Social media and digital marketing can be full of contradictions.
There is an inherent paradox in the digital world right now, especially with the onset of numerous social media and citizen centric channels.
There is something which I always suspected about offline versus online Word Of Mouth (WOM) marketing. And that is that nothing beats the real thing.
While reading my favourite blog about WOM, which is the Church of the Customer, I came across these interesting statistics through its links. They hail from the US, the world’s most wired nation:
“Around 3.5 billion word of mouth conversations take place in the U.S. on a daily basis, of which just 7% take place online via instant/test messaging, chat rooms, email and blogs. The remainder take place offline either face to face (75%) or on the telephone (17%).”
Courtesy of ChurchoftheCustomer.com
Got tipped off about this from Ian McKee at a recent lunch talk, and also found it on one of my favourite marketing blogs Church of the Customer. Apparently, a new study by Nielsen has revealed that Word Of Mouth (WOM) is yet again the number one motivating factor behind customer purchases. This isn’t surprising considering that most of us would much rather trust a friend or family member than an oh-so-slick and smooth advertisement.
What’s especially interesting is this chart below:
Used car salesman (courtesy of Chaka Raysor)
I am always puzzled why companies spend a lot more energy and focus on trying to sell rather than pleasing their customers. If you don’t already know, customer retention is a far more profitable strategy than customer acquisition. That, plus the fact that word of mouth is taking off more than ever in this ad-saturated age of increasingly powerful social networks. Here are some sobering statistics which tells you why you should pamper your existing customers rather than court new ones:
(Source: Customer Are Always)
Studies have also shown that a Customer’s Lifetime Value (CLV) can be far greater than that of a single transaction. In fact, 70% of a telco’s revenue comes from 30% of its customers: those who stay for years and purchase increasing levels of service. There is a nifty way to calculate CLV here.
Now shouldn’t you start paying more attention to those customers who made you who you are?
Just got back from a fabulous holiday in wintry Hokkaido. Will blog about it soon.
Meanwhile, another brilliant example of how service should be from Seth Godin. No questions asked and no serial number, receipt, warranty card or other forms of authentication needed. Just what we need here in “black and white” Singapore.
Laurie writes, “amazing customer service from le creuset, the french enamel on cast iron cookware people