Small Co. Successes


One (of the many) advantages small companies have over big companies, like General Motors (at least they blog, see Fastlane executive GM blog here)  and Toyota Motor Corp., are smaller, spent-more-wisely marketing budgets.  Mega automakers spend millions on interruption (one-way, traditional advertising) marketing.  Auto commercials have been shouting at us during prime time shows and sporting events since the advent of televsion.  Few industries spend more on television and cable advertising than auto makers.    Enter a new trend!  An article from Wall St. Journal (9-1-06) (Requires $$ or 2-week free trial) demonstrates smart marketing-advertising by GM,
Toyota and others. 

Based on the insights that at any given time, only 5 million Americans are actively car shopping, a clever group decided to offer the auto buying experience a shot in the arm.   The WSJ article talks about a buyer, Dave Adler, who was zeroing in a newSaturn Sky roadster, but still wanted to do some comparisons with competitive models. Instead of either spending hours visiting multiple showrooms to test drive, or logging onto a Web site, Adler grabbed his remote and switched on DriverTV.  DriverTV is a cable television station that allows you to compare the capabilities of different cars via video on demand. The cable channel offers clips showing different car models driving down a stretch of road. 

 How cool is that?  (Who knew television had some life left beyond serving as a platform for my TiVo and digital video recorder?)   

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Three diverse companies that have had long-term and short-term success with word of mouth marketing are Jones Soda, Sprint/Nextel and Stormhoek Vinyards (a South African winery).   Below is my summary of how they applied word of mouth marketing to grow.  Maybe there are some parallel lessons for your company.

 

 

Jones Soda (their complete story is here) began as a beverage distributor in the late 1980s and by 1996 had established its own unique brand, in an industry full of Coke-and-Pepsi behemoths.  In the words of the founder and CEO Peter van Stolk, “The big guys spill more soda in a day than we sell.”   Jones Soda built their popular brand from the ground up, getting to know their customers (teens and young adults) and selling soda at Xtreme sports events, tattoo parlors and independent music stores. They created passionate fans—even using customers’ own photos on their unique soda bottle labels.  Jones Soda is now available at national retailers such as Panera, Barnes & Noble, and Target and has expanded into a successful online music store, MyJonesMusic.com. And it all started with word-of-mouth, grassroots marketing.

 

 

 

Sprint/Nextel recently launched the Sprint Ambassador program.  The company leveraged the blogosphere by offering a free phone and six months service to about 400 bloggers. The result was 389,000 hits on Google, said David Dickey, Sprint online and interactive advertising manager.  “We have more than dipped our toes in the space now,” he said, according to www.DMNews.com  Sprint experienced the risk of the lack of control that is typical in word-of-mouth marketing.

 

 

Mr. Dickey said that the effort generated both positive and negative feedback on the brand. Sprint’s experience demonstrates that businesses must prepare themselves for anything and define specific success metrics before beginning word of mouth marketing. Word of mouth requires that marketers and business owners keep a close watch on what is said about their brand and how the conversation impacts the specific initiative.  

Stormhoek Vineyards is a South African winery that wanted to increase sales of their wines in England and France. They knew that had to do something to make them stand out in a cluttered market. So last year they turned to Hugh Macleod, a well-known European blogger and artist known for cartoons that are drawn on the back of business cards.

Macleod set up a program where he offered a free bottle of Stormhoek wine to the first 100 bloggers each in England and France who contacted him. In order to receive a free bottle the bloggers had to be of legal drinking age, been actively blogging for at least three months and live in either England or France. They were not required to talk about the wine.

What happened was that they did, indeed, talk about the wine and as a result created enormous buzz in the industry. All the talk stimulated sales and the result was that Stormhoek doubled its sales within a year. They have embraced blogging and WOM. If you follow the link to their site you’ll see that it is not a traditional web site but in blog format. Total cost, $400 of blogging software and whatever they paid Macleod. We are sure it was significantly less than the ad budgets ofNapa
Valley vintners who attempt to grow market share.
  

