Word Of Mouth As A Marketing Pillar

Ever wonder where the marketing experts go for advice? In their first of a series of articles throughout 2009, the folks at CMG Marketing in Toronto provide a perspective for independent repair shops that claims that the expertise in a particular type of marketing could actually come from the independent repair and services sector. CMG has been providing marketing services to the automotive aftermarket for 20 years and their unique approach to marketing fully recognizes the current paradigm of the aftermarket embodied by various supply organizations, local marketing requirements, banner programs, and the need to recognize this highly skilled, yet unsung segment of the economy. John Nelligan, their Senior Vice President, provides the first installment with an article on Word of Mouth Marketing in an environment where marketing budgets are often small to none.

Several months ago I attended a conference on “word of mouth” marketing or WoM for short. The conference was full of advertising and marketing execs extolling the benefits of “social marketing” methods. It struck me as an odd conference since at the most basic level, WoM is the antithesis of marketing. It’s a method that you trust to happen on its own to generate new customers for your business. Marketing, on the other hand, is a whole set of programs and actions that you directly activate, usually because WoM isn’t happening the way you would want it to.

And with the speed of communication today through emails, blogs and electronic social media, WoM can seriously hinder the success of a business if a story about a bad customer experience multiplies through a community. No wonder marketers have shown such an interest in WoM; new media (that is out of their control) can completely overturn the positive efforts of their marketing campaigns.

To be honest, much of the conference was like listening to a bunch of wireless carriers pushing smoke signals as the next best technology.

Who knows it best?

As I sat through the day-long conference, I found myself wondering why there were no small independent businesses participating and learning at the conference -small independent businesses from, say, the independent automotive aftermarket. After all, isn’t this industry one that still depends on the tried and true method of WoM and repeat business? In fact, the real leaders at this conference could have been any one of the independent garages in Canada.

What makes people talk?

Despite the many success stories at the conference it was obvious that marketers have a subconscious distrust of WoM marketing. Something else is needed for WoM to work -and that ‘something else’ is a whole set of marketing initiatives. For large companies it can take the form of quirky online videos, blogs or catchy street advertising. The goal of these initiatives? Create positive chatter about a product or service -and do that by being open, pragmatic and engaging.

What they didn’t address was the lion’s share of small businesses, who don’t have mega-marketing budgets. Because of this, the independent aftermarket knows that WoM isn’t always better; it’s just sometimes all there is. Nevertheless, all the examples used at the conference did have success in creating chatter. The challenge for the independent aftermarket is to create that positive chatter among neighbours and locals without depending on blogs, expensive video clips or other internet campaigns.

It probably comes as no surprise to the reader that marketing is one of the underfunded expense items in the aftermarket. In fact, Statistics Canada’s recent Repair and Maintenance Services survey showed that only one per cent of total expenditures were directed toward Marketing programs.

Actual marketing spent may be larger than reported since it is also the result of efforts by suppliers rather than shops, although they are just not always focused enough to benefit the individual businesses. Suppliers will often support their customer base through banner programs and other initiatives, but for the individual owner there is no “critical mass” to engage in marketing that can compete with the enormous spend of the OE dealer networks. And despite the fact that marketing budgets are small, it also doesn’t make sense to increase them at the trade level since the increase required to make a difference is simply too much.

So the challenge is there. If marketing budgets are small out of necessity, what are the options? In the current environment, WoM can be the cornerstone of business development and hence a marketing strategy.

Service Garages can win at this game

One of the greatest reasons that ISCs can depend on WoM is that they consistently demonstrate dominance in the customer satisfaction game. The 2008 JD Power study placed Independent Repair Facilities above all other dealer chains and all but two national chains. And high customer satisfaction is a necessary requirement for WoM tactics to work. Second, it is better that someone else tell a prospective customer how satisfied they were with a business than the business owner telling them directly. Why? Shop owners have a vested interest in portraying themselves in a positive light. A customer, on the other hand, usually doesn’t. So there is no inherent mistrust of a third party blowing your horn.

So what are they saying about me?

Well that is the risk, isn’t it? If we depend on what others will say about us, then we are at the mercy of their experience and how emphatically they convey it to others. By depending largely on WoM, repair shops can only directly influence those who come in direct contact with their business and service practices.

Sure we can depend on banner programs and association memberships, but the most effective method of building positive awareness is to treat every customer fairly, honestly and pragmatically.

