This Analogy Will Help You Understand the Importance of Word of Mouth

This is why it pays to be connected to your customers

Photo by Alex Alvarez on Unsplash

Happy Monday, y’all! I hope you had a wonderful weekend.

Let’s talk about the impact that customer engagement can have on Word of Mouth. I think we all understand the benefit of Word of Mouth, but have you really thought about how customer engagement can impact WOM?

In simple terms, engaging with your customers changes the behavior of your customers. In terms of Word of Mouth, your engagements and interactions with your customers will change what they say around and about your company.

Why does this matter?

Let’s think about the conversations that your customers are having right now about your company. The negative conversations are red (danger, warning, stop), and the positive conversations are blue (peaceful, calming, tranquil).

So let’s think of each type of conversation as a circle. The negative conversations are a red circle, the positive ones are a blue circle. And if you combined the two to get a visual representation of all the conversations your customers are having about your company, it would be a purple circle.

What is the role of Word of Mouth in a business setting?

The good news is that your company has the ability to change the color of the middle circle (the sum of all the conversations about your company), by its actions. If your company makes an effort to engage its customers and does so well, then the color of the conversation will take on a more blueish tint, signifying positive sentiment. On the other hand, if your company engages your customers poorly, or not at all, then the negative conversations about your company will increase, and the middle circle will take on a more bright reddish tone.

You can break each circle down even further.

For the blue circle (positive sentiment), you will have a few participants who are your biggest fans. These are the people that are having the most impact on the blue circle, because they are creating the most positive content, and they are working the hardest spread their message to others. It’s why it pays to create programs to connect directly with these special customers, such as advisory, loyalty or ambassador programs. You want to find and identify your most passionate customers, then give them the tools they need to better promote your company to others.

For the red circle (negative sentiment), there’s good news and bad news. The bad news is that the average customer is more likely to complain about a company than praise one. What’s worse, if a customer is upset with a company, 95% of the time they will complain to other customers instead of telling the company what their problem is! So the company rarely has a chance to address a complaint, but other customers will hear about it. Which means more negative chatter about your company and the red circle gets an even brighter shade of red.

The good news is that most customers will stop complaining about your company after a period of time. Most complaints happen over a single transaction, and once the customer feels that transaction has been addressed, they will often stop complaining.

So the blue circle (positive sentiment) is made up of fewer, but more passionate customers. These customers will typically continue to promote your company even if you don’t engage them. However if you do engage them, they tend to grow even more positive in the content they create about your company, and more prolific as well.

For the red circle (negative sentiment), you have many more participants (angry customers), but these participants usually only create negative content about your company for a short period of time. There will occasionally be a troll to deal with, and they do tend to create negative content for a longer period of time, but they tend to be rare, and typically move on if they aren’t engaged (giving rise to the phrase ‘don’t feed the troll’ because all it wants is attention).

Your Happy Customers Have One More Trick Up Their Sleeve

We have the red circle (negative sentiment) and the blue circle (positive sentiment), and the two combine to create a circle that represents the totality of the customer conversations about your company, and the color of that circle will typically be some shade of purple (red + blue).

However, there’s a key character trait of your happy customers that we need to discuss. Happy customers that love your company will actively seek out and engage customers who are complaining about your company! That’s right, the happy customers in the blue circle will often jump over to the red circle and directly engage upset customers.

This accomplishes two things, both of which directly benefit your company:

1 - Happy customers engaging with unhappy customers defuses the complaints of the unhappy customers. When we see a person leaving a complaint about a company, then another customer responses to them defending the company, it makes us less likely to believe or take seriously the complaint. It blunts the damage that the complaint could cause to the company.

2 - Happy customers engaging with unhappy customer can often change the mind of the unhappy customer. Often, customers are complaining about a company due to no fault of the company. It could be that a customer is unhappy with a product they purchased because they believe it is broken, when in fact the customer is misusing it. A happy customer can engage that unhappy customer directly, and provide support for them and teach them how to use the product correctly. Which can eliminate the complaint from the customer, and could actually convert the unhappy customer into a happy one!

In fact, if your happy customers are hyper-engaged with the upset customers in the red circle, they can actually improve the sentiment of the red circle so that it takes on a color closer to purple.

This is why customer engagement is so vital to the success of your company. By engaging directly with your customers, you are mobilizing and empowering the happy customers in the blue circle to generate more positive sentiment. At the same time, these happy customers will engage directly with the unhappy customers, thus reducing the likelihood that unhappy customers will generate content with negative sentiment. A true win-win for your company.

I hope you enjoy your week and if you are in the US, celebrate safely on the Fourth! The next issue will be on Thursday, it will be a bit shorter as I’ll recap my first month on Substack so you can see how it’s gone.

Talk to you on Thursday!

Mack