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Six Reasons Word-of-Mouth Doesn't Work

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Is there any form of marketing communications more compelling than word-of-mouth, the enthusiastic and genuine recommendation of a person you like and trust? It's no wonder that virtually every business-to-business marketer prizes this organic, spontaneous, and—perhaps best of all—practically cost-free method of bringing in business.

But some businesses, especially on the B2B side, rely far too heavily on organic word-of-mouth strategies and, specifically, on acquiring new customers primarily through referrals.

Why? Partially, it's a matter of pride—every new customer who comes through your door as a result of an current customer's recommendation is just one more validation that your business is on the right path.

And it's also a matter of convenience—advertising and other forms of marketing communications are expensive, agencies can be difficult to find and manage, and the very nature of mass communications vehicles means that the majority of impressions end up reaching unqualified targets.

Nonetheless, relying on organic word-of-mouth is practically a guaranteed way for a small or medium-sized business to stay small or medium-sized.


Here's why.

1. Word-of-mouth is inherently subjective

True, some business targets may place high value on recommendations they receive from colleagues and referral sources. But many companies, especially in the B2B environment, regard these recommendations as subjective and not fully reliable, especially when not accompanied by more-formal and more-objective measures of quality.

The B2B sales cycle is long, and positive word-of-mouth merely gets you in the door. After that, empirical measures of quality, case studies, and demonstrations of success are far more important.

2. Word-of-mouth is uncontrollable

By definition, it isn't possible to control what others have to say about your services in a word-of-mouth context. Well-intentioned recommenders may still get your message entirely wrong or characterize you so narrowly that a potential client won't consider you for an enterprisewide solution.

3. Word-of-mouth is limited in reach

Particularly in a business-to-business context, referrals and word-of-mouth work only with people who know you, and the people who know them. Once you are more than two degrees removed from the source (i.e., people who know the people who know you) word-of-mouth and referrals rapidly fade as significant factors.

4. Word-of-mouth is easy to subvert

In the B2B environment, it is common for competitors, either at the corporate level or at the level of the individual salesperson, to spread negative word-of-mouth about a company's management, finances, ethics, service model, or commitment to quality. This is especially destructive where there are no formal marketing communications vehicles in place to counteract these negative messages.

5. Word-of-mouth is limited, by definition

Word-of-mouth success is usually based on an appreciation of a company's current competencies. It is very difficult to spread a message about new strategic initiatives and new competencies through word-of-mouth, especially when current customers know you only in the context of what you do for them now.

6. Word-of-mouth is non-replicable

There are no efficiencies of scale in word-of-mouth, referral, or relationship marketing, because everything takes place on a one-on-one basis. You will never reach vast swaths of players in corporate America who are not even aware of your existence.

* * *

One way, in a business-to-business context, of overcoming these problems is to put into place so-called "amplified" word-of-mouth strategies—for example, creating online messages that can be easily disseminated by others, training and motivating evangelists, creating incentives for referrals, and finding influential industry figures to write about and talk about your company and its services.

None of this is quite as oxymoronic as it might appear at first glance—just because word-of-mouth is a grass-roots phenomenon doesn't mean you can't strike a few sparks to help your campaign catch fire.

But even amplified word-of-mouth suffers from the same shortcomings as the organic kind. Its reach, in the business to business world, just isn't extensive enough. That's why companies still need to expend time and money on case studies, sophisticated sales-support tools, and mass communications vehicles such as advertising, public relations and print and electronic collateral.

Expensive? Sure. And in the business-to-business world, it's unfortunately almost a given that these vehicles will be poorly executed. But that just means that companies need to pay more attention both to how they're selecting agencies and to how well those agencies are managing their marketing communications programs.

Once a company does manage to put into place a well-executed program, the word-of-mouth that might be generated by this program—and by the services, products, and reputation of the company itself—happens to be a nice bonus.

But that's all it is, and, if a business wants to grow, it would be making a mistake if it regarded it as anything more.


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Michael Antman is principal of the corporate and marketing communications firm McSweeeney & Antman (www.mcsweeneyantman.com).

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  • by Sean Moffitt Wed Jul 30, 2008 via web

    If you want a fact based skewer of the argument above - go here:

    http://buzzcanuck.typepad.com/agentwildfire/2008/07/marketing-profs.html

    I would say 0.5 to 1 of the 6 reasons is true and one or two of the points above are misguidedly and horribly wrong.

  • by Bill Potter Sat Aug 9, 2008 via web

    In scenario of one significant business customer with many branches and our company servicing many small towns we have found word of mouth most beneficial in both b2b and b2c.
    Still we must always consider other ideas and not rely on historic activity

  • by Neil Anuskiewicz Sat Aug 16, 2008 via web

    I think the author makes some good points and his ideas about amplified word-of-mouth seem sound.

    That said, we all hope to keep the sort of organic word-of-mouth rolling, too.

  • by piyush Sun Aug 17, 2008 via web

    All n all it has strenthen my opine on decreasing effectiveness of word of mouth when we go from b2c to b2b. Information seems true in a strech of businesses but it is possible that it doesnt hold true in some specific industry/sector

  • by Briscoe Wed Sep 3, 2008 via web

    A better title for this article is "Why you should continue pumping money into your marketing budget.... and... uh.... companies like mine."

