Three Levels of Word-of-Mouth Which Determine Your Professional Reputation

According to an old saying there are only two things people want to know about you: what you stand for, and what you won't stand for. This is the basis of reputation.

We intuitively understand that people's actions are nearly always in accordance with their values. Someone who embraces fairness and treats other people honorably is likely to treat us honorably. Someone known to be dishonest has a higher likelihood of cheating us, as well.

And like our personal reputations, our companies have professional reputations, built on the experience customers have in dealing with our companies, along with their willingness to talk about those experiences.

Call it Word-of-Mouth.

Another name for professional reputation is word-of-mouth, which comes in three variants. From least to most influential, they are:

1. Awareness - Do I recognize any of these names in this directory?

2. Reputation – Have I heard of anyone who has the ability to help me with my problem?

3. Personal Experience - Do I have knowledge of, or experience with someone who can help me to solve this problem?

Each successive level takes priority over the lower.

Awareness.

At the Awareness level, simply recognizing the company's name trumps never having heard of them. This is the weakest level of word-of-mouth. If you stay in business long enough, you'll achieve some level of awareness. You'll then have a slight advantage over some newer company that has yet to achieve any awareness at all. Why? With no other information to go on, shoppers will usually buy from the company they've heard of.

Awareness is largely a function of repetition. A customer notes your name on the outfield sign at the ball park. Hears your jingle each morning on the radio. Sees your banner ad on the Internet. Catches your sponsorship of the six o'clock news. Recognizes your logo on the pee wee league uniforms. If you're part of the community, eventually people will bump into your name in the course of living their lives. The longer they're aware of you without hearing specific negatives about you, the more generally positive this awareness becomes.

Small businesses like to advertise how long they've been in business, as if years of “experience” automatically translates to a benefit in the minds of shoppers. Unfortunately, shoppers have proven not to care. (Kind of ironic, isn't it? All those years of doing business in the community have lead to awareness of your company - but the benefit is to you, not to them).

Reputation.

The next step up, reputation, beats out basic awareness. “Here's what people say” is the next best thing to first-hand knowledge – provided of course people aren't saying uncomplimentary things.

The size of the community is a factor, too. The fewer people in the population, the more likely a shopper is to run into someone with a story to tell about the business. Reputation is therefore a bigger factor in small communities than in large ones.

According to Wikipedia, one study found that a good reputation added 7.6% to the price businesses received for their goods. Some companies are finding that improving their reputations can actually boost stock prices.

Side note: the Internet has changed the nature of “community.” It simultaneously offers the potential of world wide reach while providing individual gossip to anyone who seeks it. And just as bricks and mortar stores have public relations companies to put a positive spin on community perception, their web-based brethren are now hiring reputation managers to keep track of on-line credibility.

Personal Experience.

And finally, those people who have had actual dealings with the companies in question will have the most convincing word-of-mouth of all.

Shoppers who get what they expect will probably not give the interaction with that business much thought. Word-of-mouth commentary happens when the actual customer experience differs from the expected. Delighted, wowed, or amazed customers spread positive word-of-mouth. Disappointed, disgruntled, or unsatisfied customers will spread negative.

A real life example.

The new guy on the staff has just relocated here to take the job. This morning he heard a strange grinding sound as he drove to work. New guy is worried. The disparity between his lack of knowledge about possible causes, and his pressing need for such knowledge makes him feel vulnerable.

He asks his co-workers for credible information to help him choose a solution, or at least his next step.

“Does anyone know anything about cars?” Note that he starts looking for information at the highest level of credibility - personal knowledge.

Not finding an expert among his co-workers, new guy begins to rely on word-of-mouth. Why? He's trying to lower his risk level. A bad choice in mechanics could have him paying for services he doesn't need. Worse yet, he could choose someone who won't be able to fix his problem (but will charge him for time invested anyway).

His next question: “Does anyone know a good mechanic?” addresses the most credible level of word-of-mouth – personal experience.

In the absence of such knowledge, he will quickly go down the probability scale, asking next what his co-workers have heard about mechanics in town.

Finally, he'll go to his newspaper, or to the Yellow Pages and start studying the ads to see who appears to understand his specific grinding problem, or perhaps which companies may be national chains that he's at least heard of.

Back to the beginning.

There are three levels of word-of-mouth. Only two can be effected by your advertising. The third is strictly a function of the way you operate your business.

So what are your company's values? What do you stand for? What won't you stand for? Do you consistently project those values in each interaction with customers?

Is your business not growing because potential customers don't know about you, or is it because they think they do?

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Chuck McKay is a marketing consultant who helps customers discover you, and choose your business. Questions about word-of-mouth and professional reputation may be directed to ChuckMcKay@ChuckMcKayOnLine.com.