"Word of Mouth" advertising, or "Viral Marketing" is the best possible marketing because a happy customer will brag to all of their friends about what a great decision they made to purchase a product. They are proud of that decision, and they will tell everybody they know or meet about how smart they were to make that purchase. It's all about bragging rights, and not at all about the product itself. And, it really doesn't matter if an item is over-priced as long as they are happy with it, since expensive items tend to take on an importance of their own - just look at the diamond industry.
However, an unhappy customer will warn everyone within their circle of influence about making the same mistake. They may be embarrassed about making a dumb decision so they might not brag as much about their mistake, but they will definitely scare other potential customers away whenever the opportunity arises. Even if they are initially embarrassed about their bad decision, they eventually overcome this embarrassment by becoming an "expert" on the product and will then scare everybody away who will listen to their "expert" advice.
In the days before the Internet, this word-of-mouth advertising was limited to small, isolated circles of influence of roughly 10 or 20 people, so an unhappy customer had very little impact on potential sales. For a marketer, there were always new circles of people to approach, and the chance of negative news leaping from one circle to another was negligible. This limited amount of contact with "experts" brought rise to organizations like the BBB and Consumer Reports magazine, which became substitute experts on products that they reviewed.
The Internet has changed all of that because that same word-of-mouth advertising can now easily reach 20,000 people or more in an extremely short time. Also, one negative comment will stay on the web for many, many years and will continue to scare people away. This is part of the "social networking" aspect of the Internet, and all of the search engines are looking at ways of making social networking even easier for people to apply.
A person who owns a product becomes an "expert" on that product, so his advice becomes a valuable resource. In the days before the Internet, you would ask an "expert" that you knew for their advice about something you were thinking of buying. If you didn't have access to any expert advice, you might be much more willing to take a risk or be persuaded by a salesperson into making that buying decision.
However, "experts" are now available all over the Internet in an instant, and they are more than willing to leave their advice in chat rooms, forums, and in blogs (the "blogosphere" doubles in size every six months), etc. These experts get a thrill from seeing their opinion in print, and they are often rewarded by the very sites that invite them to leave their "expert" opinion. There is also a proliferation of "expert" web sites (like epinions.com and complaints.com) cropping up that are supported through advertising links.
"Expert" web sites are rising in popularity, and the "social network" of experts via personalized search, tagging, and blogging are expanding word-of-mouth advertising in a major way. You can make the argument that these so-called-experts know nothing, but you will never have the chance to make that argument with potential customers who do their research on the Internet before they are willing to give you their personal information. They will quietly click away, and we will never even know anything about them. You can see them as "dropped shopping carts" in your server logs, but there is no way to know why they have abandoned their carts and left the site.
This problem will continue to grow as the Internet expands and more people learn how to take advantage of it. You can push down a lot of bad press on the web, but eventually, other links will rise up. It's like trying to stuff an inflatable life-raft back into its case. Unless you let all of the air out, pushing down in one spot just makes another spot rise up. The only way that you can stop this is to "let the air out" of all the bad press on the web.
And, I'm afraid that the only way to do this is through an "old-fashioned" approach where the "customer is always right" even when the customer is wrong. In other words - if you treat your customers badly, you will spend all of your time trying to counter the bad press that appears on the web. But if you treat your customers right, you will breed an army of positive "experts" who will market your products for you...
Labels: Marketing