    Why bother knocking something you don't really have control over?

  • by Doug Pruden Wed Oct 29, 2008 via web

    There should be no question that word of mouth carries incredible impact in a organization to gain and retain customers. That is proven fact. But it will not on its own do the entire job. Further, while in some categories' customers will volunteer their opinions (either negative or positive), in most cases human nature leads us to respond only when asked.

    Customers opinions that are spoken or written can be incorrect in facts, unjust in evaluations, unfair in expectations, and totally miss understanding the strengths of the brand. Corporations could take steps to address these by making improvements, managing evidence, and managing expectations in the most ciritical areas. However, most American businesses don't make the effort to learn what customers are saying and writting about them to one another. Until they get an objective measure of what's being said, it's impossible to manage.

  • by Elaine Leonetti Wed Oct 29, 2008 via web

    I don't know of any companies who rely exclusively on WOM to generate new business. With that said, referrals should be a part of any company's marketing initiatives. It doesn't matter if the person giving the referral does not describe your services perfectly. It's up to the sales/marketing person to manage subsequent conversations so that there is a better understanding of what you provide and help qualify the lead. Our company would not have grown over the past few years without WOM and referrals.

  • by Bill Miller Wed Oct 29, 2008 via web

    As the writer and many others have pointed out, WOM by itself is not the magic bullet, but it is what you want your advertising, marketing, and overall business plan to create in your marketplace.

    The solution is not difficult, but often overlooked. Companies simply need to talk to their customers. Too many companies have taken thier customers for granted and allowed execs and sales people to dictate messages, products, and services. The "Voice of the Customer" has been left out, and needs to be brought back in, especially in today's economic situtation...buying habits and purchase drivers are changing...as a company do you want to keep going down the road you are on and banging the drum to to a message that no longer resonates because customers/consumers have branched off to a new road and a new drum beat...get out there and talk to them, and let them drive your marketing messages and services...which in turn will create positive WOM and keep your company relevant and in the forefront when they begin spending again.

    Look into market research companies that specialize in Voice of the Customer research and consulting such as www.satmansys.com

  • by Robert Coleman Thu Oct 30, 2008 via web

    Word of mouth is full of serendipity to be sure. Two years ago one of our technicians was at a Starbucks and noticed the vehicle sign for landscape services on a truck pulling into the parking lot. He walked up to the driver when he came into the coffee shop and mentioned we do irrigation work and would he like a card. This encounter blossomed into a relationship with a company that is now our #1 revenue source. He has referred us to over 25 other individuals and companies!
    WOM (referrals from existing customers) is our third largest source of new customers and revenue, behind highly expensive yellow page advertising and organic internet inquiries (1/3 as expensive). WOM is dramatically less expensive---and is only effective if you train your staff to "spread the gospel."

  • by Sam Decker Tue Dec 23, 2008 via web

    Maybe this article was written for shock value. Maybe because the author works for a firm focused on shaping a message , which may be void of the customer's voice. For me, I believe today's marketing requires the company to BE itself -- with the goal of being GREAT -- and then amplify that reality. If a company does great things for its clients, its clients will have good things to say about them. Then, it's up to marketing to get leverage the voice of their customer rather than their own. Marketing / advertising is less and less believeable. I'm CMO of a company that has grown to 400 people and we've never advertised. Ask yourself, how many B2B marketing or advertising campaigns do you pay attention to? In contrast, do you go to conferences to hear what your peers say, to hear what other brands say?

  • by Michael Antman Tue Jan 13, 2009 via web

    Just wondering, Sam -- when you go to conferences, do you bring along any marketing materials, or do you arrive empty-handed? Does your firm have a website? Do you use e-mail marketing tools? Do you have case studies? Do you use white papers? Do you take advantage of social media? (which, by the way, is not the same thing as "word of mouth.") How about the peers/competitors that you encounter at conferences? Do they use print and electronic marketing materials? I'll bet most of them do -- the successful ones anyway. This article was written as a result of my encounter with two medium-sized B2B companies that relied almost entirely on word of mouth -- they had very poor websites, no online strategy, and no marketing materials other than some product descriptions and catalogues, because up until that point, all of their business had come through referrals. But that clearly isn't a strategy for continuing growth. My article was intended to point out that, in the absence of supporting materials, word of mouth by itself isn't sufficient and has substantial weaknesses (as, for that matter, does every form of marketing communications, which is why marketing officers need to implement a mix of techniques and tools.) However, some people who perhaps didn't read the article as carefully as they might have seem to be under the impression that I'm stating that word of mouth is bad, rather than merely flawed and too heavily relied-upon. Of course word of mouth is very valuable (as I state very clearly in my first paragraph), but if a company wants to grow, it can't passively rely on it. Instead, it has to support, control, and shape that word of mouth (or, as you yourself put it, "amplify that reality") with a mixture of new and traditional marketing communications tools. It's a simple point, it's one that I suspect you would agree with, and it isn't the least bit shocking.

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