Archive for Word-of-Mouth Marketing

Further Confirmation that Twitter WOM Works

Twitter just provided yet another confirmation of the power of word of mouth, and a useful tip for you if you get into the kind of trouble that I did.

This could get you out of serious trouble someday:

The Wednesday before the Hurricane Irene was to hit NYC, all models showed that it would pass over JFK airport Sunday Morning. I had a flight due to leave at 9AM on Sunday! So, I called Delta and explained that in view of the almost certainty of the hurricane hitting, I’d like to change my flight to two days earlier, and I’d like to do that now, so that I could save myself and Delta from at least one more call before they got swamped with hurricane rebookings. Spoke to a “Doug Dole” a supervisor at their reservation center, after the request was rejected by a regular agent. He informed me that NYC was not on the list from which they could issue re-bookings. Only Charlotte was listed (at that time only about an hour away from the hurricane’s impact.) I politely pointed out that that was cutting it a bit close and that I’d appreciate his accommodating me, given the inevitable crunch. He informed me that the hurricane was due to veer off and not hit NYC. He said that a change would involve a $150 re-booking fee and a $450 fare increase, since it would be a cancellation and re-booking on short notice. I called back to another supervisor, who said that she would waive the re-booking fee, but not the fare increase.

What would you have done?

As you probably guessed from the Twitter reference above, I got to work with several posts on Twitter, openly ridiculing Delta’s weather forecasting (which I guessed was being done by Ouija Board). I pointed out that their weather update was from 6 o’clock the previous day — an eternity when a hurricane is approaching. I quoted “Doug Dole,” their Utah supervisor, as forecasting that the hurricane was not going to hit NYC.

As I was composing a satirical post, about a half hour from my first Tweet, talking about how they were getting their updates via carrier pigeon, I got a reply from Delta. Their DeltaAssist people publicly tweeted that I should Direct Message my confirmation number and the flight I’d like to transfer to.

I sent them the requested info, and they quickly re-booked me with no additional charges. They also changed the weather updates, and about an hour later put the whole East Coast, including JFK, onto the list of cities approved for hurricane re-bookings.

They sent me a public tweet saying that they were happy to be of service in rescheduling my flight. I tweeted a cordial thank you for being so responsive and a wish that their telephone people could have been the same.

Lessons:

  • Don’t write private complaint letters. Use Twitter and the other public complaint and rating services to publicly flag companies that are not treating customers right. These will differ according to the circumstances.
  • Although I can’t prove it, my experience is that humor, ridicule and particularly satire works better than angry rants. See my Word of Mouth book for examples. Come from trying to help them do better, rather than from anger.
  • WOMM is not only about how you can increase it in your business. It is about how to wield the enormous power of WOM.
  • It’s also about doing what Delta obviously does: it has a team that monitors the social media sites and has the power to cut off a very negative backlash before it got started. Believe me, I know how to use word of mouth. If they had let this go unresolved, I could have created a major, very damaging campaign, boycott, or other negative consequences that could have cost them millions of dollars, as I sat here instead of LA because of a cancelled flight. Treat people right. Monitor their complaints, if for no other reason than you don’t know who you are dealing with. There are better reasons to treat people right, but for people who only look at numbers, this will do.
  • Why can’t companies like Delta do what it takes — like greater discretion, more aggressive forecasts, etc. — to handle situations like this? Why do we need to resort to public humiliation to get treated like valued customers? I know what they would say, and so do you, so I’ll spare you. However, the fact is that they DID treat me right, so they could have done so in my first phone call. BTW, JetBlue and Virgin were honoring re-booking requests at that time without a problem.
  • So, Delta missed a chance with an influential blogger to make me feel good about them, instead of confirming all the talk about them being unresponsive. The fact that they eventually did the right thing doesn’t change my opinion, since they did it under the threat of further public humiliation. JetBlue and Virgin got kicked up another notch, even though I wasn’t even booked on them! Despite the good outcome, I will not be booking on Delta in the future if I can help it. By the way, in the current issue of its in-flight magazine, their president is calling for government subsidies for the airlines. He needs subsidies, given the way he seems to run his airline. Maybe I’m wrong, but I haven’t heard SouthWest, JetBlue and Virgin asking for government subsidies.
  • And, the most important lesson of all: Treat customers like your friends because in some ways they are even better than your friends. They are the ones, not your friends, that bought your house, put your kids through college and pay your salary. There is no downside to giving supervisors discretion to break rigid rules. So, a few people might scam them out of a re-booking fee. A few skittish passengers might re-book in the face of an uncertain storm that is making them anxious. So what?

Let’s all look at how we are treating customers — even those who might be making borderline unreasonable requests. But especially those who are sitting under hurricane projection models that are clustered more tightly than ever remembered by experienced meteorologists. Delta, if you have to have an obsessive, rigid rule, why not make it OK to switch flights the moment NOAA predicts that there is a greater than 50% chance of a hurricane hitting? Is that too much to ask? In your in-flight magazine, you are actively soliciting suggestions. Let’s see how you respond to this. Awaiting their comments below.

