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The Power of Word of Mouth

The Greatest Marketing Program of All Time

Here's one more restaurant story with a lesson that has everything to do with your business, no matter what it might be. My family went to Maui on vacation. My longtime friend, fellow foodie, and fine restaurant enthusiast Kris Young told me that while on Maui, we absolutely had to go to Mama's Fish House.

Another good friend and aficionado of great restaurants, John Bledsoe, told me, "Mama's Fish House may be the most beautiful setting of any restaurant that I know of, and I'm not really even a Hawaii person."

So I asked the rest of the world what they thought of Mama's. I went on the Internet. Here's what the rest of the world told me:

• 3,104 reviews on Yelp averaging 4.5 stars out of 5.
• 5,981 reviews on TripAdvisor.com averaging 4.5 stars out of 5.
• Named second most popular restaurant in the United States by Open Table.
• Named one of the Top 10 Fine Dining restaurants in the United States by Trip Advisor.

I defy you to show me any advertising, selling, or marketing program as powerful as the overwhelmingly positive word of mouth that Mama's Fish House has going for it. It is, quite simply, the greatest marketing program of all time.

What Mama's Means to You

So we went to Mama's Fish House. I've been to great restaurants all over the world, and I will tell you without reservation that Mama's is as good as it gets. Period. I invite you to go online yourself and read what people say about it (including my own reviews). It may be the most amazing example of positive word of mouth I have ever seen. It is what drives tens of thousands of customers there to spend an insane amount of money (it's very expensive).

But the lesson of Mama's Fish House and what it means to you requires a clear understanding of how it works. All of that positive word of mouth driving all of those customers and all of that revenue to Mama's comes from three things:

1. A breathtaking setting on the Maui beach in the single most charming restaurant I've ever seen.
2. A truly wonderful staff, from the valet who parks your car to the hostess, the waitress, and every single person working there whom we interacted with. They were absolutely great.
3. The food. This is at the center of the Mama's word of mouth miracle: food like you've never tasted before. It darn near defies description.

And that's the lesson for all of us: The product is the marketing. That's the punch line. That's the silver bullet. That's the "secret of success" that everyone's looking for. To all of the people over the years who have said to me some version of "I just need something that will drive more customers to me," I say this:

1. Do great work.
2. Make a better product.
3. Give better service.

This is what will drive more customers to you. There is absolutely no force or power on planet Earth that will create more customers for a business than to have people like my friend Kris saying things like "you absolutely have to go there" to potential customers like me.

The Most Important Factor

The single most important factor in the future success of your business is this: what your customers tell people about their experience with you. What this means to you is that creating positive experiences for your customers is the single most important thing that you can do to grow your business.

Lest you think I'm overstating things or exaggerating the importance of customer word of mouth to your business, your future, and your ultimate success or failure, let me be excruciatingly clear: Nothing-absolutely nothing-affects the success of your business more than customer word of mouth. Reputation has always had a greater impact on purchase decisions than any other factor, and today, because of the Internet, the power of customer word of mouth is far, far greater than ever before. In the future, it will become even more powerful.

Customer recommendations, whether your customers are retail consumers or business to business, are your greatest driver of growth. Customer recommendations give you the magnetic power to attract business.

If statistics make your eyes glaze over, then you can skip this next section. But here's what I want you to understand down to your bones: If your business isn't focused on driving positive word of mouth, then the train is leaving the station without you. This is where your market is going. This is where your customers and potential customers are going. Your business will live or die, thrive or struggle, based on your ability to harness the power of your customers to drive new customers to you.

It's true whether you are a high-tech startup, a bar, law firm, hospital, nonprofit charitable organization, bank, consulting firm, or a retail store in the mall or on the Internet. The power of positive word of mouth isn't an "interesting" idea. This is how you will succeed and then sustain and grow your success.

For those who like numbers to go along with the blindingly obvious, here are some statistics on the effect of positive word of mouth as compiled by customer referral management company Ambassador:

1. 84 percent of consumers say they either completely or somewhat trust recommendations from family and friends about products-making these recommendations the information source ranked highest for trustworthiness. (Nielson)
2. 74 percent of consumers identify word of mouth as a key influencer in their purchasing decision. (Ogilvy/Google/TNS)
3. 68 percent trust online opinions from other consumers. (Nielson)
4. 88 percent of people have their reasons for trusting online reviews written by other consumers as much as they trust recommendations from personal contacts. (BrightLocal)
5. 72 percent say reading positive customer reviews increases their trust in a business. (BrightLocal)
6. On social media, 58 percent of consumers actively share their positive experiences with a company and ask family and friends for their opinions on brands. (SDL)
7. Word of mouth has been shown to improve marketing effectiveness by up to 54 percent. (MarketShare)
8. 84 percent of consumers reported always or sometimes taking action based on personal recommendations. 70 percent said they did the same of online consumer opinions. (Nielson)
9. 43 percent of social media users report buying a product after sharing or favoriting it on Facebook, Twitter, or Pinterest. Over half of purchases inspired by social media sharing occur within one week of sharing or favoriting, and 80 percent of purchases resulting from social media shares occur within three weeks of sharing. (VisionCritical)
10. Millennials ranked word of mouth as the #1 influencer in their purchasing decisions about clothes, packaged goods, big-ticket items (like travel and electronics), and financial products. Baby Boomers also ranked word of mouth first as the marketing influencer in their purchasing decisions about big-ticket items and financial products, and ranked it as the third-highest influencer on their decisions to buy packaged goods. (RetailGlobal)
11. 77 percent of brand conversations on social media are people looking for advice, information, or help. (Mention)

Whom Do You Ask?

In your own experience, when you are considering making a purchase, an investment, even a donation to a charitable organization, where do you go for information, guidance, and advice? Whom do you ask?

Used to be we'd ask our personal friends, our family, or our coworkers. Now, in addition to those trusted sources, we ask everybody. The way we do that is by asking the Internet.

Think about your most recent trip to the Internet to visit Yelp, TripAdvisor, Angie's List, Google Reviews, Yahoo Local Listings, City Search, Consumer Search, the Better Business Bureau, or any of the countless review and evaluation sites. In addition to those, there are industry- and profession-focused sites on which customers or members exchange information about who is doing good work and who isn't. There's the mother of all "find it on the Internet" sites: Google. And finally, there are all of the social media sites like Facebook, Instagram, Twitter, LinkedIn, and dozens more where conversations about whom to do business with take place 24/7.

Deciding to Buy (or Not to Buy)

When is the last time you made an online search for recommendations, reviews, or information? For most people the answer will certainly be within the past week. For many it will be within the past 24 hours.

You go online to search for ratings, reviews, opinions, and comments about whomever or whatever company you are considering doing business with, and generally speaking, you make your decision pretty quickly. This is especially true if the reviews and ratings tend to trend heavily in one direction or the other.

If you are considering, for example, joining a fitness club and the Yelp ratings for the club you're looking at average one star out of five, then your decision is made in that very moment. That fitness club has been declared "loser" in the eyes of its customers (or former customers), therefore it is automatically eliminated...