I recently read a blog post entitled “How to Win Customers and Influence Buyers” by Satmetrix CEO Richard Owen, in which he makes the bold statement – “advertising just died.” This isn’t the first time I’ve heard this, and while I don’t necessary agree with this statement in its entirety, I do believe the traditional role that advertising once played is indeed dying. Prior to the online world expanding into something we wondered how we ever lived without, businesses relied heavily upon print advertising and snail mailing. Now, consumers are talking amongst themselves in more arenas that can be named.
Owens cites Prof. Eric Clemons from Wharton “The problem is not the medium, the problem is the message, and the fact that it is not trusted, not wanted, and not needed.”
Of course this transition didn’t take place overnight. It has been gradually gaining momentum over the years. Look at Amazon. It took them years to take over the retail book industry. But the change is impetus and nobody is looking back with nostalgia.
The question many people might be asking is, “Okay, so advertising has no linkage to business growth and increased revenue. Now what?” Social media might be the answer that immediately comes to mind. But, what specifically is important about social media?
Companies such as Starbucks and Zappos could probably attribute the majority of their growth to it….word of mouth. Social media allows people to talk in real time without filters. If a product is terrible, they’re going to say it and nobody is going to stop them. If they had an amazing experience with a service, they’re going to tell their friends, not via phone or email, but in arenas such as Facebook, Twitter, Yelp and FourSquare.
There is no control for businesses to stop or edit what customers are saying. Of course, if they’re smart, they are monitoring these conversations and can step in to extend a “Hey, thanks for the kinds words. We’re happy you liked our product.” Or, on the flip side, “We’re sorry to hear you had a had a negative experience. We want to make it right, so please email me.” Monitoring conversations and engaging is a great strategy, but at the same time, proactive measures can be taken to assist in decreasing negative word of mouth (Detractors), increasing the number of cheerleaders (Promoters) and tapping into the customers who aren’t saying much of anything (Fence Sitters).
In launching a data driven customer loyalty survey, businesses are able to reach customers they’ve already done business with. These people are familiar with the products and services. Regardless if they’ve been using the product/service for as long as ten years or for a mere two days, their opinions will be heard. In reaching out to them directly and asking the one simply question (of course additional information is preferable, i.e. why did you answer the way that you did?) “How likely are you to recommend X to a friend or colleague? (X being the company, product or service), companies have a baseline to start working from. From this data, root cause analysis can begin –understanding where in the process things are going right, wrong or just mediocre, is there a particular demographic that seems to be happier than others, is there a core component of the business that is causing clients to leave and flock to competitors? With answers to these questions, work to amend the unsatisfactory and to expound upon the positives can begin.
Owens lays a great foundation for discussion. The role of traditional advertising has forever changed. Through creating self propelled Promoters (those highly likely to recommend your company, product or service), businesses are in essence creating free advertising messages that peers, family members and colleagues take more seriously than an advertisement in a non-relevant newspaper. As the use of social media continues to augment, so will discussions about product and service experiences, both positive and negative.