Word-of-Mouth Marketing isn’t just about getting satisfied customers to recommend your product

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Get a Free Copy of “The Secrets of Word-of-Mouth Marketing – Second Edition”

February 27, 2011 |  by  |  Secrets of WOMM  |  2 Comments
The Secrets of Word-of-Mouth Marketing - Second Edition
I have a gift for you, the readers of my blog: a free copy of the Second Edition of my book, “The Secrets of Word-of-Mouth Marketing.”

I’ve described a little of its history here.

It is a broad, systematic approach to word-of-mouth marketing. It approaches WOMM in principle and avoids getting bogged down in all the details of the tools of word-of-mouth marketing. if you don’t understand the basic principles, you’ll get overwhelmed, fast. That’s what’s happening in life in general and in marketing in particular.

I list dozens of broad categories of new media that have become popular since 2001, the publication date of the first edition. ALL of them contribute to the importance of word of mouth and, therefore, to our overload — to yours as a marketer and to your customers.

Not only are you and your customers in overload, we are in the middle of several simultaneous revolutions. So, I give you some advice for what to do when inside revolutions.

This book will help you know how to think about the wildly changing world we are living in.

The first person who I just gave a preview copy to just emailed, “This isn’t a book about word-of-mouth marketing, it’s a book about life.” I couldn’t have hoped for a higher compliment.

Click on this link to fill out the download form.

The simple, timely message wins — How to Make Your Message Simple and Timely

The No-Brainer Solution

I guess after the annual Super Bowl Advertising Debacle — in which advertisers try to show how cool they are by making “in” cultural references and edgy humorous skits that have nothing to do with product benefits — I’m on a clarification and simplification of message kick.

After cleaning up my own messages here and here, I got to thinking about the importance of simple messages. I wrote about it in the 2nd edition of Secrets of Word-of-Mouth Marketing. (My presumably left-wing NY editors insisted on taking out the stuff about the Tea Party, but they didn’t have any trouble with the stuff about Obama.). Thought you might be interested in the unexpurgated version if you are in the idea marketing business. And, oh, by the way, believe me, you are in the business of marketing ideas.

Eisenhower once said, Motivation is the art of getting people to do what you want them to do because they want to do it.”

Secret: To sell an idea, you must find out what people want most, down deeply, under the concrete.

You can’t find it by asking and taking the first answers. You have to probe deeply.. As Henry Ford once said, “If I’d have asked people what they wanted, they would have said faster horses.” Yes, but it would have given him the opportunity to ask a “dumb question,” “Yes, but what would faster horses mean for you?” You have to identify the real desire.

Then, you have to show them how getting it is more important than clinging to and defending some of their most cherished beliefs, such as the idea that the horseless carriage is an infernal machine sent by the devil.

That’s how Obama sold Hope and Change. Those people who were willing to take a chance on him gave him a chance because they so desperately wanted something different, almost anything different. [It was a simple, elegant message, at a time of despair and dissatisfaction.] That message triumphed over a mushy Republican message that I can’t even summarize, and nobody else could either — hence the lack of word of mouth.

That’s why the Tea Party arose soon after, appealing to Independents and Democratic and Republican segments with a simple, brilliant message of “Smaller Government, Lower Taxes, Less spending.” Everyone got it. You either believed that we were on a disasterous spending binge or you didn’t. The Tea Party refused to get involved in any other issues, leaving that up to the individual candidates to sell locally (simplicity). They will probably win big (They did. This was written in the summer of 2010) because it reflects what people want, in an elegantly simple message. Conventional wisdom is that its popularity was due to “anti-incumbency,” but it’s much more profound than that.

People are willing to change their beliefs when a basic need — in this case their children’s and their own financial security — is threatened and they are presented with a clearly stated solution, and they get the social, word-of-mouth support that is enabled and magnified by the Internet.

Interestingly, one involved a strong central leader, the other the lack of a central leader. For Obama, it was a central person who was unique and spectacularly articulate enough to spark a WOM firestorm over a couple of simple words, “hope and change,”  that summed up people’s frustrations and aspirations.

For the Tea Party Movement, it was also a simple idea, “smaller government, lower taxes, less spending, and the lack of an identified leader that made it possible.

Both tapped into a basic need, and got the word of mouth going in a unique way.

Both illustrate what a simple message at just the right time can do, especially in the Internet Age.

The entire Middle East seems like it’s about to join Yemen and Egypt as the simple American idea — that we seem to keep forgetting — spreads: We don’t want to be told what to do by “rulers.” In other words, liberty and freedom, as rights inherent in individuals, not granted by governments, monarchs or other gangs.

I’m sure you have heard of “flash mobs.” People might decide to show up at a store or an intersection, all at the same time, and swamp all available space. Now, a whole country or even the world can become a flash mob — and they don’t even have to wait for an election.

The lesson for you is the power of the simple, consistent, repeatable, timely message.

My message in the Age of Overload: Ease the decisions. Make your product, service, and ideas a “no-brainer.”

How? Stay tuned. What, you don’t have a subscription? Sign up, free. See, I made it easy.

The Super Bowl Commercials Teach Lessons in How Not to Advertise

The day after the Super Bowl, I’m still recovering from the commercials. Is it my imagination, or do they get worse every year? The unavoidable conclusion is that these advertisers and their agencies have no idea what advertising as all about. It was a mélange of nostalgia, obscure cultural references, borrowed interest, and non-product-relevant humor. Ironically, consumers constructed the highest-rated ads, not professional advertising agencies.