Here is a blog post   from a U.K. blogger talking about Stormhoek’s rapid, international growth stimulated in large part from their use of blogs & established bloggers.    

Lessons learned:

1. Use blogging to reach your market and grow your business.

2. Reach out (respectfully) to bloggers with good followings in your target market.  Make a create offer to get them engaged with your products or service.

3. Take action based on the feedback from the blogosphere.  It is gold.   It is some of the most cost-effective market research you will ever obtain.

                                                   

B2B Marketing Trends has an excellent article that summarizes good public relations news for small business selling to businesses. 

According to B2B Marketing, today:

  • More than 30 million Americans a month use Yahoo! News and Google News, according to Nielsen/Net ratings from 2004.

  • More than 70 percent of Americans use a search engine news portal

  • And 84 percent use a search engine to find information, products and services

Small businesses can take advantage of the lowly press release and tap the best of both worlds—marketing and public relations.  In the old economy, businesses were subject to the whims of major media outlets (journalists/reporters and editors) in order to get coverage. Now the new, new press release can help you generate website visits and sales leads.                                                                                                                   

You can use any of the wire services to distribute the release.  I like PRWeb.  They provide educational webinars and their staff is always available to answer questions.)  Key to driving web visitors and sales leads, is using keywords and embedding hyperlinks that your prospects are likely to use when searching for products and services.

The B2B Marketing Trends’ article highlights a success story: 

  • It’s easy to measure successes in marketing PR campaigns – you either generate sales leads or you don’t. Leade Health, a provider of health coaching services and an HRmarketer.com client, measures its success in Web traffic and search engine visibility, both of which generate tangible leads. They consider media placements a means to an end.

  • Since the company started sending marketing press releases in early 2006, Web site traffic has jumped considerably – a recent white paper announcement netted 400 downloads. Another key metric for Leade Health is SEO success; Leade’s goal was to appear on Google’s front page when potential customers entered targeted keyword phrases. Releases contained relevant words and phrases, which were included as hyperlinks back to the company’s Web site. Before Marketing PR campaigns, the firm was not even in Google’s top 100. Today, a search for “health coaching” finds the company squarely on page one.                                                                                                                  

Leade Health followed the sage advice of David Meerman Scott, one of my favorite bloggers, Web Ink Now.  Check out David’s smart, free e-Book, The New Rules of PR.
                                                                                                                                

So, dust off that press release, enter your keywords and leverage the web!   When should you send a press release?  When you have a customer success story (testimonial) , when you have a new white paper or article, or any time you have a new solution for the biggest problems facing your customers.       

We hear about overnight success stories of marketing and selling lots of products and services via the web, in a short time.  In the new world of customers who are completely-in-charge of when they learn about and analyze new products and services it’s fun to find out exactly how some of these successes unfold.   So at Small Company, Big Image, we like to share examples of companies that have gotten it right.

Under Development, Inc., with their new product, The Beer Belly, is a brand new company that did just that.  I posted about the entrepreneur and his successful product launch here.

My partner, Jim Butz, recorded an interview with Under Development’s president, Brooks Lambert, and if you have 14 extra minutes you might want to listen to his success story.  The audio file (Podcast) is here—you can listen on a PC, iPod or other MP3 player.  You can download the file (download takes about 3 minutes to download on a high-speed Internet connection) and listen immediately, or save to listen later.

Brooks reached out, with a brand new product, brand new web site, and drew the attention of a very popular blog Gizmodo—The Gadget Guide—in November 2005.  Hear how Gizmodo’s posting about TheBeerBelly got lots of media attention, CNN interviews and more and turbo charged sales, and still does.  

Brooks is not only is an entrepreneur with a passion for designing products, he also volunteers in the Bay Area helping special needs kids experience surfing.  He tells us how he combined his product design passion with helping out others.   Enjoy!

