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Word-of-mouth marketing pitfalls

Updated: May 2

The pitfalls of a marketing gem

Word of mouth is the best kind of marketing, right? You don’t pay for it, and its credibility is better than paid advertising. It’s one of the best means of building your business, I agree. But there are downfalls you probably haven’t considered and won’t realise until it’s too late.

If you want to focus your marketing efforts around building referrals and word of mouth, consider the following before you finalise your marketing strategy.

The downside of word of mouth marketing

  • You might be alienating your customers

  • A deeply engraved marketing message can be impossible to reverse

Let me share two examples to help illustrate the pitfalls of word of mouth marketing. These are personal experiences. One is my experience as a customer when I moved to a new town, and the other is a valuable lesson I learned as a member of a marketing team.

Are you alienating your customers?

The story of moving to a small town

When business is steady, you’ll be thankful you don’t need to advertise. You’ll save money, time and get to go about your business. Life is good.

Consider the new resident in town. The person who doesn’t know anyone yet. How will they find you? If you’re business all word of mouth, they might feel left out and give up if it’s too hard to connect with you.

I live in a relatively small town of 70,000 people who shop locally, value supporting homegrown businesses and are eager to write a glowing testimonial.

The town has a strong word of mouth network which is great for all small businesses. But let me tell you as a customer, it sucks.

Make it easy for customers to find you

From finding activities for my kids or local events, I’ve felt left in the dark numerous times. These events fill up fast and they don’t need to spend money on external marketing, which is fantastic for them. But as a potential customer looking for products and services, it feels like I’ve walked into a high school clique.

Whenever I need something and a local google search is fruitless, I’m forced to ask around to find what I need. Yes, a personal referral is powerful and will benefit the local business, but let me say again that this process for the customer is draining.

Make it easy for customers to find you. Your business might be going strong, and you have more customers than you need, but these times won’t last forever. A simple website or an active Facebook page is a great start.

Your reputation can be hard to reverse

What it looks like when you're product is too popular

I had the unique opportunity to work for a minor league baseball team in the United States. They were the hottest ticket in town. Not because the team had a winning record (they were far from it), but because the games were family-friendly, inexpensive and one of the best ways to spend a summer evening.

For years, the St Paul Saints team played in front of a sold-out stadium. Tickets were so hot that businesses signed advertising contracts just to get group tickets. Tickets with a face value of $20 were donated to charities and went for ten times that amount. Fans who missed out buying tickets months ahead of time watched from outside the fence.

You get the picture. Tickets to a Saints game were hard to get. This message got around and kept tickets in high ticket demand for years.

Great word of mouth is magical, but when the message is engraved so deeply, it can be impossible to reverse.

One day late in the season, reality hit. The team unexpectedly made the playoffs, and three home games meant (for the first time in years) tickets were available. The ticket manager assumed a few radio ads and an email blast would result in another sell-out.

Far from it. For eight hours, everyone in the office made phone calls to the entire database telling fans, advertisers and suppliers the playoff game was not sold out. Let me tell you from first-hand experience it wasn’t easy. Most of the loyal fans we called thought we were joking.

The marketing strategy changed the next year. The marketing messages were crafted to change the mindset that tickets were in demand but not impossible to get.

When word of mouth works, it’s fantastic. But don’t put all your eggs in one basket.

Pitfalls of Word of Mouth Marketing

  • Lack of control over message and customer perception

  • Customers may feel like outsiders

  • Word of mouth probably won’t sustain you through the slow times

  • Can take time to spread (but seems to move quickly when the message is negative)

  • Potential customers only hear what they want to hear and are upset when you don’t deliver their imagined expectations

Don’t hide

Be thankful if you have a positive flow of customers through word of mouth but think about the new person in town. Reach out to them and diversify how you promote your products and services. When business is slow, you’ll have the advantage.

Everyone should have a website and social media is free – so no excuses. If someone types in your business, you must be findable on Google.

Keep talking

Think about what you’d do if all your customers left. Where would you be if you had to start over? Does anyone outside your client base know who you are? You may not be active on social media or even have a website because you never needed one. But if your current customers disappear, does anyone know who you are?

If you’re one of those lucky businesses that have thrived on word of mouth, take a moment and consider the new person in town and the doomsday scenario of losing all your clients. Add a few marketing projects into your mix that will engage more people with your business. You’ll be glad you did.

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