Secrets:

The purpose of any media is to reach people and use its unique characteristics to increase product sales. The purpose of advertising — with rare exceptions — is to dramatize the unique benefits of the product in a memorable and persuasive way that causes sales increases.

The Super Bowl is no exception, even though its ads have to compete with Super Bowl party conversation, food and drink, bathroom breaks and the competing emotions that come from rooting for the winning or losing team. So, yes, Super Bowl ads have to be off the charts on the attention-getting factor. This, and their astronomical prices, puts them in a class by themselves.

But none of this absolves the advertiser from the fact that the advertising needs to be about the unique advantages of the brand.

As I look over the list of the ads, from the idiotic USA Today Super Bowl Popularity Contest, I only remember ONE ad that talks about a brand advantage: The Verizon ad, which highlights its superiority in making calls.

The reason that advertising popularity contests are idiotic is that the purpose of an ad is not to entertain. It’s to ultimately sell product. This can be done indirectly, such as by enhancing the image of the product, or directly by talking about product advantages.

When I see a charming ad like the VW borrowed interest Darth Vader ad, I’m vastly entertained. But until someone shows that entertainment causes product sales, I’m amused but skeptical.

On the other hand, when I see an ad about the Ford Focus, which tries to gin up interest in a rally they are running, I think, “When you have nothing special to say about the car, run a rally.” It’s a dead giveaway that they either have a me-too car, or an incompetent advertising agency, or both.

As I’ve written elsewhere:

Before the golden age of advertising, people just put drawings of the product in the mass media, without any benefit statements or even descriptions. Then, advertising hit its stride and discovered its true strengths: bringing dramatizations of the unique benefits of the product to the masses. It was “salesmanship in print” in the best sense. It zeroed in on the most beneficial, unique aspects of the product and dramatized them in an entertaining way that got attention. At least, the best of it did. Then, the side show took over the circus. Most of it — to this day — gave up dramatizing the benefits and went for image instead. “Sell the sizzle, not the steak” became the rallying call for the hypemeisters. Advertising lost its way and just tries to make an intrusive impression, confusing getting attention with fundamental persuasion. Advertising is now judged by its entertainment value rather than its persuasive results. For instance, after the Super Bowl each year, there are many published polls naming the commercials voted “best” by viewers. So, you can win “best commercial” and go out of business because the commercials didn’t cause any sales, as 17 out of 18 of the Dot.com companies did in 2000.

Advertising that calls attention to itself — instead of something related to the product — almost never works. Advertising history is filled with examples. Many of them won awards. But the products failed.

I thought you might be interested in reading the section dealing with the Dot-Com Super Bowl, from the 2nd Edition of The Secrets of Word-of-Mouth Marketing, about to be published in March of 2011.

The Dot-Com Super  Bowl

On January 31, 2000, at the height of the dot-com boom, about a dozen dot-coms aired 30-second commercials during Super Bowl XXXIV at a cost of $2.2 million each, the entire marketing budget for some, in the hope that—with hundreds of millions of people watching—they would put their unknown companies on the map and establish a corporate identity. I was appalled and publicly called it the worst case of advertising agency malpractice I had ever seen. Either their ad agencies knew better or they should have. In either case, the agencies were, in my opinion, negligent.

The dot-com bubble burst soon after. The Super Bowl advertisers found that they could not establish a corporate identity in a 30-second TV spot. They found that they could get everyone talking about their quirky commercials all right, but that wasn’t the same as getting people to rave about their products’ benefits. With one or two exceptions, all the advertisers on that Super Bowl went out of business.

It became known as the Dot-Com Super Bowl and, in many people’s minds, it not only marked the end of the dot-com bubble, it marked the beginning of the end of the Old Marketing, perhaps symbolized best by the pets.com sock puppet.

Fortunately, the “too big to fail” mentality hadn’t caught on yet, so the dot-coms were allowed to “creatively destruct.” What nobody realized was that the dot-coms, ironically, were using the old media to sell the new media. Heck, they were the new media!

So, if you’re going to advertise, at least keep your eye on the ball: emphasize your unique benefits, in a dramatic, entertaining way. And only do it on the Super Bowl if you have a product that most of the billions of people watching can use. Don’t worry if people discuss it in the social media. Measure the effectiveness of ads — and any other marketing efforts — on trials and sales.

Possible duplicate posts and confirmations

February 1, 2011 |  by  |  Secrets of WOMM  |  No Comments

If you are receiving this blog via email rather than an RSS feed, you may get duplicates for a short time. Please accept my apologies. I’m switching from FeedBurner to AWeber, so you may get some emails from both. If you do, please look at the bottom line of the email. If it says Google, please just hit the unsubscribe link in the second line from the bottom. The one you want to keep is the one that says AWeber at the bottom.

You might also be asked to re-confirm by clicking on a link. Please do so to keep receiving my blog. The confirmation is because AWeber told me that confirmation was unnecessary, then sent out some anyway. Nothing’s easy. Thanks for your patience.

The good news is that I’m going to be sending you a link to a free copy of the second edition of Secrets of Word-of-Mouth Marketing, as soon as I get the web forms straightened out.

Amazing and Moving Example of Word-of-Mouth Explosion

Watch these YouTube videos for an amazing, poignant example of how word of mouth, passed on from a social networking web site exploded into a national exposure (13 Million YouTube views as of this post!), got the man national fame, a job and a house, in a matter of a day or two.

