Executive Summary

Word of mouth marketing is becoming more and more a vital part of a business’s marketing strategy.  Conventional marketing through television ads and billboards are becoming less effective and due to technological advances in the near past, word of mouth travels much faster than it did before.  Word of mouth marketing incorporates the use of people talking into effective buzz talk that stimulates sales.  With word of mouth marketing, you try to dictate what others will say about your product or service to their friends. 

There are four rules that marketers using this strategy need to remember.  Rule one is to be interesting because if there is nothing to talk about, then no one will talk about you.  Rule two is to make it easy.  If the message that you want people to talk about is too long it will either get distorted as it is passed along or it simply will not get passed along.  Rule three is make people happy.  Happy customers are your best advertisers, because if they leave your business in a better mood than when they showed up then they will be much more inclined to talk positively to their friends about you.  Rule four is to earn trust and respect.  This to me is the most important of the rules because if someone does not trust you they will not use your product or services, and they will pass along negative feedback about your business. 

Word of mouth marketing is a much more complicated business tactic than it seems.  Word of mouth sometimes does not carry far or fast unless it is pushed by the business marketers.  The 5 T’s of marketing explain elements to exploit to accelerate the spread of positive word of mouth.  Talkers: Who will tell their friends about you? Topics: What will they talk about?  Tools: How can you help the message travel?  Taking part: How should you join the conversation?  Tracking: What are people saying about you?  If a word of mouth marketing strategy is going to work, it will have the five T’s planned out. 

There are six big ideas outlined in the book about things to think about when planning your word of mouth marketing strategy.  One, consumers are in control- get used to it.  Marketers no longer decide what is said about a company simply through ad campaigns, and with technology the way it is now, anyone can say their own opinion for the whole world to see.  Two, marketing is what you do, not what you say.  Marketers can say all they want to make their company look all good and rosy on the outside, but eventually through word of mouth, the truth will always surface.  Three, the permanent record: The internet keeps a permanent record of everything that happens now, so bad word of mouth will be here to stay.  Four, honesty is the essence of word of mouth.  The truth will always rise to the surface, so being honest with your shortcomings will be the best policy to keep.  Five, the math of customer: Keep your charges and fees up front and honest, because if you have hidden fees that may make you a little more money in the short run, it will severely hurt you in the long run with negative word of mouth.  Six, word of mouth marketing makes more money.  Word of mouth is free advertising, and it is the most effective marketing strategy anyway.

Not only do you need to know how to stimulate good word of mouth, but it is important to learn how to handle bad word of mouth also.  Maintaining a good image is very important with marketing, because like we stated earlier, trust is an important factor.  If everything is handled properly and carefully, word of mouth marketing will make a business much more profitable.

The Ten Things Managers Need to Know fromWord of Mouth Marketing

1.            Word of mouth marketing is giving people a reason to talk about your stuff, and making it easier for that conversation to take place.

2.            Word of mouth has been with us forever, but having the word marketing follow the phrase is what’s new.  With how technology is changing, businesses can now manipulate word of mouth to their advantage.

3.            Word of mouth marketing sometimes is not about marketing at all.  Great customer service makes people want to talk positively about your business.

4.            Offering customers incentives to spread word about your product or service is often a bad idea because people will feel weird talking about your stuff if they are getting paid for it.

5.            Overexposure often kills word of mouth because if everyone already knows about something, then they have no reason to talk about it.

6.            Word of mouth cannot be faked, and it simply will not work if the customer does not feel like they can trust the company.

7.            Success in marketing comes not from what you advertise, but from what you deliver.

8.            Happy customers are your best advertising. Make people happy and they will talk good about you.

9.            Maintaining an ethical and honest reputation is the only way a company will be successful in the long run.

10.            It is important to keep your business fresh and exciting.  If your product or services are buzzworthy to talk about, people will do your marketing for you.

Full Summary of Word of Mouth Marketing

The Essential Concepts

            What is Word of Mouth Marketing?