So, what is word of mouth marketing?   One way to think of WOM as good old basic, “referral programs” or “user groups”—on steroids.  Referral programs used to consist of asking business partners, customers, networking buddies, and friends to suggest people that might need your products or services.  Or you offered customers rewards for sending their friends to you for a “free quote”.

Or, if you were a big company (big budget) you brought your loyal customers together in Orlando or Los Angeles (notice the warm climate locales) for user group meetings—seminars, best practice-sharing—and of course, building loyalty to your company’s products/services. 

Fast-forward.  Today’s WOM is much more authentic.  Today it’s about people talking because they want to share their positive experiences with your products/services with their friends and colleagues.  Building successful WOM requires:

  • Giving your loyal fans (customers) something to talk about—great products, services
  • Making it easy for you loyal customers to tell others about your company
  • Identifying who are the “influentials” among your loyal customers and turning them into customer evangelists.  They are gold.  Evangelists are your unpaid sales force. 

Note:  For more about identifying and leveraging influentials to grow your business, see book by Ed Keller and Jon Berry, The Influentials, One American in ten tells the other nine how to vote, where to eat, and what to buy. 

We all love to recommend the best books, restaurants, vacation spots, etc. to our friends, family and coworkers.  Who do you know that relies on advertising (alone) to select vacations or mission-critical business tools? 

Another way to think of WOM marketing is as “relationship marketing”.  Relationship marketing is creating deeper relationships with your customers and developing products and services to meet their needs, based on your findings from the deep relationships. If you’re reading this blog, you’re probably a small business. And you most likely sell to small businesses and you’ll be interested to know that according to a Warrillow & Co research study on how small business owners (fewer than 100 employees) make buying decisions.

  • Small business owners bypass advertising and go directly to other small business owners for advice. 
  • Popular blogs and networking sites like Linkedin are increasingly how small biz owners find out about new products and services.

And with the explosion of traditional one-way, monologue marketing—ads, direct mail, email spam, Internet popups,  (we’re bombarded with up to 3,000 ads daily by many estimates) businesses need a more authentic way to (pardon this over-used cliché) ‘cut through the clutter’ and get their company story heard.  WOM will help you to get the message out.

Experienced, successful WOM proponents talk about the holy grail of WOM programs that work:

  • Getting loyal customers to talk to others about how much they like your products and services (Costco)
  • Creating remarkable products and services, so that happy customers want to talk about you
  • Finding your company’s story—and telling it over and over (Clif Bar)
  • For start-ups especially, turning your company identity (brand) over to your customers—let them define the brand (like the story of Jones Soda), start grassroots conversations about you, and then watch sales soar

Surprised to see Costco on the list?  Well, they spend zero on advertising.  But they have plenty of loyal customers who love to talk about shopping at Costco. Like Oprah Winfrey. Why Should Businesses Care About WOM? New research from GfK Roper Consulting reinforces why word of mouth marketing could be the key to turbo charging leads, sales and revenue for small (all) companies.  Here are the results of their recent study asking 1,000 Americans what are the most “trustworthy” sources for purchase ideas and information:

  • 81% cite people as a trusted source of information
  •  56% cite editorial content 

  •  advertising identified by 55%

  •  online identified by 24%

Business Technology Buyers

I actually disagree with the advertising result for B2B buyers.   I think the 55 percent citing advertising is too high, if you consider who businesses rely on for purchase ideas and information. (This study did not focus on business to business.)

  • The Chief Marketing Officers organization (CMO Council) in a 2005 survey of B2B buyers, Define What’s Valued Online, found that 75 percent of technology buyers begin the purchase process on the Internet—using white papers from industry associations and vendors.  
  • Fifty percent said they spend up to 5 hours a week researching tech products and services online.
  • Ninety percent of those surveyed said that online content has a moderate to major impact on which vendors they choose.  

So much for advertising impacting B2B decisions. These examples are all good places to start. We’ll explore how WOM actually happens in future posts.  If you have comments about how WOM is working for your company, I’d love to hear them.  Or, what else do you think you need to know before you get started?