I won’t say “Went Viral.” It was an explosion, not a viral spread. See previous post on the Viral Marketing Myth

YouTube – Raw Video: Homeless Man’s Voice Gets Natl Buzz


YouTube – (HD) Ted Williams, New CBS interview – Homeless man with golden radio voice


YouTube – Ted Williams Reunites with Mother after 20 Years

[CBS does not allow embedding into a blog. Click above to go to YouTube to view it there.]

The Viral Marketing Myth: Mea Culpa

January 2, 2011 |  by  |  Secrets of WOMM  |  No Comments

[Excerpt from 2nd edition of Secrets of Word of Mouth Marketing — April, 2011]
Modified slightly for blog post

Our understanding of the spread of word of mouth was helped in the early 2000’s by comparing the spread of ideas to the spread of infectious diseases, specifically viruses. It was a metaphor that both illuminated our understanding and obscured some important properties of word of mouth.

Until word-of-mouth marketing, all marketers knew that advertising, salespeople, and the rest of traditional marketing based on the broadcast model increased exposure of their product or service arithmetically. If 1,000 people a day were exposed to the product, after 22 days, 22,000 people would have been exposed. Exposure was, and still is, measured in cost per 1,000.

Richard Dawkins, Malcolm Gladwell, Seth Godin, myself, and many others popularized the idea that word of mouth spread new ideas like a viral epidemic. It seemed to explain the sudden, often overnight, spread of ideas. It caused a paradigm shift.

Here’s how we thought it worked: “Carriers” are at relative equilibrium, with about as many people getting “infected” as recovering from the disease. So, let’s say 1,000 people have the flu. They come in contact with 100 people a day, but they because they don’t touch or sneeze on all of them, they infect only 1%. So, another 1,000 people come down with the flu, which runs its course with the original 1,000, who are now cured (or dead) and cease to infect anybody else. However, the disease then finds its way to a denser or faster moving population. As a result, people are coming in contact with 200 people a day, so the spread of the infection increases to 2%. Now 1,000 people infect 2000 people, who infect 4,000 people, and so on. At that rate, if you do the arithmetic, the whole world will be infected in 22.5 days. At only a 2% infection rate!

It turns out that 75 percent of the world’s population would become infected on just the last two days! Even more amazing, on the last day, as many people will be infected as on all of the proceeding days put together. So, at the end, the spread of the disease appears explosive, as though it came from nowhere. Thus, an increase in the rate of infection from one to two percent can cause an infection to go from little growth to worldwide impact in 22 days! This leads us to believe, by analogy, that if you can get people to spread the word just a little more, the message will spread like a virus and take over the world. This idea of “Ideaviruses” reaching “Tipping Points” and spreading like infections was very compelling. This idea itself “went viral” and infected (actually poisoned) our thinking.

It obviously seemed to solve the mystery behind a common phenomenon of modern life. It fit the narrative. It explained the sudden adoption of ideas, trends, products, practices, and news that seemed increasingly to come out of nowhere to suddenly appear everywhere. The idea of the exponential, or geometric, growth model, and its relatively low initial numbers that seem to explode at the end of the cycle seemed oddly compelling. It would certainly seem to explain what is happening.

In fact, it’s a pretty powerful fantasy. As my friend Bill Cope used to say, “It’s approximately true.” In other words, it’s false.

The word of mouth pioneers—myself included—almost got it right (which is a nice way of saying we were wrong). Looking back on that heady period, I now realize that we were held hostage to our own viral metaphor. If we escape from the trap of thinking of word of mouth as spreading like a viral infection, we will unlock some pretty amazing secretss that will take us to the next level, much to our practical advantage.

My Advanced Experimental Design professor, Herbert Birch, MD, PhD, used to say, “Unless you understand the underlying mechanisms, you will think the light switch turns on the lights. It does not. The light is produced by the heat produced by the resistance to the electricity flowing through the filament. The switch doesn’t turn it on or off. It just breaks that circuit or recompletes it. Look for the mechanisms underneath what you’re seeing.”

The virus is like the light switch. It’s just a metaphor for a mathematical pattern, exponential growth—one that makes the pattern real to us. I thought it was a pretty compelling metaphor at the time. Most marketers still do.

So, let’s try to look at several issues here. How fast does word of mouth spread? How fast can it spread? By what mechanisms and patterns does it spread? Where does the viral analogy break down and obscure our understanding? How can we trigger word of mouth? How can we slow it down when it’s undesirable, or speed it up to our advantage? What can we do to intervene? (That last one is the purpose of all books on word-of-mouth marketing, indeed, the whole word-of-mouth industry.)

First, the Pattern

Consider the following.

Step 1: 1,000 people hear about a Cool New Thing.

Step 2: Each, in turn, tells 25 other people. Now, we’re up to 25,000, plus the original 1,000.

Let’s make it real. These aren’t viruses, after all; these are people and ideas.

Nor is this higher mathematics. If I can understand it, you can follow along. We know that sneezing does not spread word of the Cool New Thing, so we must ask: Who are these people and whom have they called, texted, Tweeted, emailed, or buttonholed at work or at school to discuss the Cool New Thing?

