The Disadvantages of Word-of-Mouth Marketing

Good word-of-mouth marketing is the holy grail of advertising. It’s a source of free promotion of your product or service from a credible source — a satisfied customer. It’s powerful. In an April 2012 report on its Global Trust in Advertising survey, Nielsen reported that 92 percent of consumers said they trust friends and family’s recommendations above all other forms of marketing. The Word of Mouth Marketing Association, or WOMMA, says that this kind of personal connection drives some 54 percent of purchase decisions. It’s also ubiquitous. WOMMA claims 2.4 billion brand-mentioning conversations happen every day in the United States — but word of mouth can cut both ways. According to marketing guru Seth Godin, word of mouth happens when you’ve delighted a customer and when you’ve disappointed or angered one. It’s the latter scenario that bring about the most troubling disadvantages of this form of marketing.

Simply put, your customer’s rave reviews about your product or service comes at that customer’s good will — and his memory. You can’t make it happen, nor can you count on a customer remembering to refer prospective clients your way when an opportunity presents itself. They could even be afraid of ruining your business if you get too popular and their best-kept secret gets out. They might keep mum. Unlike paid advertising, through which you choose the channel, the audience, and the timing of messages, word-of-mouth marketing is largely a product of chance.

You can’t control or censor what your customers say about you. With innumerable outlets to pour out both positive and negative experiences with you, especially social media and online review websites, word-of-mouth marketing shows its downsides when a single unsatisfied customers, with choruses from your ruthless competitors, take to the air waves to bash your product or service. Even with positive word-of-mouth marketing, you have little control over an important marketing pillar: positioning. Your satisfied customers may peg you as being the greatest and most affordable supplier of a service when your marketing plans called for going after the luxury, high-end portion of your market. In this case, earned media and aggressive public relations can help you influence “the story” about your business.

Word-of-mouth marketing can’t be relied upon as a primary source of marketing for your business. Once the buzz stops, interest and knowledge of your product can come to a complete standstill. Rather, word of mouth works well when it supplements a full-scale marketing effort that tells the complete story of your company through multiple outlets.

As a small-business owner, you may already be sold on the value of word-of-mouth marketing, but you should be cautious of another of its potential pitfalls: unscrupulous practices to generate buzz about a business. For example, paying people to talk positively about a product, or negatively about a competitor’s product, without revealing the agreement is known as "shilling," and is considered unethical. Some small business owners can go as far as creating fake identities and posting product promotions on websites to generate talk. In the extreme, some companies have retaliated against customers for vocal complaints. Good word of mouth comes from good products and services, not trickery or abuse.

Spark word of mouth by exceeding your customer’s expectations every time. There’s no substitute for a job well done. That’s what your reputation is founded on, and there’s no argument against a multitude of satisfied customers. Ask for a referral, says Inc. magazine expert Nancy Michaels. After establishing a track record and building a relationship with your customers, you’re in a great position to petition your customers to “return the favor” of a job well done with a little friendly referral. WOMMA recommends developing tools to make telling others about your service as easy as possible. These can include online forums, feedback tools, and increased presence on social networks.