Word-of-Mouth is Awesome…but not Always…3 Reasons Why

There is no business on the planet that doesn’t want more Word-of-Mouth…it is the most trusted, respected, and can be delivered at the lowest cost of sale for any product or service. The numbers are staggering…over 90% of the people believe the recommendations from someone they know. So why wouldn’t you just want more of this highly coveted activity?

When you have a “Word-of-Mouth Strategy” in place in your business (or any organization including non-profit) you are purposeful about creating word-of-mouth and you will derive some incredible benefits…well beyond your competition. But when word-of-mouth is left to “just happen” because of some random “good things” that occur in your business from time to time, this is where problems arise. When it isn’t purposeful it is being left to chance…and we all know how well that works out in business.

If you don’t have a purposeful Word-of-Mouth Strategy, you are essentially “NET CASTING.” Net casting is when you want to attract anyone with money to buy your products or services…essentially saying “if you want our product and have the cash we will sell it to you.” While this might sound great because it is increased sales, it is a land mine waiting to be stepped on when it comes to Word-of-Mouth.

Let’s say you are a commercial fisherman and you want to catch salmon…and only salmon…because that is what the market wants from you today and it has the highest profit margin. If you “cast a big net” in the ocean you will definitely catch some salmon…and some carp, and sharks, and a myriad of other fish you don’t want. You have to get rid of them because you don’t have a market that wants to buy them…they want salmon. This is a time waster for a fisherman and is an incredibly inefficient way to try and catch a lot of salmon.

But if you are smart, you don’t cast a big net and hope to catch some salmon. Instead, you buy the gear that is designed to catch only salmon and you invest your time and resources into it so you can avoid catching all the other garbage fish that you don’t want. This is a focused approach to fishing and yields the highest margin for the fisherman.

Translate this into your customer base. Your ideal and most profitable customer…the one you are designed and set up to serve incredibly well…is the salmon. You have built your processes around serving this customer really well and being able to meet their needs and hopefully give them an awesome experience. You have built the business primarily around serving the salmon…not every other type of customer that just happens to have cash. Granted, you will have other customers, but for the sake of the example, your “salmon” customer is number one.

But another type of custoer shows up…a carp customer…and they have money and want to buy your product. But they also want to negotiate some of the aspects of price, delivery, and post-sale services. While they might have the money, they aren’t a salmon and you aren’t set up as a business to serve them in the way they want. This is a key decision point for your company…do you take the new customer and their cash or tell them you aren’t really the best company to serve them?

Unfortunately, the majority of companies will take the cash and tell themselves they can figure out a way to serve them so they can get the revenue. THIS IS A MISTAKE. Three reasons why

First, these companies don’t have the internal processes to serve this new customer the way they want to be served…period. So they either have to modify their processes to accommodate the new customer or they will try to fit the new customer into their existing process…which usually translates to the new customer always being unhappy and unfulfilled on what they want you to deliver. If you decide to change your processes to accommodate their demands, you have to ask yourself, “what about our primary customer, the salmon, you have designed all our process to serve?” Do you modify the processes so they aren’t exactly what the salmon want and have become accustomed to so you can  accommodate the new customer, the carp? If you do, you run a high risk of upsetting your main target customer, the salmon.

The end result of this approach could cost you more revenue immediately and in the long term. What happens is that you upset your best and most desired customer, the salmon, so they start to think you don’t care about them as much and they leave. You have replaced them with a less desirable customer, the carp, which has proven to not be as easy to deal with and probably at a lower margin. This is where you start to slowly erode your ideal customer base to accommodate a less desirable customer just because they showed up with some cash. This happens all the time in businesses. You might think it is easy to spot and stop…it isn’t. It’s a sneaky process and it comes in very sly and usually unannounced. Look out for this because it can wreak havoc in your business…to the point of extinction.

The second reason this is a bad idea is that the new customers, the carp, are vocal and want to tell others about you. What do you think they are going to say to people in the market? You guessed it…not good things. Why? Because your processes and systems are designed to provide your primary customer, the salmon, with an awesome experience…they aren’t designed to give the carp the experience they want because they demand other things. So they aren’t happy…and they tell other people…lots of other people today because of social media.

They spread word-of-mouth in the market that says you aren’t a great company, don’t deliver a great experience, don’t give them what they want when they want it, and to not buy from you. Unfortunately, in today’s socially connected world, they can tell thousands of people in an instant. While many of these will be fellow carp’s, they also reach some salmon and other potential customers. The word can spread in minutes and while you have developed this awesome experience, it isn’t the right experience for the new carp customers.

Third, your salmon customers are also unhappy and guess what they do…you guessed it…tell all their salmon friends you aren’t that great of company any more and are making changes that don’t really serve their needs. This means they tell other salmon not to be your customers. This is devastating since now you are losing on both ends…the salmon and your reputation.

This is where word-of-mouth is not your friend and can do more damage than good.

And it all started because you chose to take the money from a customer you aren’t prepared to serve in an awesome way…this is why word-of-mouth is not always a good thing…it can be the catalyst to slowly erode your customer base. If you had stayed with serving the salmon and sent the carp customer away, you would sustain far less damage. You might lose some short-term revenue but you will stay solid and continue to grow your revenue by attracting more salmon and building a more solid base of customers in your business. And the vocal carp wouldn’t be telling their thousands of friends and colleagues how you can’t serve them the way they want to be served.

And the salmon will be singing your praises…to other salmon, not carp…and spreading massive Word-of-Mouth.

The morale of this story is simple. Identify the customers you want to serve incredibly well and who you can design and deliver awesome experience to and they will love. Build your processes and customer experience around these customers…period. Focus on these and these only…don’t drift away and start taking on customers that don’t fit these Personas and Profiles. Stay focused on the salmon…turn away the carps.

The OPPORTUNITY is to create positive word-of-mouth because you are delivering what the salmon want with both your processes and your customer experience…and they will tell other salmon about you. This is where Word-of-Mouth works! Now you are getting positive comments from the audience you want and they will tell others in that desired audience about you. You aren’t serving everyone…you aren’t “net casting” and trying to serve everyone…you are focused on the salmon and treating them incredibly well.

Find the customers you truly want to as your customers…those you really want to serve and have a passion for serving. Treat them better than anyone else by designing a customer experience that blows them away every time they interact with you. Find more customers just like them and ignore all the others that show up. When this happens, you build a niche that you own and no one can easily take away from you…you have created uniqueness and differentiation for your company in the customer segment you desire. This worksand it also drives solid and consistent Word-of-Mouth!

If you ever want to know more about this process and how to avoid the carps, give me a shout and we’ll grab coffee and I can give you some more insights to why and how this can happen for your own company. It’s a strategy and it takes strong leadership to ensure its successful execution…but when it happens, you get amazing and incredible results. Are you ready to move your company to being REMARKABLE?

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