First, the initial thousand are probably an assortment of people who are at the front of the adoption curve. They are the innovators and early adopters. Some are probably influentials whom the company spent a lot of money identifying. But others are slower to adopt; they are the people who just happened to hear about the Cool New Thing by accident. Maybe it was shown to them by their daughter’s boyfriend or a seatmate in an airplane or the aunt of an employee who came to dinner. Still others are experts, mavens, infomediaries, newsies, and people with very large numbers of so-called “friends” on Facebook and Twitter. Others are neither plugged in nor particularly influential. These days, even a hermit (perhaps especially a hermit?) has 25 people he wants to email or Twitter about the Cool New Thing. Everyone focuses on these initial

1,000 transmitters. But there isn’t a lot to learn from them except their variety.

Let’s look at the 25 people they each tell about the Cool New Thing. Now, first of all, 25 is not a lot of people. Who are these 25 people? This is important. They aren’t random, as are viruses. These are people. They are the people whom the original people chose to tell about the Cool New Thing. No disputing that.

“Why that person and why that product?,” you ask. You know just as well as I do because you do it all the time. They’ve made two choices here.

1.  The product is Cool enough and New enough to tell people about.

2.  The particular person is someone who should hear about it.

Set aside for a moment how something crosses the “cool-enoughto-talk-about” threshold. The original people are going to tell people with whom there is a “fit.” Whom would you tell? People who would benefit from hearing about the Cool New Thing and who would probably appreciate hearing about it. People who may benefit from your natural inclination to be helpful to others; people who will think all the better of you for having told them; and—I think most important—people for whom the act of telling them will make you feed good about yourself. You’re not going to share your new information with people who have no use or appreciation for it, people about whom you don’t care or people who won’t appreciate your informational generosity.

I’m trying to make as real as possible the obvious “Secret” here: you share with people for whom the information is relevant and who will appreciate your telling them. And, you don’t share with people for whom the information is irrelevant, unless you’re a crashing bore.

Okay, so there is a good match between the Cool New Thing and the handpicked 25,000 people who hear about it. In fact, the match is probably a little better than it was for the original 1,000, who found out about it accidentally, randomly, or impersonally.

So, now you have 25,000 people who are probably a little more interested and excited than the original 1,000. They have a better understanding and appreciation of the Cool New Thing. They’re likely more knowledgeable. It will benefit them more, so there are more emotions around it, more excitement, admiration, and amazement.

The result: their message about the Cool New Thing is probably more articulate and emotionally engaging than the original message they received.

So the old game of “telephone” (AKA “Whisper Down the Lane”) you may have played in psychology class or with your friends taught you something that was misleading. You played it with an inconsequential message that was needlessly detailed. The message disintegrates when it’s a meaningless rumor. But when it has focused, simple, relevant, involving content that the person is interested in getting right, the receiver asks questions actively. In “Whisper Down the Lane,” people are passive.

So, the content of the information tends to build in quantity and quality and is expressed more articulately, emotionally, and enthusiastically. It reaches and is spread by people who care about the content. Now, what’s going to happen? These people are probably going to tell more than 25 other people and tell it more clearly, more meaningfully, more passionately, and more persuasively.

SECRET

The quality,  relevance, and enthusiasm of the information passed  on  through word of mouth can,  under some conditions,  actually improve through successive iterations of transmission. In addition, the ability of people  to transmit   it to the right people  often improves.

SECRET

Word of mouth is what I like to call a self-improving system.  Treasure it. There aren’t too many in this world.


Here’s what happens next in our quality and quantity journey,

Step 3: Now suppose each of these people pass the information to 50 people, on average. Don’t forget, they are much more motivated to do so. They will embellish and improve the message, perhaps adding video. Certainly they will apply their own accumulated experiences, thereby offering more than abstract facts.

Do they know a large enough number of people to select 50 for whom the message is most relevant? Of course they do. These are the people at work or at their special interest clubs, who are reading comments on websites, in their schools, from their email contacts, on their forum, and so on. None of them are hermits. Maybe they spread the word by writing articles in their association’s newsletter or on a blog or other news sources. When we say these 50 are selfselected, it means that they respond to a headline because they see Cool New Thing does awesome stuff in the headline. They’re really jazzed. They’re abuzz. Maybe they’re frenzied, like people outside an Apple store the day of a new iCoolNewThing launch, reinforcing one another’s enthusiasm. (Full disclosure: I’ve done this twice. Embarrassing, but true.)

Those 25,000 people have now each told 50 people. Wait, while I get out my calculator. That can’t be right, but wow, it is. The improved message has now reached 1,250,000 handpicked people in only three steps.

Step 4: If these 1,250,000 improve it and each pass it along to 75 people, the total number of people who have now received the message is 62,000,000.

Step 5: If these 62,000,000 spread it to 100 people each, the total is now a staggering 6,250,000,000.

This is more than the adult population of the world!!!

A more accurate metaphor to word of mouth than viral growth is the exponential growth of a nuclear chain reaction. Both word of mouth and a nuclear chain reaction need to start with the right conditions, that is highly refined fissionable material. They need critical mass, sufficient density, and a jump start. Both have an accelerating growth rate and are self-sustaining reactions that feed on themselves. Both have growing energy, change form in the process, and permanently alter things. If not, it’s a dud.

