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Small Business Marketing


Don't Overlook the Impact of Word-of-Mouth Advertising


Good old-fashioned, word-of-mouth advertising. The importance of it hit me yet again today. Anyone who lives in Indiana is aware of the problems with our Bureau of Motor Vehicles. Since most of you probably don't live in Indiana, I'll give you the background.

There has been a huge ruckus since our state decided to cut costs by closing a lot of our license branches. New branches were built and services were consolidated. People had to drive farther and wait longer. Problems with a new, state-wide computer system made the wait even longer. While the BMV did acknowledge problems with the computer system, they deny the wait time is longer. In fact, they launched a campaign to prove it. On the Indiana BMV web site, they even displayed reports of the average wait time at each branch.

Today, I ventured into one of these branches, for what I thought would be a very simple task. My 13-year-old son was heading to Washington, D.C. with his school, and I wanted to get him a photo ID instead of entrusting him with his birth certificate or Social Security card. We arrived right at 3:30 pm and checked into the "Welcome Center." So far, so good. After waiting a short time with dozens of other people, his name was called, the paperwork was done and we paid. This all took exactly 18 minutes and 54 seconds. I know this, because my receipt shows the visit duration, which is "the time elapsed from check in to transaction completion." They took my son's photo. . .and then the ONE machine they had to print ID's and licenses stopped working.

I know the machine stopped working, not because anyone acknowledged that I or other people were sitting there waiting. Nobody apologized and explained what was going on. I simply figured it out when I saw frustrated workers turning the machine off and on while the minutes kept clicking by. My son was catching a plane at 3 am the following morning. The license branches close at 5 pm. Knowing it would take a while to drive to another license branch, I ventured up to one of the workers and the conversation went something like this:

"Hi. If I go to another branch and get there before closing, will they go ahead and do an ID for us?"

"No."

"My son is leaving for a trip at 3 am, and we'd really like to have this ID. I can't just go to another branch and have one done there?"

"No. They probably won't because his information is already in the system here."

End of conversation.

Not comfortable that the employee had fully researched the possibility, I went up to the "Welcome Center" and restated my plight. The Welcome Center worker huddled with several others, and all looked at me while talking. She eventually came back and said someone was calling to check. I told her that was fine. All I really wanted was for someone to at least make the effort to check for me.

I went to sit back down, thinking someone would let me know what they found out on that call. But nobody ever spoke to me again. I just sat there, with other frustrated people, wondering what was going on. Would they be able to get the ONE machine fixed? At five o'clock would they boot us out the door or keep working on it? Now, I know the BMV isn't like a normal "business." I can't really choose to go someplace else the next time. But, I can contradict the PR campaign they've waged to convince the public of their commitment to fast, superior service.

How is your business doing when it comes to word-of-mouth advertising? Consider these facts:

  • 96% of unhappy customers don't complain. When you don't hear from unhappy customers, it doesn't necessarily mean everything is fine.
  • Most of those who don't complain won't use your business again, unless you're their only option.
  • Disgruntled customers do talk to family, friends, co-workers and anyone who will listen. Studies show a customer who has had an unpleasant experience will tell 9 or 10 other people. About 13% will tell more than 20 other people.
  • It costs businesses five times as much to attract a new customer as it does to keep an existing one. Plus, existing customers are your greatest prospect for selling additional products or services. Why not do all you can to keep them?

As a marketing director, I've heard the figures I just quoted to you for many years. But stop and think a minute. Think how word-of-mouth has gone "electronic." An unhappy customer doesn't just tell his co-worker. In an instant, he may email his entire company, 5 generations of family members and everyone in his graduating class. Oh, at the same time he writes about his experience on his blog and gives your company a negative rating on several "consumer opinion" web sites. He does all of this in mere minutes, and once his thoughts are out there, you can't get them back.

Today, marketing firms, knowing how fast people spread information on the Internet, actually use what is called "viral marketing." They plant an online message about a company, something so clever or entertaining, they know people will pass it on. They generate low-cost, far-reaching positive advertising in this way. Of course, customer complaints about your company can also spread on the Internet, and they can cost your company plenty.

With all of this in mind, think about how you handled your most recent customer complaint. Or did your employees handle it? How did they do? Do you even know? If not, you might try a Google search to find out.

You can't control all word-of-mouth advertising, but you can do plenty to push the pendulum in your favor. Here are a few tips:

  • Don't provide cookie-cutter service. Tailor services to meet a customer's particular wants and needs. Different people care about different things. When you address the needs that make a specific customer tick, you're more likely to keep that individual happy. This approach does require taking the time to get to know your customer.
  • Develop a policy for handling complaints. Make sure employees know this policy and empower them to implement it. The sooner you can resolve the issue for the customer, the more likely you can regain his or her trust. Your best bet is to give employees some parameters and decision-making power to resolve issues quickly.
  • It's good for the owner or manager of a business to be personally involved in customer relations on a regular basis. That isn't always possible though, so follow up to make sure your employees are handling complaints courteously.
  • No matter who is handling customer complaints, they should be trained to do the following:

  • Listen to the customer and acknowledge his complaint. Develop empathy and show some concern. When I've dealt with irate customers and their complaint seems trivial to me, I remind myself that it's important to them. Otherwise, they wouldn't have taken the time to complain.
  • Ask questions to better understand and identify the problem. Paraphrase, or repeat what you think you've heard the customer say, to ensure you really do understand. An upset person may not initially explain the situation clearly. If you don't take the time to listen and get to the heart of the matter, it may only add to the frustration.
  • If the problem can't be resolved immediately, keep the customer informed of progress. Customers are usually more patient with a little wait, if they know you're still working on a solution.
  • Keep record of complaints and resolutions to look for trends. Look for problems that may signal a need for a change in operating procedures or employees.

While a complaining customer may not be the most pleasant part of your day, look at it this way. The customer who complains is giving you a chance to make things right and prevent negative word-of-mouth advertising. In fact, when you work to regain the support of an unhappy customer, you may end up with a more loyal customer who has something positive to say about your company. A happy customer tells an average of five other people.

My BMV experience is a perfect example of the damage word-of-mouth advertising can do. We finally received my son's photo ID, with no apologies, at nearly 5 pm (although my handy, time-tracking receipt insists my visit duration was 18 minutes and 54 seconds.) We waited long enough, that I was able to call three people to complain about the wait and explain why I wouldn't arrive at my next destination on time. I was also frustrated enough to post this article telling you, and anyone else who will listen, about it.


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