For decades, promoting any business was relatively easy. The options were limited and pretty much the same for everyone.
The only advantage a competitor would have was how much money the company was willing to spend.
The typical starting point for every HVAC construction company was a Yellow Pages advertisement. Mostly because the basic listing was free for all businesses with option to one-up your competitor by buying a display ad. The bigger your budget, the bigger your ad. You could even own a whole page.
If you wanted to be a little more visible in your community on occasion, you could have easily bought an ad in your local newspaper, because just about everybody read the daily paper.
To really make an impact, the truly embolden laid out even more money to get heard on one of the local radio stations. Television on the other hand was not much of an option for many because it just cost too much.
Until quite recently, word of mouth was looked on as a quaint concept that only influenced a small percentage purchase decisions. It was more like neighbors chatting over the fence and asking who did their recent home renovation or where they got their car fixed. You know, just a casual conversation that was never measured and assumed never really impacted anyone’s business that much.
So what happened? The internet. Unlike other technologies that affect one industry, the internet has gutted many of the traditional advertising mediums. Just look at some of these statistics:
- Newspaper print advertising revenues since 2003: down 52 percent (Pew Research)
- Newspaper per capita readership since mid-1980s: Down 66 percent (National Newspaper Association)
- SuperPages ad pages since 2010: down 60 percent (Blumenthals.com)
- Radio news audience since 1980: down 40 percent (Brookings)
- Television news audience since 1980: Down 50 percent (Brookings)
It started with Google and it wasn’t long before they destroyed the Yellow Pages business model. Next was an untold number of social media platforms that now let customers talk amongst each other in front of you, about your HVAC sales business. What were once one-on-one conversations has now become talking to many at once. It used to be that if someone didn’t like your service they told 10 people. The average Facebook user has just over 300 friends, so now when they complain or praise, every one of their friends may hear about it — instantly.
Those over-the-fence conversations, comments or complaints are now being broadcasted across the web to live permanently in digital space, because everyone is sharing their opinions and experiences with everyone. So from a business perspective, this provides both a problem and an opportunity. The problem is that people are broadcasting how your business treated them.
If their experience was positive, no problem. Social media gives you the opportunity to thank them publicly for their patronage and for all their friends to see and shine a good light on your business.
But if their experience was negative, how you handle the situation is equally important. In this situation, the opportunity is that you now actually hear about an issue and now you can show all who are watching that you care. Ignore negative comments at your peril. Like it or not, this is the new reality and this is the new word of mouth.
You may assume it is only millennials or generation X that are using social media. But you’d be very wrong. Many baby boomers are also participating in social media. The internet, combined with social media, has helped to supercharge the power of word of mouth. Understanding and managing it could give your business a competitive advantage, but first you have to get the basics right.
What is the first thing most of us do when we want check out a company we are thinking of doing business with? You look for it on Google, right? So considering that it’s one of the very first things many people do, why do 50 percent of small businesses not have a website?
A website is a big part of word of mouth. It’s the first impression your customers see. Regardless how good your work is, customers want to see a website. It makes you credible. If you’re not visible on the web, you become invisible. Customers will move on.
Not totally convinced that word of mouth is growing in importance? Here are eight key statistics you need to know.
- 92 percent of consumers say they either completely or somewhat trust recommendations from family and friends about products and are considered to be ranked the highest for trustworthiness (Nielsen).
- 74 percent of consumers identify word of mouth as a key influencer in purchase decisions (Ogilvy)
- 88 percent trust online reviews as much as personal contacts (BrightLocal)
- 72 percent say reading a positive review increases their trust in a business (BrightLocal)
- 84 percent of consumers took action based on personal recommendations (Nielsen)
- 88 percent of business-to-business purchasers look to offline and online word of mouth as an information source (BaseOne)
- 66 percent of respondents under age 34 are more likely to refer after receiving social recognition (Software Advice)
- 77 percent of brand conversations on social media are people looking for information or help (Mention)
All these interactions and conversations are now happening online for everyone to read. This activity is only going to get more intense as gen Y becomes your key demographic as the boomers decline in importance. Gen Y already outnumbers the boomers in total population and are reshaping how decisions are made.
Here’s a quote from Alcatel-Lucent, now called Nokia, that might put things into perspective: “The way Gen Yers use technology as an extension of who they are — sociable, confident, well-informed and open-minded. On the flip side, having a virtual world of information at their fingertips has made gen Y the most impatient, advertising-skeptic, buyer-aware public we’ve ever known.”
So what are you doing to be engaged in the new reality of word of mouth?
Greg Weatherdon is the author of Get More Life Out of Your Business. His entrepreneurial journey allowed him to retire at 50 and he is now a speaker at industry conferences where he offers his audiences practical tips on making their businesses more profitable. For more information on Weatherdon, his blog and podcast, visit www.gregweatherdon.com.