SECRET

Word of mouth isn’t like a virus and doesn’t  spread like one.  It’s a nuclear explosion or a dud.

I know that I’ve made several false assumptions for the purposes of easification. But, when you take them into account, it strengthens the case:

In fact, one person will tend to get many different exposures to the same message, from many different perspectives, and from many different people. It’s not like the same advertisement repeated endlessly as it interrupts her favorite TV program. So, a lot of people hear all of their friends raving about their experiences with the Cool New Thing or see it being used (the most persuasive way of “telling” someone about a product, since actions speak louder than words.) When multiple friends pile on the message, people are tens of multiples more likely to purchase. That’s why the Zune never had a chance against the iPod, even if it had been well designed. iPads, iPhones, iWhatevers are Apple’s to lose, not for another company to take away.

Adding a Killer Ingredient: Network Effects

“Network effects” is a term in economics. It means that some things are made more valuable if more and more people use them. Not that the items have more uses, but rather that more people are using them.

For example, your neighborhood park is made less valuable as it becomes more and more crowded. But some things become more valuable. I learned of this effect firsthand around 1975 when I purchased our company’s first fax machine, the “Xerox Facsimile Telecopier.” Although it was an unwieldy, rotating drum that enabled the transmission of low-quality copies of documents, it made projects so much easier. A client made us get the machine, and it made our workflow so much more efficient that we practically required our clients to get it. The point here is that it’s of no use unless both parties have one. And, it’s so valuable that you want everyone else to get one. That, in turn, increases its value to you. So, you have a strong motivation to “push” its adoption. This isn’t just a Cool New Thing that you’d like other people to have, a situation where it may make no difference to you if they get it. This is a case where if they get it, your life (and theirs) is improved.

It doesn’t do me any good if I throw an auction and nobody comes. So, I’m going to tell everyone who’ll listen about eBay, and I’ll even help them sign up. The same is true about PayPal, LinkedIn, Twitter, Facebook, email, blogs, and the next twenty things that manage to build in network effects.

That’s the Network Effect. It’s now called the “Viral Feedback Loop,” newly discovered by the technology sector, but it’s been known for a long time. So, now we have word of mouth passing along information selectively in a highly motivated manner.

So, mathematically, we have something that appears to be more powerful than exponential growth, which is a population multiplying by a constant factor. We have a multiplying factor that is increasing, maybe even multiplying itself. I don’t know if there is a mathematical name for this phenomenon; non-mathematicians call it an explosion.

Even if I’m wrong and it’s “only” an exponential growth rate, it’s still amazing. I prepared Table 3-1 when I believed the growth rate was exponential. It always gets audible gasps. And, this is underestimating the rate. Table 3-1 shows the results of 25 people telling 25 different people, who do the same, in turn, six times. Here’s the result

Table 3-1

Exponential Growth Rate

1st Wave

25 people  tell  25 each  =

625

Neighborhood

2nd Wave

625 x 25 =

15,625

Town

3rd  Wave

15,625 x 25 =

390,625

City

4th  Wave

390,625 x 25 =

9,765,625

NY  City

5th  Wave

9,765,625 x 25 =

244,140,625

Approximate U.S. adult population

6th  Wave

244,140,625 x 25 =

6,103,515,625

Approximate world population

From 25 people to the entire world in six steps! As we’ll see, people have a much higher talking and listening threshold, so information spreads faster than viruses. If they do not think something is worth talking about, they talk about something else. Economic theory is something I like to talk about, but teenage girls like to talk about clothes and boys. There’s little danger of any of my memes infecting them. But try to stop each of them from texting 100 people a day about the latest clothing fad, with videos included.

So, word of mouth tends to be either explosive or unworthy of conversation. If it doesn’t explode, it will likely fizzle. Given the table above, in which the 25-people multiplier is probably a serious underestimation, the recently reverified “six degrees of separation” shouldn’t be a surprise. You really can get from just about any person to any other person on the planet in six steps or less.

Therefore, let’s stop using the term “viral” as a synonym for “runaway word of mouth.”

“Viral” leads 2011 List of Banished Words — Hooray!

December 31, 2010 |  by  |  Secrets of WOMM  |  No Comments

A university has just put “Viral” at the top of their 2011 List of Banished Words.

Bravo!

Now, let’s ban “Viral Marketing” from the marketing lexicon

Usually, when people talk of the “viral” spread of anything, or “viral marketing,” they have no idea what they are talking about. They just mean that something got popular. When they do know what they are talking about, as in the authors who speak of Viral Marketing, they are flat out wrong.

The next edition of my book The Secrets of Word-of-Mouth Marketing, due out in April of 2011, goes into some detail about how the infectious disease analogy — viral marketing — that we all spread 10 years ago is not correct and obscures a deeper understanding of how word of mouth spreads.

Excerpt from second edition of Secrets of Word-of-Mouth Marketing to be published April, 2011, explaining why “viral marketing” is a misleading metaphor.

Word-of-Mouth Campaign Effectiveness is Impossible to Measure by Conventional Means

November 24, 2010 |  by  |  Secrets of WOMM  |  No Comments

The Silverman Uncertainty Principle:

You can’t measure your word-of-mouth campaign with a conventional control group design, because the purpose of word of mouth is to set off a chain reaction of second-order word of mouth that reaches everyone quickly. In experimental design, it is called “contaminating the control group.”  You can’t use a pre/post design because you can’t control for the other variables without a control group, which you can’t use. Also, the second order effects are much more powerful than the initial exposures. Your boss is going to hit the roof over this.