            Word of mouth marketing is everything you can do to get people talking.  Instead of business to business marketing, or business to consumer marketing, it is more along the lines of consumer to consumer marketing.  Word of mouth is a natural conversation between two real people. However, word of mouth marketing is all about trying to dictate what consumers will tell their friends about your product or service.  Word of mouth has been around forever, but recently it has been used as a marketing tool because of the new technologies present in today’s society.  Many consumers post experiences on their Myspace and Facebook pages about products which spread like wildfire.  In many cases, word of mouth marketing is not about marketing at all, but about providing superior customer service that gets people talking about your product or service.  There are four rules of word of mouth marketing described in the text.  Rule one is to be interesting, because no one wants to talk about something boring.  Rule two is to make it easy. The message that you are trying to get people to pass along has to be simple enough to not be forgotten.  Rule three is to make people happy.  If someone leaves your business in a good mood they will be more excited to pass on a good word.  Rule four is to earn trust and respect.  This is the most important rule to follow because if customers cannot trust you they will not talk good about your business.  Word of mouth marketing is a good strategy, but there are things to avoid also.  Giving prizes and awards for people to spread the word of your company often makes them feel “dirty” if they are paid to talk good about you.  Another word of mouth killer is overexposure.  If everyone already knows all about your company there is no reason to people to talk.  Above all else, a company should simply be honest and sincere with their services and products, and not go overboard trying to put on a good face. 

            Deep Stuff: Six Big Ideas

            Consumers are in control-get used to it.  The company’s ad campaign and reporters no longer tell the story of products.  Products and services these days are talked about by everyone that has used it, and that is what really controls a company’s following.  People do not simply tell one friend about their experiences anymore either.  It is often posted on the internet where millions of people see, and it is not a review by a professional, it is a review by a person just like you and I that have no stake in what may happen with the company.  Another big idea is that marketing is what you do, not what you say.  Advertising does not dictate how people feel about you.  They listen to reviews from others, and your street reputation dictates how people feel about your product or service.  If you say that you are something you are not, then that pushes people farther away also.  If a company advertises superior customer service, and customers find out that the customer service is not up to par, that will stimulate bad word of mouth for the company.  Something else to always keep in mind is the permanent record.  The internet will never let you forget your shortcomings, but when bad publicity strikes it is how you handle it that dictates what people’s reaction will be.  If a mistake is made, and it is handled appropriately, consumers will give respect to the company regardless of what went wrong.  Something else to remember is honesty is the essence of word of mouth.  The truth always finds a way to come out eventually.  In the world today word of mouth is such a big part of a company’s reputation, and it protects consumers from false advertising.  The math of customer satisfaction is an idea that can help with deciding which services should be free to your customers, and what to charge for. Although hidden charges and fees for special services may seem like a good idea for earning bonus cash from your customers, it may stimulate negative word of mouth. Finally, word of mouth marketing simply makes more money.  It is free, easier, and builds a stronger customer base.  The problem is a company really needs to focus on doing the right thing all the time to build positive customer satisfaction, and in turn positive word of mouth.

            Word of Mouth Marketing Manifesto

            We have talked about several important things so far about word of mouth marketing and how it should be used. There are 5 T’s of word of mouth marketing that are the elements to be remembered in order to have positive talk about your company.  Talkers… who are the customers that will be talking about your company?  Topics…what will these customers talk about? Tools… how can you help the message travel?  Taking part… how and when should you join in or not join in the conversation?  Finally, tracking… what are people saying about you?  Whether you see it immediately or not, these five elements are part of every word of mouth marketing success story.  In today’s world word of mouth marketing is not just an option in your marketing plans, but it is a necessity.  People will talk regardless of if you want them to or not, but whether they talk good or bad can be regulated by practicing the ethical and honest way to do business.

How to Do It

            The Five T’s in Action

            An important thing to remember about word of mouth marketing is that not every company has the same recipe for success.  Each company needs to develop its own practical word of mouth marketing plan that reflects their budget, and their limitations.  Also, each company needs to review the five T’s and develop a strategy for each that will benefit them the most.  Above all though, keep it easy.  Focus on the basics, and earn a solid reputation and initiate simple positive word of mouth with your company practices.  Find something simple but unexpected to do for your customers that will set you apart from your competition, and focus on your version of the five T’s and follow it to success.

