Real World Word-of-Mouth

Empowerment. It's what's shifting the balance of information from sellers to buyers.

Just a few years ago the conventional selling wisdom was to brag about the good word-of-mouth, and try to hush the bad. Since the only thing customers tended to have in common was that they purchased from the same seller, they weren't able to tell each other much about their respective experiences.

When the seller told prospective customers the good news of a positive referral, they may have never heard the bad news from other customers.

But technology has changed that balance by connecting, and empowering, the buyers. They're connected through cell phones, through IMs, chats, e-mail groups, blogs, podcasts, and vidcasts. They're sharing information.

They're talking about you. They're doing it right now.

In the past I've stated you are in control of your company's word-of-mouth. I've even explained how to budget for word-of-mouth. And here I am telling you that customers are talking to each other and leaving you out of the process.


Let’s discuss some real world causes of word-of-mouth.

Imagine a customer planning a getaway for a family of four. She's checking prices online, and finds Best Western has a price-match guarantee. She finds a better price at HotelClub.net, books a non-smoking room, and submits a price-match claim.

Best Western rejects the claim because she booked a non-smoking room, and HotelClub.net didn’t guarantee a non-smoking room.

Being the stubborn type, she goes back to HotelClub and books a smoking room. She again submits her claim and is again rejected. This time it’s because although their hotel only offers two double beds for the occupancy of four persons, she didn’t specify that she wouldn’t accept a double and two singles, or even four singles.

Think she might put her story on the web?

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Suppose a customer was excited by the news that as of January 1, 2005 Blockbuster was no longer going to charge late fees on their movie rentals. Further suppose he had rented one, and didn’t return it within a couple of weeks. Would he be upset to find he’d just purchased that movie?

Then, to add insult to injury, the company indignantly states that there ARE no late fees any more, which technically is true. They’re not charging a fee for keeping the disc. Instead, they’ve just sold it to him.

What do you think? Will he sit on this story, or share it with other anonymous prospective buyers?

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Making false promises, and weaseling out of them is so common that savvy shoppers automatically begin by reading the fine print in the offer.

Look at the basic price match guarantee. To qualify for the price match, a shopper should have to compare apples to apples. That's fair, isn't it? In order to match the price, the items sold must be exactly the same, as evidenced by the model number.

Suppose a shopper found the exact same Minolta camera at three different major retail chains. Oh, wait, they’re not exactly the same.

One is marked 430si, one 450si, and one 400si. That model number is literally the only difference. The major retailers (who purchase a lot of Minolta cameras) have successfully negotiated with Minolta to help make sure they'll never have to pay off on any price match guarantee.

Might a disgruntled shopper put that story on the web?

It isn't just Minolta, and this strategy isn't limited to cameras. My brother-in-law found a similar situation with Dyson vaccuum cleaners. No two chains carry exactly the same model. Their respective model numbers differ only by the hyphenated final digit.

While researching this article, I found the Minolta story. Since then, the page has been removed, and yet, you're reading about it here anyway. That's another example of applied word-of-mouth. Another example of the persistance of word-of-mouth.

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A buyer checking out Netmarket’s 200 percent price match guarantee, would have found Netmarket also uses this strategy, (“Exactly the same means an item with the same model number, manufacturer's U.S. warranty and accessories, as the one you bought from Netmarket.”)

But just to make absolutely sure they'll never pay off, Netmarket has added a couple of extra steps.

First, they require you to contact the manufacturer and prove to Netmarket that the company you bought the item from was indeed authorized by the manufacturer to sell that model number at that particular price.

Second, the competitors ad can’t state a “no return” policy, can’t limit the number you’re allowed to purchase, or can’t have an expiration date.

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CampusTech’s price match guarantee states that once you’ve actually placed an order with them, the item no longer qualifies for the guarantee.

Huh?

They’ll price match right up until you actually purchase, then the deal’s off.

Of course, CampusTech maintains a $50 limit on their match and says they won’t sell below cost, no matter what the price guarantee.

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Best Buy's web site offers to let you purchase on-line, and pick up the merchandise at the store, where the price is higher. The Best Buy folks will tell you that their on-line sales happen through a separate entity, who sets prices independantly.

Will upset buyers tell people about this if they felt cheated?

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We could go on discussing individual examples of companies who dishonor their advertising in their fine print, but I'm sure by now you get the idea (and I also hope you start reading that fine print much more closely).

Years ago if a customer was outraged to find himself a victim of this weasel clause strategy, the only people who might hear of his experience were close friends or co-workers. If one of them was in the market for a vaccuum or a camera, he might have affected their purchase decision. Chances are, few of them were in the market at that time.

But now? Now, your customers, although total strangers, are telling each other exactly how you treated them.

My original point was that you control the word-of-mouth related to your business, and you do.

All you have to do is treat your customers honorably.

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