of their next significant product.

So far, polite interest, but no action.

I’m posting it in the hope that some gutsy pharmaceutical marketer who wants to make history — and a lot of money for his/her company — with me will see it and take action.

If you know of any products that would be suitable, let me know, or — more importantly — let the relevant marketers know.

In the meantime, I’m working with several other companies who will be taking a modified version of this approach but who are not ready to let me go public with it. A couple of these will be very visible blockbusters that I think will make history. Stay tuned.

 

——— ———
CEO
XYZ Pharmaceuticals
Address
City, State Zip
Re: How to Solve the Current Pharmaceutical Crisis.

Dear ————,

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 problem: Physicians and patients are not paying attention to your messages. Traditional promotional costs have escalated to an intolerable level. This is inflating 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.