            Talkers: Who Will Tell Their Friends About You?

            It is important to find the correct people to talk about your product or service.  When these people are found that you want to carry your message you need to make them talk about the right things, and keep them happy.  Talkers are mostly people like you and I.  If a celebrity talks good about a business our first reaction is that they are simply paid to talk about the product or service.  The people we listen to are our best friend from high school, or our next door neighbors.  Talkers are also not always big spenders either, just because people are not buying does not mean they are not talking.  I do not own a Lamborghini sports car, but I have expressed to my friends before about how beautiful and elegant the car brand is.  Recognizing good talkers is a key to a successful word of mouth marketing strategy.  Focus on customers that are passionate about your product, are a credible source of information to people they come in contact with, and have connections and opportunities to reach a large number of people with their word of mouth.  Talkers need to be fed information also, meaning that if there is nothing to talk about then no one will talk.  Keep things fresh and updated on the latest news of your company to keep your talkers jabbering about your work.  Finally, remember to say thank you to the ones that speak positively about you.  Thank your customers personally face to face when they use your products or services, and also thank them publicly.  Make recognition part of your program, and keep your talkers happy!

            Topics: What Will They Talk About?

            Your job in your word of mouth marketing campaign is giving the talkers something to talk about.  No one will talk if there is nothing to talk about.  Finding a great topic may come from an unexpected place.  The topic does not need to be some official marketing technique, but can be something silly a coworker says at the lunch table.  If it catches on and everyone starts talking about it, then it is a great topic.  Good topics are simple and easy to move along.  It should be something that you would say in small talk, for instance, maybe on the short elevator ride to your office with a coworker.  The topics need to stay fresh as well.  After a while a topic will lose its buzz, and people will stop to talk about it.  A company will be successful in the topics part of word of mouth marketing if they can locate good topics, create an entire campaign worth talking about, and become a buzzworthy company.  The main idea in choosing a topic is to steer away from what you could see as a headline in a newspaper or magazine, and focus on a small phrase you might say jokingly to your friend when you pass an advertisement billboard.

            Tools: How Can You Help the Message Travel?

            Word of mouth for a product is great by itself, but it will not simply walk out the door of your office or shop and instantly spread all around the nation.  You need to make it easier for the message to spread.  Remember that the internet is your most powerful tool, and it has changed the way word of mouth marketing is designed. Use this communication engine to your advantage to spread word of your product or service farther and faster.  Your web pages should be easy to spread so that people are stimulated to share what they find with their online friends.  If things are put into email format, someone can simply forward that email to all their friends.  However, the email is a tricky word of mouth tool, because if people receive spam emails about your product they may get angry about it and it could stimulate negative word of mouth.  There are several tools that can be used to stimulate talking from buyers.  Handouts to loyal customers, putting coupons in the package of a purchase, or putting together a honeymoon kit for first time buyers are all good examples of things that stimulate talk.  Customer reviews and testimonials are great tools because you have a volunteer talker and they have a topic.  Building a site with customer reviews on it is an easy word of mouth tool that is effective, but only if the correct steps are taken in the company itself.  Use all of these tools and more to help your message travel farther than simply neighbor to neighbor or friend to friend conversations.

            Taking Part: How Can You Join the Conversation?

            Participating in a conversation about your company is a touchy subject in my opinion.  It is very similar to if someone is talking good about you to your face. How do you act? What do you say? You do not want to sound over confident, but at the same time you want to take credit for what they said positive about you.  Also, what if what they are saying is negative? In this situation you do not want to get angry and say things you regret, and you would not want to be too quick or over the top in defending yourself.  These situations are the same as in the reputation of your business.  One thing you do not want to do though is to fail to participate at all in these conversations.  You want people to feel like they can reach you, but at the same time you need to be careful about what you say.  If people have nice things to say, a simple thank you may do the trick.  If people have negative things to say, work with them to fix the problem and try to keep the customer happy with your services or products.  With communicating with your customers and the public, it is important to use good manners and keep a positive reputation especially when responding to negative word of mouth.  For every person a happy customer talks to, an unhappy customer talks to five.  However, a formerly unhappy customer who is made happy tells ten people.  So there you can see that there is a large success margin to be had if all negative reviews are handled appropriately.

