market relations program

Market relations is a method of ensuring information about an emerging product or innovation is effectively communicated through word-of-mouth.

The Market Relations Process has These Advantages:

The source is seen as credible, particularly in comparison with advertising since the source is a person known to the recipient. Ads are known to be created by the advertiser. Today, even editorial endorsements have the “taint” of being created by public relations tactics and therefore have less credibility than word-of-mouth communication.

Communication that is person-to-person appears to have a more permanent effect than most other communications channels.

As a result, second only to the task of creating intangibles for new products is the challenge of finding the most effective way to generate positive and relevant word-of-mouth communications.

But because word-of-mouth communication is out of the “senders” control, the requirements for developing essential messages, positions and reasons for purchasing is substantially different than it is for, say, advertising.

Advertising is as direct as standing across a small creek from the prospect, and signaling via messages of the advertiser’s design, based on assumptions about the recipient’s needs. Advertising is direct, controlled and immediate.

Word-of-mouth, on the other hand, is like swimming 40 miles underwater in a decaying swamp, with the mandate that the swim must be completed by a large group of other people under no control of the starting swimmer, via strokes that cannot be prescribed, and on a time schedule that cannot be forecast. And to add more reality to the metaphor, none of the swimmers can see each other.

With an advertising campaign, the marketer determines message, positioning and purchase reasons only weeks or at most months in advance. If a particular advertisement or campaign does not work, it can be pulled and redesigned.

With word-of-mouth communication, however, the initial positioning and messages once started through the word-of-mouth channel (swamp?)-are completely outside the sender’s control. They are also outside easy measurement. Consequently, they must be designed at the outset to survive the trials of time decay and the communications quality deterioration through a series of people who invariably have motives other than the marketer.

It is for this reason that the initial positioning and message development effort in a technology company is so critical: the risk of failure is so high, coupled with the need for a “hardened” yet buoyant position and set of messages that will work continually.

Word-of-Mouth Content Matters

The content of word-of-mouth communication for technology products — once underway — can be enhanced and mildly diverted by the technology supplier. But because it is essentially an underground communications medium, the content of word-of-mouth cannot be substantially changed or improved, once launched. Hence the need to be correct at the start, to assure that the power of word-of-mouth will not turn negative and then increasingly build negative perceptions.

The risk of negative word-of-mouth is always present, particularly for companies where products may be incomplete at introduction. Negative word-of-mouth is substantially stronger, and works substantially faster than positive word-of-mouth. Using a word-of-mouth based strategy for a new product that does not meet expectations will provide rapid and permanent failure.

For all of its difficulties and risks, word-of-mouth has a powerfully vital attribute: it provides a method for reinforcement that is substantially better than any other medium. There is substantial research on the learning process that says, in essence, that the identical message is only effective the first three times it is received. After three exposures, the recipient becomes saturated with the particular message and interest declines rapidly. It is this finding behind the use of changing messages in advertising.

Word-of-mouth provides continually changing messages to maintain and even enhance learning. Word-of-mouth involves multiple sources (the people who talk about new products) with, by definition, multiple messages. People who are the sources of word-of-mouth customize the message to fit their circumstances and experience.

The value of this customization is that it avoids saturation by providing different messages about the same product, avoiding the saturation point of the same message, and stimulating and reinforcing continuing progress through the learning process. It is for this reason that word-of-mouth has such a powerful effect in quickly stimulating purchase behavior.

Product Launch

Product introductions that recognize this stimulating word-of-mouth effect focus on effective, customized communications to different segments of your market infrastructure primarily to assure that word-of-mouth reinforcement communications keep moving, keep evolving and keep on target. Such product introductions recognize the requirement for multiple messages to multiple segments, they understand and plan based on the infrastructure structure, for changing but consistent messages, and they appreciate the fact that word-of-mouth is outside the marketer’s control.

Measuring word-of-mouth (WOM) results is not really that hard. It only becomes difficult if you try to use quantitative methods to measure results. That’s because WOM is a “qualitative” technique. Putting numbers on word-of-mouth communication is like using an apple to check the color of an orange.

market relations - word-of-mouth communication

Measuring Success:

To [qualitatively] measure the results of word-of-mouth marketing, just ask and answer the following questions:

  1. Do prospective customers know: what makes your business different than all the others, and when you’re the best company for the job?
  2. Does the press accurately reflect your competitive positioning and lend 3rd party credibility to it?
  3. Do industry influencers understand your business strategy and support it to the press?
  4. Does the target market see you as a reference source expert/counselor in your industry?
  5. Do your business partners support your products and strategies?
  6. Do your resellers (or channel partners) know where to spend their time, who to call on, and what to say?
  7. Are key customers actively involved in testimonial marketing and serving as references?

Use this 7-point checklist to maximize the impact of  your word-of-mouth programs!

Written by: Warren Schirtzinger