Manizesto

Between building secret forts, filling the local park with boobie traps and imitating Michael Jordan’s game-winning shots, my best childhood friend and I came up with the ultimate scheme to get rich (besides protecting my Bo Jackson rookie card with my life).

Using our new-found knowledge from school, we took four Kingsford charcoal briquets from my friend’s dad’s garage, dug a 8-inch hole in his yard, inserted the briquets and covered them with dirt and bark dust. It would only be a matter of time before those four briquets morphed into four beautiful diamonds and then we would be rich!

After seven excruciating days, we unearthed our would-be diamonds; alas, they were still but coal. A month later, the same. Faith waned and disappointment grew, until finally we realized our teachers had no idea what they were talking about: coal turns into diamonds! What a crock!

Understanding the principle that diamonds are made from coal buried in the earth is much, much different than understanding how the process actually works, i.e. extreme heat, pressure and time are needed. That’s why our hastily buried Kingsfords, of course, had no chance.

And that’s why:
- Just sending a marketing email with a discount isn’t enough. You must understand how you’re going to measure performance, how the timing, tracking and fulfillment will work, what the long-term effects are for having the offer, and so forth.

- Cost per acquisition is a nice number to know, but what is your cost per acquisition per channel over the life of the customer, and how can you maximize that investment?

- Cutting marketing expenses because the effort is not producing results is a good way to save money, but are you forgetting about the indirect, un-trackable effects that may result in an overall drop in sales?

- Expanding your marketing into new areas just because your competitors are, without setting clear expectations and thinking through if this is the best strategy for you can be a big mistake.

Understanding that certain things happen is not enough, you must understand the reason they do.

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I recently put on a webinar with Tyrona Heath from Google to talk about how to get started with online advertising on Google’s Adwords program. It’s a great intro into paid search advertising (PPC) and provides some really great insights for people who want to hear from the horse’s mouth how to do a great job with your Adwords campaign. The focus of this presentation was for small business owners.

It’s about an hour long, but well worth it if you’re new to Adwords.

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Last week, I emailed my portfolio manager to find out if one of my investments was now worthless. I figured he’s probably getting hundreds of emails just like mine, but I might as well ask.

Surprisingly, I got a response the next day. His response was bleak, truthful and direct.

“Thanks for your email. You’re right, your investment has little to no value now, but don’t lose all hope. With the bailout measures, there’s a possibility you’ll still can come out with something.”

It was crappy news to hear, but much better than the glossed-over, templated, rosy response I got from another company:

“Dear JONATHAN,

The extraordinary events of the past few weeks have tested the portfolios and the confidence of investors around the world.

We understand.

Rest assured that in times of market volatility, we retains the strength and stability that you’ve come to expect from us.

As the markets continue to fluctuate, keep in mind:

• Market volatility is normal, and is to be expected.
• Your investments should reflect your risk tolerance and investment time frame.
• Stay focused on your long-term goals.

We have 60 years of experience providing our customers with the service they need to help them feel confident about where they stand, even through changing market situations. We’re here to do the same for you.”

In both these emails, the companies are giving me bad news. And both are trying to keep me from panicking. Both want you to leave thinking “it’s bad, but could be worse, and it might even get better.”

Even though the portfolio manager’s email was blunt, unpolished and direct, it was so much more effective than the massaged, legal-approved message. It tells it like it is. It doesn’t make me read between the lines. It’s personal. It’s the truth. And that is what builds relationships and trust.

When you’re wondering how to tell customers, vendors or employees bad news, be real, be direct, and tell the truth. It may be painful news, but you’ll have a much better chance of keeping or restoring that relationship than if you gloss over the truth and leave people unsure.

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Things are tough for many small businesses right now. With the financial markets upside down and financing hard to come by, many entrepreneurs are wondering if now is the time they should cut back on marketing spending right now or invest in new innovative marketing campaigns.

I recently had the opportunity to ask Kim Sheehan, influential small business marketing expert and author of Building Buzz to Beat the Big Boys, if getting starting a Word of Mouth Marketing campaign is the right thing to do given the current economic conditions. Here’s what she had to say:

Manizesto: With the slow economy and scary things happening on Wall Street, many entrepreneurs are concerned about whether they should be expanding or contracting their marketing efforts. Most recently, Progressive Insurance has dramatically increased their TV ad budgets, while many others have cut back. What’s a small business owner to do?

Kim: We think Progressive has it right: don’t cut back. Here’s why. Your market share is related to your share of voice: that is, the amount you spent to promote your business relative to your competition. So if you don’t cut back, and your competitors do, then your share of voice will go up, and that should have a positive effect on your share of market. Studies have shown that this is true: that companies that don’t cut back during recessions end up in better shape at the end of the recession and, perhaps more importantly, build their business back up more quickly after the recession is over.

Manizesto: Your most recent book is all about word-of-mouth (WOM) marketing. How is WOM different than traditional online marketing or viral marketing?

Kim: WOM is a process of finding the best people to talk up your business with their friends, family and colleagues and then finding the best information to share with them so they’ll have something that they’re excited about sharing with others. This ‘sharing‘ process can happen in person and/or online…it depends on what works best for your customers. In fact, we see WOM as a way to develop an engaging dialogue with your customers…listen to what they love, and what they want to change. In this way, having a WOM campaign can deepen loyalty among your best customers.

Manizesto: What’s the best way to get started with WOM marketing? It must be more than just saying “Tell your friends!”