            Tracking: What Are People Saying About You?

            Listen to what the word of mouth is saying about you and learn from it. Companies spend more than seven billion dollars each year on marketing research.  People always want to find out what people are saying about them, but with a business you need to take the criticism and constructively work to make the problem better. There are many ways to track what people are saying, but two effective methods are using tracking tools online, and to encourage feedback to you from your customers.  You need to not only find out what people are saying about you, but using which medium.  A simple way to find out how a consumer hears about you is to give a survey asking it.  There are many other questions you can ask, and you can pin point which areas of your marketing strategy are working the best and focus your time and money on those aspects.  After reading this book, I have noticed that word of mouth marketing is clearly the most important part of a marketing technique of a company in today’s world.  It really is crazy how other people’s thoughts and opinions influence the way we think about services and products.

The Video Lounge

http://www.youtube.com/watch?v=URqLAqRRWm8

This video is simply a review of Word of Mouth Marketing.

http://www.youtube.com/watch?v=VxFQLjNNNOo

In this video, Andy Sernovitz himself talks about word of mouth marketing and why people talk about you.

Personal Insights

With business conditions today, what the author wrote is true – because:

Word of mouth is no longer just what helps out a barber shop in a one road town.  There is so much communication technology available now that if someone passionately feels something about a product or service, they can tell the whole world about it just as easy as they can tell their best friend.  Maintaining a good reputation and manipulating the message that is spread by your customers is the most important form of marketing today.

If I were the author of the book, I would have done these three things differently:

1.            I would have shortened up the book a little by leaving out some of the examples that were told.

2.            I would have tried to come up with a better definition for word of mouth marketing.  I felt the definition in the book was a little too basic.

3.            I would have spent a little more time on chapter two which was explaining the six big ideas of word of mouth marketing.

Reading this book made me think differently about the topic in these ways:

1.            The book showed me the actual importance of word of mouth marketing.

2.            Before reading I thought word of mouth marketing was a fairly simple concept, but after reading I realized how complex the technique is.

3.            The book made me realize that every business big or small must use a good word of mouth technique in order to succeed.

I’ll apply what I’ve learned in this book in my career by:

1.            I will remember that honesty is the best policy especially in marketing.

2.            Even if I am not designing the marketing plan myself for the company, it would benefit everyone to know what to do or say that will benefit the company.

3.            I was reminded that what goes on the internet is permanent, so I should keep a positive image on personal websites such as Myspace and Facebook.

Here is a sampling of what others have said about the book and its author:

Book Review by Craig Danuloff

            Mr. Danuloff talks about how the author basically hit the nail on the head with giving a clear description and great explanations of word of mouth marketing and how the concept should be applied.  Mr. Danuloff’s favorite passage from the book is one of the definitions of word of mouth marketing which is: “Word of mouth is about genuine conversation. Word of mouth marketing is joining that conversation, participating in it – but never manipulating it in any way.”  Mr. Danuloff thought the five T’s of marketing was a good part of the book as well.  He found two things that he thought should be different about the book which is that the book would benefit from more extensive case studies and examples in the text, and occasionally the book falls into the trap of simple and somewhat shallow descriptions and arguments.  At the end of the book review, Mr. Danuloff explains that the book is an excellent guide to word of mouth marketing that can be applied to any business.  Mr. Danuloff explains that: “It’s a quick read and worth to get a clear handle on what is and will be an important marketing tool.”

Bibliography

Danuloff, C (2006, November 7th) Book Review: Word of Mouth Marketing.  

Retrieved November 8, 2010, from http://blogs.commerce360.com/archives/word_of_mouth/book_review_word_of_mouth_marketing.html

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Contact Info: To contact the author of this “Summary and Review of Word of Mouth Marketing,” please email aaron.severio@selu.edu.

Biography

David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of works he has helped his students to turn into editorially-reviewed publications at the following sites:

Management Concepts (http://toptenmanagement.blogspot.com/)

Book Reviews (http://wyld-about-books.blogspot.com/) and

Travel and International Foods (http://wyld-about-food.blogspot.com/).                

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