March 9, 2009
I took the family for lunch at Chili’s after church on Sunday. I had a coupon for a free meal as part of a promotion I enrolled in through BzzAgent.
I joined BzzAgent last year at the recommendation of a friend who suggested joining as a way to get advanced copies on new marketing books. This led to a preview of Seth Godin’s latest title but more interestingly, to a bunch of other marketing programs.
You see BzzAgent is kind of a premier word of mouth marketing (WOMM) agency. You and I all understand and probably practice WOMM every day. The difference is that BzzAgent actually encourages it –even facilitates it with coupons and samples — and then documents the efforts for their clients.
WOMM is amazingly powerful so much so that studies are beginning to emerge (alongside agencies) documenting the effect. The authors of Middle Class Millionaire: The Rise of The New Rich and How They are Changing America noted that their research showed so-called Middle-Class Millionaires (those with assets of $2-10mill) were much more likely than non-millionaires and those with assets of $25mill plus to actively give recommendations about products and services to their friends and associates.
Why not the upper end of the spectrum? When those folks find something really good, they hold onto it and keep it a secret less they lose their edge. Why not the non-millionaires? Those folks are less likely to look to their friends for advice, instead opting to do their own research on the web or via Consumer Reports.
The book goes on to 250+ more pages of scenarios but the results of this one point are amazing for businesses who get their business on referral. Essentially what they have documented is the key to growing a great many businesses whose best prospect falls into this demographic (which is packed with entrepreneurs, professionals and small business owners). If you’re currently serving this space, thing about how WOMM might benefit your business.
May 22, 2007
Shortly after I left Microsoft a few alumni friends introduced me to LinkedIn. I didn’t really understand it to begin with and have to admit that I have not taken full advantage of the opportunities that it presents. But over time as I periodically receive invitations from people I know (and some that I don’t), I’ve become more intrigued with the opportunities inside. I see how LinkedIn is going to play an important part in not only referral marketing (can you connect me with…?) but also in establishing credibility (wow, look at all the people you know).
LinkedIn has also secured a position for itself in the new social media newsroom. I think that is a great thing. Unfortunately it appears to be opening the doors to spam. Check out the pitch that Todd Defren recently received from Malibu Rum.
I share this with you as example number 1 of how PR Pros Should NOT use social media tools to engage bloggers.
April 24, 2007
On the recommendation of a colleague, I read Gitomer’s Little Red Book. Filled with interesting ideas. Some of them are pretty good but I’m not an over the top enthusiast. As a matter of fact, it wasn’t until I read the book that I realized I’d been seeing Gitomer’s column in the Business Chronicle each week. I didn’t much care for the column so the connection had been missed. Until this week when I found that Gitomer and I share a common bond: When you ask for a Coke it is not okay to bring me a Pepsi.
Gitomer’s April 23 column goes on to explain his love affair with Coke. I’ll spare the details but the point is pretty good. When the customer asks for one thing, why would you think it is okay to substitute something else. If they say color, do you think black and white will do? If they ask for it tomorrow, why do you think next week will suffice?
Customer satisfaction is the number one reason for repeat business. It’s not location, price or selection. It’s customer satisfaction. So what kind of value should you assign to delivering the highest customer satisfaction? It’s priceless. Does this mean that you should abandon your core competency and offer a product to a customer that you don’t sell? Not necessarily.
You should stick to what you are good at but you should surround yourself with great relationships so when the client says RED and you only have BLUE to offer you can easily call your associate who sells RED and either get one for your client or refer your client to your friend. Either way your client will be happy. And don’t fear losing a client because you referred them to another business. In almost every case the client will have loads more respect for the effort you made to bring them satisfaction — even if you didn’t make a $1 in the transaction — and they’ll demonstrate that respect in the loyalty they have for your business down the road.
April 17, 2007
I was in Wachovia today and found they were running a referral program where I would receive $25 automatically deposited into my account each time I sent them a new customer. The person who opened the new account would also get $25.
Is this really a good promotion for Wachovia? Are the kinds of people who open an account to get a $25 incentive really the types of banking clients that will ultimately make Wachovia money?
In some instances, cash incentives work great but I’m not sure banking is one of them. Don’t get me wrong, I love free money, but you have to ask yourself — was this really a good promotion for Wachovia? Does the offer of $25 make me any more likely to refer a friend or business associate? And what’s the ROI on that $25 promotion for the bank?
The problem here is that Wachovia is essentially paying for referrals and that’s not part of their normal business model. Referral fees and commissions are a common part of the compensation model for commercial printers and pharmaceutical companies. Banks market their business with services and rates. Any promotion they select to run needs to be complementary to their business.
What Wachovia should have done was to offer me and/or my referral some complimentary services OR access to a new product OR better rates. Any of those would have encouraged me to become more invested as their customer — essentially creating the loyalty they want and need from their customers and referral sources.
Be careful when constructing a a referral promotion. Avoid promotions which encourage you or your customer to do something that is unnatural for your business or business relationship. When you construct a program that provides value for both you and your customer, everybody wins.