It doesn’t hurt to proactively market at the same time

Does this mean that shops should focus less on marketing and more on WoM? It’s actually not so simple that it should be looked at as a trade-off between the two. The reality is that there are many marketing factors that affect the success of building a small business through WoM. Some of the marketing effort is dependent on others, some on the individual shop owner. All are intended to create excitement and positive chatter among existing customers and permission to believe among prospective customers.

What can shop owners do?

For the shop owner, the challenge then is to replicate the imperatives required to make WoM a successful business development strategy. What is it then that repair facilities can do to convey openness, honesty and stay interesting enough to create positive chatter?

1 Presentation – More than polishing the front door, this should convey commitment to the business. An inherent advantage that national and regional chains have over an independent is the consistency of the look and the standard that they often place on shop presentation and cleanliness. This creates consistency that builds confidence among clientele. While independents may not have that consistent look and feel across multi-locations, the level of cleanliness can be used to convey pride of ownership, and to win the confidence among consumers. And leaning on a banner or loyalty partner to help standardize the look or provide point of sale material always helps in this regard. See “What can others do?”

2 Technical Credibility – Partner with credible training programs and accreditation organizations. Many suppliers and organizations offer quality training for your technicians and managers. But building confidence among your clientele means communicating how you have taken advantage of these programs to build a technical
expertise that is equal to, or better than the OE dealers. Remember that training has many marketing benefits in addition to the core safety and quality benefit of the training itself. If no one knows about the technical credibility of your staff, you are missing a key confidence builder among potential clientele.

3 Customer Experience and Recognition for repeat business – Convey appreciation to customers for their business; fail here and customers won’t spread the word. Building a friendly environment and a sense of appreciation among your customers takes time and effort. But this doesn’t mean that the onus rests on you and your shop team alone. Many customer retention programs and services are available that will help you build a regular communication stream with your customers through postcards, emails, even direct phone calls. With minimal investment you can raise the customer confidence of your clientele by simply contacting them. This reminds them that you value them as customers and creates an opportunity to build repeat business. Despite a media backlash against telemarketing, most customers appreciate short reminder calls especially from local businesses that they’ve done business with in the recent past.

What can others do?

Each of these factors is an outward representation of who the shop really is; of how open, pragmatic and engaging it is. And where it may not be obvious (like in technical credibility) marketing budgets have to communicate it through signage and other methods. But we’ve already acknowledged that it’s pointless to push marketing budgets too far. This is where others come in. Most shops have at least half a dozen significant suppliers to their business – from parts, to tools, software and training. These suppliers have marketing budgets to help these shops in any of the above categories.

And these supplier affiliations should be leveraged to convey competence, brand strength and stability through association. Suppliers can help by providing the materials needed to address many of the imperatives. The pay back to the supplier is allegiance; the pay back to the shop is credibility, stability, and strength of the brand association.

Associations can play a key role in conveying who the independent sector is to the general public. Think of association memberships as the independents’ version of the OE dealer network. With their clout they can broadcast the credibility message that OE dealer associations try so hard to diminish. Getting involved and providing input to associations reminds them that issues like Right to Repair, or other marketing initiatives can fall flat if the general public doesn’t really understand the choices they have in the automotive aftermarket. This means encouraging them to get a massive message out about the independent sector.

So whether it’s the AIA, NATA or your regional affiliate organization or even your local chamber of commerce, make your voice heard and let them know whether their efforts are actually helping you build your business. If not, get involved and find ways to voice the need to build awareness and confidence so that positive chatter among your existing customers van take hold with prospective customers.

So WoM may work fine on its own, but there are many other elements that can either help or hinder the effectiveness of “chatter” to build a business – that can make it positive or negative. That means continuing to focus on image, technician training and relationships, and leaning on associations and supplier programs to do more for the marketing image of repair facilities.

Many companies today engage in short surveys during the transaction process. One of the most common questions in these surveys is “Where did you hear about us?” Typical responses are “Print Ad,” “Flyer,” “Post card in the mail,” “Internet” or “A Friend.” At its most basic level, “a Friend” means Word of Mouth. In its extended, non-traditional form, blogs, chat and internet may be the newer extensions of WoM. Despite the fact that these communication channels are used less in the aftermarket doesn’t diminish the fact that most business is generated by one person telling another. In the aftermarket, the experience is a minimum requirement, but the entire marketing and image program must be there for it to work. SSGM

John Nelligan is Senior Vice president at CMG Marketing in Toronto. CMG specializes in full service marketing solutions, call centre support and marketing analytical and data services to key clients in the automotive aftermarket. John holds an MA in Economics from the University of Toronto and has been providing information strategies to organizations for 25 years.