Customer word-of-mouth has a powerful influence on business results. Consider the following:
- According to McKinsey & Company, it (WOM) is the primary factor behind 20-50% of all purchasing decisions.
- RetailCustomerExperience.com reports “twice as many people tell others about ‘bad’ service than good.”
- London School of Business says, “Strong customary advocacy on behalf of a company is one of the best predictors of top line growth.”
- According to a study by Forrester Research, the Nielsen Company, and Vizu Corporation, approximately 80 percent of customers trust word of mouth more than any other kind of information when evaluating potential purchases
What lessons can we learn and apply from customer word-of-mouth to engage high performance? How can we apply these important principles to our human capital? Here are some key questions to consider:
- Critical Listening. Organizations need robust formal and informal ways to listen to what employees are talking about? Processes like entrance and exit interviews, employee opinion surveys, hot-lines, and social media activity should complement traditional methods like town hall meetings, employee Q&A sessions, and roundtable discussions. Does your organization actively practice ‘critical listening’ of employee opinions?
- Storytelling. It is a powerful form of WOM communication. The stories your current and past employees share transmit the organization’s values and beliefs. Now add the use of social media and an employee can reach and influence large numbers of people with their feelings about your company, good or bad. What stories are current ‘and’ past employees sharing and passing on to others?
- Promoters or Distractors. Promoters are advocates for your brand and ‘encourage’ others to do business with you – buy your products and services. Distractors ‘discourage’ these actions? Are your current and past employees acting more like ‘promoters’ or ‘distractors’?
- Listening is not enough. It is only step #1. Analyzing, investigating, and taking action must also be done to improve performance and demonstrate we care. It works with customers and it works with employees too.
Word-of- mouth influences decision-making. It tends to focus on opportunities for improvement and can impact both current and future performance. Marketing has learned this – some HR groups have too. What are your employees talking about?