The Problem with Word-of-mouth Measurement

Word of mouth is the only marketing method that can’t be measured accurately. Even more disturbing is that the more effective the program, the more likely any attempted measurement is going to be invalid. That’s a serious problem, because most companies now require that you show a substantial return on investment (ROI) for any marketing method you use.

Don’t get me wrong. You can plot the number of mentions of your product on the social media when compared to your competition, but that’s not the same as measuring the bottom-line effectiveness of a particular word-of-mouth campaign. That campaign isn’t the only thing that’s happening in the world. You can’t use a control-group design, for instance, to measure the purchases of people who attended your Webinar. The major effects may be on friends of friends. In most cases, that can’t be tracked back to its source.

This  lack of measurability goes contrary to common sense. Everything else is measurable, so it seems obvious that word of mouth must be measurable.

More to come on this, but I welcome your comments.

An interesting word-of-mouth technique shows the darker side of word of mouth

First, I have to make a disclaimer. I am not advocating the following, I am reporting on it because it is interesting and illustrates several important properties of word of mouth.

Let’s call it hoax marketing:

Here’s the way it works:

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How my interest in marketing started

October 16, 2010 |  by  |  Marketing - Gen'l, Secrets of WOMM  |   |  No Comments

My interest in marketing started one day in my father’s drug store. I watched a Camel Cigarette salesman repeatedly approach customers who had just bought a pack of the largest competing brand, Chesterfield.  He had pushed a Camel and a Chesterfield cigarette through two holes in a 3 x 5 index card, so that they couldn’t see the cigarettes’ brand names. He asked them to take a few puffs of each and tell him which they liked better. Most of the Chesterfield smokers said that they preferred the taste of the one that turned out to be a Camel. He showed them that they had chosen a different brand, Camel, over their regular brand. They were shocked, much to my amusement. It looked to me, at about the age of 12, like a pretty good joke on them. But then came my turn to be shocked. He offered to exchange the cigarettes they had just bought for his brand, whose taste they had just proven they preferred.

Most of them stuck with their regular brand!

I saw another salesman do a similar comparison test with Breyer’s Ice Cream. Same results. Even though they preferred Breyer’s, they walked out with their regular brand. “Why?” I wondered.

At the same time, I was learning to practice the art of slight-of-hand.  As I mastered more and more sophisticated magic tricks, I realized that people saw what they wanted to see, no matter what the evidence said. Why?

I was hooked.

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Revised Table of Contents—Secrets of Word-of-Mouth Marketing, 2nd Edition

Here’s a much more manageable table of contents of Secrets of Word-of-Mouth Marketing: Marketing in a World Where People Only Listen to their Friends, 2nd Ed. April of 2011 is the target publication date. But you don’t have to wait. My deal with my publisher is that I can use modern word-of-mouth marketing techniques and post the contents of the book online. If you want to carry it around and make marginal notes, you’ll have to buy the paper book or e-book when it comes out.

The Secrets of Word-of-Mouth Marketing, 2th Edition

Prologue: The Calf-Path

1.   Why This Book—and Word-of-Mouth Marketing Today—Is Different

2.   Changing Your—and Your Company’s—Way of Looking at Things

3.   The Systematic Approach to Word of Mouth

4.   Dominating Your Market by Easifying the Customer Decision Cycle

5.   How to Use Word of Mouth to Easify the Decision Process

6.   The Decision Process

7.   The Nine Levels of Word of Mouth

8.   Five M’s to Live By

9.   Researching Word of Mouth

10. Creating the Content

11. Delivering the Message

12. Electronic Word of Mouth

13. Six Steps to Harnessing Word of Mouth

14. Viral Marketing…Maybe

15. Constructing the Ultimate Word-of-Mouth Campaign

16. Which Methods Work Best for What?: Word-of-Mouth Checklist

17. Your Word-of-Mouth Toolkit

18. Managing—and Leveraging—Negative Word of Mouth

19. Word-of-Mouth Marketing for Specific Audiences and Circumstances

20. Tips, Techniques, and Suggestions That Will Make It Easier

21. Word-of-Mouth Measurement

22. How to Fight Word-of-Mouth Fraud and Other Shady WOM Practices

Appendices

Recommended Reading

The New Media

The new media are not just incremental improvements. They are fundamentally new ways of doing things. They are supplanting the old media because something basic is changing. So, High Definition TV is only a quality improvement until it becomes so realistic that it changes people’s behavior. For instance, people actually stay home and invite friends over to watch a current movie via Blue-Ray DVD because it’s actually a better experience for them than going out to the movies: better video, ability to stop, better food, cheaper popcorn, ability to talk, etc.

Notice that almost every one of these increases both overload and word of mouth in some way. Some are actually WOM media, some stimulate WOM, and others force it.

It’s hard to believe that the following media emerged that weren’t even mentioned in the first edition this book because they didn’t exist or hadn’t caught on yet:

This isn’t a complete list, it’s in no particular order yet, and the categories are fluid and overlapping. It’s just to give you a flavor of how much we’ve been hit with in the last 10 years.

