How To Generate Word Of Mouth Endorsements – A Case Study
Written By: Doug Pruden Principal Customer Experience Partners, LLC – and Senior Living SMART Partner
What Costco Might Teach us About Generating Word of Mouth
Confirmed Costco shoppers appear to enjoy their shopping experiences at the big-box retailer. Despite the less than luxurious facilities, larger than desirable multi-packs, membership fee, and frustratingly long checkout lines, Costco rises to the top in just about every national customer satisfaction ranking. At first glance, it may seem strange that Costco ranks right up there with the likes of Nordstrom and Trader Joes, but when all of the components of the total customer experience are considered, it makes sense.
Word of Mouth Just Happens, Right?
But the apparent contradictions don’t stop with Customer Satisfaction. Costco also enjoys strong, positive word of mouth! Actual, in-market dialogue about a company often doesn’t track well with these more traditional measures. So, it’s worth taking a look at how Costco manages to turn purchases of 6-month supplies of olive oil or ‘convenient’ twenty-four packs of D-batteries into a shopping experience that customers actually talk about.
Of course numerous possible explanations come to mind. It could be that shoppers like to brag about how much money they save, such as the convenience of ‘one-stop shopping’, etc. However, according to Robin Ross, Senior Director of Corporate Marketing, Costco’s ability to generate word of mouth also has to do with offering unexpected surprises and instilling the sense of a ‘treasure hunt’ into every shopping visit. Costco understands that providing good bargains and a satisfactory shopping experience may keep customers coming back, but these more mundane issues are not likely to stimulate conversations with friends, neighbors, relatives, and co-workers. And, it’s this positive word of mouth that communicates and perpetuates the memorable customer experience which, in turn, helps keep customers returning and attracts new customers as well.
Advertising Isn’t Involved!
Stimulating and maintaining dialogues about itself with little or no advertising demanded what Ross describes as a “better idea”. Costco elected a unique strategy. They added “conversation products” into their product mix; a $3,000 toilet, a $2+ million dollar ring, and computer-measured, custom-tailored men’s suits. These items are both unconventional and unexpected offerings in a discounter-setting and in truth Costco doesn’t expect to sell many of these items. But along with other, more affordable ‘treasures’, they provide customers stories to tell. This unusual merchandise provides customers a reason to talk about their trips to Costco. Embedded in the resulting word of mouth may be mentions of other, more traditional purchases; the wild salmon they bought or the rewarding savings they received at the in-store pharmacy. The next time a friend mentions Costco pay attention; you may be a recipient of just such a report.
Strategies for increasing the volume and positive tonality of word of mouth aren’t unique to Costco. Senior living facilities that understand how to provide: 1) Motivation, 2) Content: stories to tell, and 3) Opportunity: chances to relate their content, will enjoy increased word of mouth as well. To hear more about managing and monitoring word of mouth for your brand join us for a Senior Living Smart webinar on October 14!
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