Kim: The first thing is to identify the best people to be advocates for your business. In our book we refer to them as the family: those people who are loyal customers, and who probably already say positive things about your. Then you have to share things with them that they can tell their friends about. It is not enough to hope they have a good experience at your store and that they’ll tell their friends. Tell the ‘family’ about service awards, about new products, about special items, and THEN ask them to tell their friends. Once they start telling their friends, recognize their help with some type of thank you…a mention in your email, a one-time discount, membership in a club, something like that.

Manizesto: Many small business owners are worrying about what to do with their marketing programs right now. Shouldn’t they focus on more traditional marketing programs like paid search, email marketing, radio and print ads rather than branching out into WOM marketing?

Kim: Today, people rely on lots of different information sources to make decisions. Interestingly, people rely more on friends, family and colleagues than they do on almost every other type of information. Another thing to think about is that now isn’t the best time to go after new customers, as people turn to businesses that they know and trust in a recession. Traditional media does a great job of reaching new customers, but WOM does better to remind people of their good experiences and to get previous customers back to your business.

Manizesto: In your book you talk about the importance of establishing customer communities. Can you define what that is and how they can help with marketing?

Kim: Customer communities are a place where people can gather to share a ‘social glue’ that’s associated with your store. Think of bookstores that offer cafes and craft stores that offer tables where people can gather and work on their crafts: these are examples of ‘instore’ communities. Starbucks has an online community where people can talk about books that are sold in Starbucks stores, and the sporting goods store Bass Pro Shop where customers can share information about good hunting and fishing sites, and share photos of their outdoor activities. These communities are great for businesses since it allows you to listen to what your customers are doing, and to find out a deep level of information about them that will help you decide what products and/or services to offer to them. Additionally, a community allows customers to constantly come back to place of business, either online or in person, which deepens their commitment to your business. Plus, customers may invite their friends to come to the community too…which is another way to get the WOM process going.

Manizesto: What is the best way to get customers excited about your company?

Kim: First, businesses have to consistently offer good service, good prices, and products customers want. The key is consistency: people are looking for businesses they know and trust and rely on. Then, get people excited by offering them special treats. Have snacks in the waiting room, send them a coupon via email that is good for one day only, invite them to a special event at your place of business that relates to your business and your social glue. Surprises get people excited and get people talking.

Manizesto: What advantages do small businesses have over large companies In using innovative WOM marketing techniques?

Kim: Flexibility and nimbleness. Small businesses can listen to their customers and instantly make changes in their marketing programs and their messages. If all of the sudden your customers want to know more about a certain topic: about new fuel efficient cars, about new trends in holiday entertaining, about low cost gift ideas, you can get that information to them immediately. You don’t have to wait for corporate buy in or for the next advertising cycle. Small businesses are very close to their customers…go out and talk to them every day to see what they’re thinking about, and find ways to make their lives easier.

Manizesto: Is there a place for word-of-mouth marketing in B to B companies?

Kim: Absolutely. A B-to-B company is going to have its ‘family’ just like any other business. Find these people, and give them information they need to share with others in their company. Some might also want to share the information with businesses in complementary fields. If you’re a small printing business, for example, give customers a reason to pick you over the big box store for printing their stationery: offer free pick up and delivery, give a personal touch and professional expertise to other small businesses and you’ll start WOM .

Manizesto: How costly is it to implement a WOM marketing initiative?

Kim: The biggest cost is probably in terms of time. Listening to customers, creating messages and sending them out, monitoring what customers are doing..all these things take time and most small businesses owners already have a lot on their plates. One idea is to get your staff involved in starting the dialogue with customers, and make your WOM effort something everyone in the business is involved in. Our book has lots of tips to do this.

Manizesto: Something I like to ask everyone: What’s the most daring marketing initiative (WOM or otherwise) that actually worked?

Kim: This is one of my favorite stories, and it happened to me. My Subaru Forrester had a funky smell coming out of the engine, and I took it in to my mechanic (Euro-Asian Automotive in Eugene, Oregon). The mechanic checked out and found there was a leak and probably a small crack in the head gasket (I don’t know what that means, exactly, but I know it is expensive to fix). Then, the mechanic did a bit of research, made a few phone calls, and then called me to tell me that there was a problem, but the repair would be covered by Subaru. He even gave me the name and direct line to the service professional he spoke to at our local Subaru dealer. So instead of getting a several-thousand dollar repair for himself, he saved me a lot of money. And for this, he has my undying loyalty and I tell this story to anyone who will listen. I encourage all my neighbors to patronize Euro-Asian…even for a simple oil change. This is a great example of building a very high level of trust with a customer.

You can order Kim’s book, Building Buzz to Beat the Big Boys, right here. It’s a good read and full of good ideas on how to use inexpensive, word of mouth marketing to expand your business.

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Kim Sheehan is Associate Professor at the School of Journalism and Communication at the University of Oregon and co-director of the Center for Strategic Creativity at the Turnbull Center in Portland. With Steve O’Leary, she authored “Building Buzz to Beat the Big Boys: Word of Mouth Marketing for Small Business”. She has also written books on advertising research and advertising ethics, and has published extensively on topics regarding advertising and new technology. She blogs daily about small business and marketing at www.grabbinggreen.com. Kim lives in Eugene, Oregon with her lovely husband, two dogs, two cats, a bird, and her alpaca cria Brownie, who has her own blog.

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