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Sunday, February 21, 2010

I'm often asked, "What is the most effective form of marketing?"  To which I respond, "word of mouth."  Nothing is as effective as word-of-mouth marketing.  The real question is how to generate word of mouth from your customers on a regular basis.  There are a variety of ways to generate word-of-mouth marketing and many are overlooked by companies large and small.

One of the best ways to generate a referral is with a strong customer advocacy campaign.  Do you honor and reward your best customers?  When customers are celebrated, there's lots to talk about.  You can share their honor with others in their segment or group.  Additionally, you can repackage the information in the form of news or video, easily distributed throughout the Web.  This creates awareness and interest for your product or service.

I personally like using surveys to get at the heart of what your customers like and don't like about your products or services.  By utilizing open ended questions like, "Who do you know who could benefit from our product?"  Experiment with different ways for generating referrals from surveys that are personalized and based on customer insights.

Another great way to create word-of-mouth is through a customer referral campaign.  Referral campaigns are simple to implement but require a solid understanding of your audience.  By asking and rewarding your customers for referrals, you can have them do the selling for you.  This type of personal selling is one of the most effective.  Consider low cost methods of rewarding your customers for referrals.  This could be a discount on existing services or added bonuses.

Other word-of-mouth campaigns may be effective in utilizing testimonials.  Today, with the help of blogs, video, and web sites, when customers have a good experience they have lots of ways to share it.  The challenge is to direct your customers to promote good experiences, not bad.  Although I've tried to solve this dilemma for over a decade, the only discovery I've made is that you have to take the good with the bad.

There's actually a silver lining here.  Research has shown that when customer comments contain both positive and negative feedback, they are more believable.  The key is to encourage your customers to speak up about positive experiences and downplay the negative ones.  When you receive or come across negative comments, respond to them - work with your customers to make things right.  After that, let them go.  The balance of positive and negative works in your favor.

Word-of-mouth marketing is a powerful tool in your marketing arsenal.  Think of ways to elicit positive feedback from customers.  If you focus on generating word-of-mouth, you'll quickly find a number of methods for encouraging referrals from your customers. 


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