Media Examples, comments
Blogs The whole world of Twitter, WordPress, Technorati, Blogger, TypePad, etc.
Rating & Review sites Zagat, Yelp, Opentable, Tripadvisor, , C-net, hotels.com,, etc.
Social Networking Facebook, Twitter, Linkedin, Myspace
Social Bookmarking (Digg, Diigo, Stumbleupon, Reddit)
Mass Collaboration Open Source Movement, Google Wave, Google Docs, Various Microsoft Collaboration Tools
Wikis WikiPedia, WikiHow, WikiNews…
Remote meetings GoToMeeting, Adobe Connect, etc.
Webinars, Remote Courses, etc. University of Phoenix (current enrollment: 240,000+), 1000’s of private courses, etc.
Texting, Video chat ICQ, iChat, Jabber, Buzz, etc.
RSS feeds, Newsreaders, News aggregators, Mega News Sites “Reverse Browsing”: Google Reader, Netnewswire, Feedblitz, Feedburner, etc.
Customer-generated Media (CGM): YouTube, Flickr, …
Recommendation Engines Netflix, Jinni, IMDb, Rotten Tomatoes, Last.fm
MP3 players iPods, Podcasting
500+ Cable, Fiber Optic and Dish Channels CableVision, Fios, Dish Network
Downloaded TV Episodes iTunes downloads, etc.
Web TV viewing Hulu, Network web sites
Flat Screen TV, HDTV, 3-D TV and Movies IMAX, home screens
Universal Remote Controls Important means of skipping commercials, switching to other content. Lets people pause and engage in WOM.
Video Games

Game Boxes

Video Boxes

Bigger than Movies and Music combined!
Microsoft X Box, Wii, Playstation
TiVo, Apple TV, Roku, Slingbox
Smart Phones iPhones, Android Phones, etc.
Tablets iPad, etc.
Mobile Apps 250,000+
Netbooks
Web 2.0 All customer-provided content sites
Shareware, donationware, etc. Variably priced, payment optional, etc.
Filesharing Protocols and sites Napster, LimeWire, Pirate Bay, BitTorrent, Magnet Links, etc.
Portable, High-Capacity Drives USB Flash Drives, High Capacity portable drives
Music/Movie/Video Downloading services iTunes Store, Apple TV, NetFlix,
E-Books & Readers Kindle, iBook, Sony Reader, Zook, etc.
Digital Cameras, Video Complete conversion to digital from film, pocket cameras with video.
Digital Photos and Video Picassa, Flickr, Lightroom, iPhoto
Web Apps Google, Google Apps, Microsoft Office Web Apps etc.
Mass Collaboration, Hive Mind
WOM agencies Unknown in 2000, too numerous to mention now.
Advocacy Networks BzzAgent, Tremor
Auction Sites EBay (in its comparative infancy in 2000)
eCommerce, Electronic Payment Systems PayPal, Google Checkout, millions of web sites
Classifieds CraigsList
Very Fast Broadband and Broadband Wireless
App phones IPhone, Android, etc.

With hundreds of thousands of apps, many designed to locate products, ratings, comparative prices, etc.

VOIP Skype, Vonnage, etc.
Ubiquitous Network Access 3G, 4G, WiFi, WiMax, VPNs
Cloud Computing: unlimited storage & processing on demand. Amazon EC2, Google, etc.
Geotagging
Google Earth
Google [Everything)
Content Management

Information Management

Information Architecture

Knowledge Management

Drupal, Joomla
Word of mouth agencies




…to name only broad categories. Some of these categories have hundreds to thousands of instances: Thousands of eBay merchants, thousands of rating sites, travel sites, mash-ups, etc.

Remember when we all had AOL accounts, brick-like cell phones, dial-up modems and used Yahoo as our search engine? That was right around 1997.

Gone — or almost gone — are faxes and faxback, hotlines, pagers, classified advertising, newspaper stock listings; physical dictionaries, encyclopedias, thesauruses; physical recording media such as floppy disks, records/cassettes/CDs/DVDs (almost), PDAs, photographic film, simple bulletin boards/forums, dial-up modems, Physical Maps, Traveler’s checks, telegrams, travel agents, pay phones.

Soon to be obsolete, or nearly so: Newspapers and magazines (in the paper forms we know them), paper books & bookstores, conventional libraries, handwritten prescriptions, land lines, paper money, major broadcast TV networks and cords connecting anything.

Notice that the new arrivals are almost all things that increase our interactivity and connectedness, and, thereby, our overload. They also increase our ability — actually necessity — to engage in word of mouth.

So, the Secrets you can learn from this are:

Involvement and collaboration is what it’s all about now.

The new media have brought a whole new level of overload.

Secrets

A teacher once observed a child having trouble zipping up his jacket. She said, “The secret is to put the straight part all the way in, hold it in with one hand while pulling on the tab with the other hand.”

The child asked, “Why is that a secret?”

In this book, “Secrets” means key principles not generally known, not things people don’t want you to know.

The central purpose of this book is to lay out the secrets — key principles — of Word-of-Mouth Marketing, as distinct from all the details of the techniques. There are so many of them now that it would take 1000+ page book that would be instantly obsolete. By concentrating on principles, this book will help you even think about  the things that haven’t been invented yet!

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.