You may not have realized the importance behind your customer service interactions. A positive experience can actually lead your customers to unintentionally advertise on your behalf to their friends. That’s why it’s so important to make sure every customer leaves feeling great. A bad experience could cost you big time as their voice could reach thousands of potential customers on social media.
The good news about social media is that it’s allowing happy customers to tell the world about their great experience which can lead to customers you may have never reached otherwise. Making customer service a top priority is the new norm among senior management in all companies because a great customer experience leads to increased revenue. Here is a look at how you can make more money while cutting costs on advertising by ensuring great customer service interactions.
Word of mouth advertising
Companies have started to pick up on the fact that word of mouth advertising can be their best friend. A great customer experience can lead to telling their family, their friends and social media about what a great company they worked with today. This could lead to shares on social media, those people telling others what they heard and so on and so forth.
It’s free advertising for you and it all it cost was giving your customer a great experience during their visit. Just be careful but to allow for a negative experience to take place or go unnoticed; a negative experience is 2-4 times more likely to spread through word of mouth than a positive one.
This is because people expect great service and will complain to others when they weren’t treated well, but in some cases, a positive interaction can lead to word-of-mouth advertising saving you in your own marketing expenses.
How to determine your success rate
You may need to start doing some digging to truly see the effects of your word of mouth advertising. Once you look into the percentage of customer conversions from personal referrals and how you can measure customers that came from word of mouth, you’ll start to see how this is positively affecting business.
Once you’ve determined the difference between word of mouth won customers and traditional advertising won customers, you’ll be able to decide if WOM management is the strategy to focus on the most.
In most cases, about 20%-75% of new customers will come from personal referrals allowing companies like The Cheesecake Factory to have the chance to cut down marketing expenses to less than 20% of the industry average.
How is the word of mouth for my business?
Once you’ve determined to focus on word-of-mouth for at least part of your marketing efforts, you need to look how it’s been for your company. Is it positive or negative and how is it being spread? For example, if you had 10,000 customers and 10% of them had an amazing experience, they will likely each tell two people about it which could lead to 2,000 referrals.
For the 20% that have a bad experience, they’ll each end up telling six people a piece leading to 12,000 bad reviews through word of mouth. The other 70% that were satisfied will tell at least one other person leading to 7,000 good reviews. You are still behind 3,000 people getting bad reviews more than the good reviews that are also taking place.
If you can find a way to increase this to 80% of customers being satisfied and only 10% being unhappy, you could end up ahead 4,000 customers rather than behind 3,000.
Keep these statistics in mind when you are trying to determine how important word of mouth advertising is. While a great experience can lead to your customer telling two people about your business, a bad experience can lead to six people hearing bad things about you.
A satisfied customer will be sure to tell at least one other person about the experience and these are great ways to bring in new customers. Finding a way to eliminate the bad experiences to the fullest capability in order to increase the positive experiences can lead to plenty of new customers that cost you nothing to acquire.
Focus your time, energy and funds on training and other ways to improve the customer experience and watch how your marketing expenses decrease while your new customer acquisition increases!