Practising word of mouth

I was planning to go to the cinema to see "The Revenant" even though I'm not a big DiCaprio fan. A friend who is a fan told me that she didn't like the film, that it was an hour too long and that the story was not at all credible. The cinematography, though, was good. I've decided to skip the tickets and popcorn and wait to see it on video or online.

This is the word of mouth effect ("word of mouth" or WOM in marketing terms): a phenomenon whereby a consumer (sender) shares opinions about a product or service which are received by another consumer (receiver), who on the basis of this information modifies his or her attitude or behaviour towards that product or service.

Not only cinema premieres are strongly affected by WOM, businesses such as hairdressers, dentists or lawyers, who cannot or do not want to invest in advertising, nourish their customer base thanks to it.

There are also big brands that have built their success on this customer behaviour, have sustained it effectively over time and have saved a lot of money on promotional campaigns (as is famously the case with Mercadona).

 WOM is not only ubiquitous (thanks to the Internet), it is also highly persuasive and more effective than advertising: most consumers check the opinions of others when considering a purchase, we all trust recommendations from friends and family more than information from brands, and more and more decisions are determined by it.

 Many brands live in tune with this phenomenon and a specific metric, NPS, which measures customers' intention to recommend, is on the scorecard of large companies.

 WOM takes many forms: it can be positive or negative, face-to-face or digital, directed at people around us or complete strangers. However, from a customer experience point of view, what are the mechanisms behind this phenomenon that make it so powerful and, above all, what can we do to benefit from it?

How does WOM work?

I first ask you to remember the last time you have recommended something to someone (... whoever has done it, as there are also people who are incapable of recommending, being more prone to criticism and this is a very strong first rule).

 We will see that WOM is a very socially influenced behaviour: we recommend (or criticise) because in our environment knowing about something or giving an opinion about something reinforces our position in the group. With WOM we socially signal knowledge that we sometimes objectively lack (...we are human).

 Therefore, not all products or services are equally susceptible to WOM, it is not easy to imagine someone recommending their brand of toilet paper (something too personal) or the electricity company we have at home (a service we only expect to work and be billed correctly).

 From the point of view of the receiver, it has been measured that WOM is much more effective at the initial moment of the purchase valuation ("I am thinking about which brand to buy") than at the end of the process and it is also more effective on "low effort" decisions e.g. choosing a film than on "high impact" ones e.g. buying a house.

 Also from the receiver's point of view, WOM is not very effective if we think we know a lot about the subject in question and of course our opinion about the trustworthiness of the sender is very influential.

 A lot of research has been done on the web about the extent to which ratings (the little stars) are the most important thing (they are!), as opposed to comments, and how the number and type of ratings affect us.

I'm sure this all sounds familiar when you relive your WOM experience but, thinking about how to manage it?

How can we make it work for us?

1. Let's start with the basics.Fulfilling the brand promise to the letter: Mercadona gets positive recommendations because its value for money is always very good, it's as simple as that.
2. Reconociendo su importancia para nuestro negocio y actuando. En el sector de restaurantes y hoteles se está librando una cruenta batalla debido a la incidencia en el negocio de las recomendaciones en Tripadvisor, un sitio que no exige comprobación de uso por parte del cliente. Se han dado casos de compra de recomendaciones, comentarios maliciosos e incluso clientes que piden gratis el «gin tonic» amenazando con una mala crítica (… lo he visto).  El problema no son las redes sociales, si no el negarse a aceptar que, ahora mismo y cada vez más, los clientes orientamos nuestras decisiones por estos medios. Los comentarios negativos no son una amenaza, debemos convertirlos en una oportunidad.
3. Encouraging customer participation: Are we providing the customer with adequate and attractive means for them to give us feedback? Be careful because sometimes we ask for feedback but only on what we are interested in: the typical case when they call you for a satisfaction survey, you mention a problem, you give a bad mark... and they turn a deaf ear! Also encouraging the active involvement of customers in the definition of our brand promise, e.g. with co-creation models such as those that work in the digital world, but which are extrapolable to any business. These practices have a very good return from the WOM point of view.
4. Reacting quickly to a customer problem is key. Reaction time is essential to avoid negative recommendations: do we have the guidance and the means to collect and resolve customer dissatisfaction as soon as it occurs, why wait to find out about negative WOM when it is already more difficult to handle, and why not react quickly in the case of recent customers: they are particularly sensitive to incidents and especially grateful if we resolve them well, as we will be reinforcing their decision to choose our brand.
5. Ensuring the preparation of the people in contact with the customer: are the people in our team trained to detect dissatisfaction and manage it judiciously? I am not only referring to explicit dissatisfaction, many customers prefer not to say anything, but we can detect that something is wrong and act as well: I am not saying that the customer is always right, sometimes he is not, but it is necessary to explain why (the brand promise once again).

All this will not prevent us from receiving negative comments, but if we have done our homework beforehand, we will be able to live with them more calmly and, of course, we will have many more positive comments.