The Power of Word of Mouth

Today I was struck by how powerful my wife’s mom’s club is in terms of word of mouth. Gina, mother of our four kids, is a board member of the Livermore Mothers club. She was drawn to this community of moms who support, inspire, and share experiences with one another.

Like most moms, these are often the “economic buyer” of the household. And that makes them a powerful force in Livermore because they talk about their buying experiences–the good and the bad.


Gina once posted a note asking “does anyone have recommendations for electricians?” She got back many responses yet one name came to the top of the list—Carl Keeney. We hired him based purely on the strength of references from fellow moms. Turns out his business comes almost exclusively from referrals from the Livermore moms club. The moms use Yahoo groups to communicate so what would take months of verbal word of mouth takes a click of the mouse to get out to the 150 moms. And some of these moms are executives. Talk about power.

But this club is not so unusual. For example, I personally belong to the following:

HP Alumni Association (5000+ members)
Women in Consulting (200 members)
EPIC – Enabling Partners in Consulting (72 members)
Bay Area IChild (170 members)

All of them are part of what internet marketers call the “long tail” or where there are far fewer “visitors” to a website because they represent a very specific interest group unlike portals which serve the masses. But I see a further distinction here than the “long tail” descriptor. These are communities that foster word-of-mouth which in turn has a huge impact on buying behavior.

Common characteristics of a private online group:

Open vs. closed – Blogs, podcasts, and niche websites are community builders in the sense that they attract people with common interests. Anyone can visit the site and post a comment. But a community using, say, Yahoo groups, is typically closed to non-members. This exclusivity makes the group more intimate.

Member vs. visitor – And because the group is closed, participants in the community are “members” not just anonymous visitors to a website. Membership confers with it a responsibility—what you say matters and will affect your relationships with other members.

Trust and honesty – People join this community because they share a common area of interest and, more importantly, a common experience (e.g. motherhood, HP tenure, adoption, etc.). And that bond engenders both trust and a desire to help one another.

Elicit not solicit – Community lists facilitate member requests. Members elicit a response when asking for inputs whether it’s about colic, constipation, computers, or consultants. This is very distinct from websites, association mailing lists, or publications in which vendors solicit its subscribers with specific offers.

Conversation vs. communication – You’ll find most online groups have “threads” or conversations online on a particular topic (e.g. does anyone know…?) as opposed to one-way communications (e.g. articles and announcements).

What marketers can do to leverage word of mouth:

Look beyond the obvious targets – Who would have thought that one of the biggest influencers of electrician hires was mothers? Ask your customers who they turn to for advice and whether they belong to an online group.

Deliver excellence – There’s no hiding in this venue; both good and bad purchase experiences will get telegraphed instantly in an online community so your product/service better meet or exceed expectation well past the initial purchase. This is true whether we’re talking about electricians or enterprise software.

Nurture relationships – you know my mantra has been that customer retention is more important than acquisition. This holds especially true when marketing to a tight community where your very first customer and your last one will carry equal weight.

Be a member or befriend one — Carl, our electrician, was connected to the Livermore moms club through one of his early customers. And that connection proved vital since virtually all his business now comes through club referrals. You can do the same by finding out how you can better connect with your target group. If it’s CIOs of banks, perhaps your best customer can give you visibility of what conversations are taking place among them.

Don’t market – If you do somehow get to be a member of your target group, resist the temptation to promote, brag about, or pitch your product/service in any way. Sure you can buy a sponsored ad but never solicit business in the online group. You only hurt your credibility and risk blowing relationships.

So to sum up, we all know that word of mouth is the #1 best form of marketing because of its impact on purchase behavior. But do what Carl Keeney, our electrician, does: identify your target buyer’s community, deliver excellent product/service, and build lasting relationships that will reward you many times over.

Resources:

NYU grad school — Word-of-Mouth Ain’t Just Blogging

Brand Autopsy — The Influential Power of Word-of-Mouth

Yahoo groups

Copyright © Sridhar Ramanathan Pacifica Group

One Response to The Power of Word of Mouth

  1. zelda August 30, 2007 at 5:09 pm #

    Excellent thoughts. May I share them with our fixed annuities salespeople? I find that people really understand when you explain,face-to-face,the difference between fixed and variable annuities. It takes that personal “I’m with you” touch.
    Thanks for reminding us. zelda.