Increase Sales Blog

Posts Tagged ‘word of mouth’

Common sense dictates that repurchases will increase sales. Also when customers continue to buy your products or services, time after time, your business saves money because you do not have to go to extraordinary means to market to them. Yes, you still reach out to them even McDonald’s does that, but the added value is they share their experiences with others and word of mouth advertising is the best kind.

A study by Epilson a significant gap in the marketplace specific to repurchasing of 7 products or services revealed that on average 60% of the buyers would not repurchase from their existing vendor. Auto insurance customers had the greatest loyalty of 58% to their providers while credit card companies had the worst repurchase rate of 27% and beat out communication service companies whose rate was 39%.

Another interesting fact was how buyers made decisions. The product reviews on websites, friends and family, sales person and the brand’s website all contributed or probably influenced the buyer. What is interesting to note is that the seller e.g. the sales person or the insurance agent  never was the first influencer of the buying decision process. Friends and family, product reviews and the brands’ websites were the first  influential source. What was quite surprising is for the products surveyed, email was the preferred channel to receive information.

When customers fails to repurchase, they also fail to recommend and this only reduces the bottom line. In the book The Ultimate Question, the author suggest it costs 7 to 10 times more to acquire a new customer than to keep an existing one. Now the only firms making any money off these non-repeat customers are probably the marketing firms who are eager to show what they can do to stem the tide of those fleeing customers.

What this means for any business or organization is to:

1. Determine why your customers are not repurchasing your products or services because you cannot outgrow losses
2. Establish a written customer loyalty plan within your overall business action plan

By taking this actions, you can be the Red jacket, stand away from your competition, increase sales and while still reducing costs. Now isn’t that a truly better place to be?

Marketing is all about attracting attention (positive) with the goal to increase sales.  One of the best ways is word of mouth (WoM).  A posting late last year to this blog Return on Behavior said that spending on WoM in 2008 rose by 14.2% to $1.54 billion in the US despite the recession. Additionally, there is a prediction that this figure may almost double to $3 billion by 2013. (Source: PQ Media and WOMMA)

Wikipedia defines Word of Mouth (WoM) as the passing of information from person to person. In modern marketing, WoM is all about getting that buzz, spreading your marketing message like a virus (viral marketing) where very quickly everyone knows about you. This is one reason why having search engine friendly websites to including social media into your overall marketing action plan goals are so critical in today’s technology driven society.

WoM marketing is also directly connected to building customer loyalty. When your loyal customers tell others about your products or services, then they are spreading the good news that is priceless. Of course, you may need to encourage them through reward or incentives programs such as frequent fliers miles, customer service satisfaction online surveys with the promise of a 15% coupon (thank you J.C. Penney), etc.

The encouragement practice is newer as WoM always existed. Now innovative marketers are looking as to how to expedite that buzz. To learn more about this newer marketing strategy, you may wish to read Word of Mouth Marketing: How Smart Companies Get People Talking by Andy Sernovitz.

Finally, WoM helps to strengthen your own brand. In a highly crowded and competitive marketplace, you truly must Be the Red Jacket in a Sea of Gray Suits and WoM helps you do just that. Sales Training Coaching Tip: Remember, you must continually strive to be ahead of the flow and not just with the flow.