Question: What is the most powerful advertising medium in the world?
- The TV.
- The Internet.
- Or word-of-mouth advertising.
According to the market research firm Nielsen, the most powerful form of advertising in the world is word-of-mouth. Specifically, 70% of people say they decide which product to buy based on recommendations from their friends and family.
Now, let me ask you another question. Where do we currently spend time with our friends and family? In parks, in cafes, or on social networks like Facebook and Instagram?
Indeed, in the big cities of the world, more and more people are meeting and interacting with their friends and family on social networks. For example Mexico City It is the fourth city with the most Facebook users in the world, with 15 million users. Only Bangkok with 25, Jakarta with 20, and Dhaka with 17 million have more.
And finally, one last question. If word-of-mouth advertising is the most powerful, and if there are 15 million Mexican men and women talking about our products and services on Facebook right now, why isn’t there an avalanche of business men and women looking to be part of that conversation?
I believe that although many entrepreneurs have already seen the value of e-commerce, and are increasingly investing in search engines, they are still sitting on the sidelines watching what happens in the social media arena.
That's why today I want to talk about the urgency of jumping into the fray and accepting the possibility of getting knocked down. Because I am convinced that the future of brands will depend more and more on their ability to build meaningful relationships with their customers and prospects, rather than on their ability to find them to put an advertisement in front of them.
And I understand that many businessmen and women are afraid to open up dialogue. They think, just imagine if they start attacking me, it'll be the end of the world. What they don't realize is that people are already talking about them, and if they aren't around to respond, then it truly *will* be the end of the world.
Let me give you a taste of reality. This morning Pedro sends Maria a tweet with a link to a comment he posted on his blog complaining about the terrible service he received at an establishment that is currently all the rage. Maria reads it and it catches her attention, and she retweets Pedro's message with a comment of her own to her Twitter followers and her friends on Facebook.
Twenty-five of them engage, comment, and Maria enjoys a lively discussion. And what's more, eighteen of them in turn retweet it with their comments to their friends and followers.
Let's calculate how many people this impacted. Facebook reports that the average user has 150 “friends,” and Twitter reports that the average Twitter user has 707 followers. Now, if we add up the Facebook friends and Twitter followers of the eighteen people who retweeted the link to Pedro's complaint, we're talking about 15,416 people who now have the name of the infamous establishment in front of their eyes; and possibly the name of that establishment, my dear friend, is yours. And here I'm not even considering all the people who received María's message and didn't reply but possibly spread it on their own. Do you see the scope of word-of-mouth advertising on social media? The immense damage a single unsatisfied customer can do, which we ignore out of fear or apathy.
Now let's look at the other side of the coin. Let's say you're there. And you're part of the conversation because you really care about your customers, you convey your sincerity and closeness to them, and you do everything in your power to repair the damage.
Then you'll start building relationships that are and will increasingly be the company's true asset in a connected world. Something that the competition cannot take away from you simply by spending more money. We are talking about a new paradigm that forever changes the dynamics of what it entails to build a successful business.
According to a study conducted by IBM in the digital age, the utility and sustainability of a business lies in building relationships that result in brand advocates:
- These customers spend 30% more than other customers.
- They stay on the site longer.
- And they tend to have a much higher lifetime value than others.
As we all know, customers complain more readily than they praise. However, when given the opportunity, the vast majority of them are willing to praise the company publicly. And social media is the ideal space to remind them why they love the brand and give them the opportunity to express it.
It's also important to keep in mind that online reviews are one of the most powerful promotional tools available because they frequently appear very close to the “purchase moment.”.
We are faced with an unprecedented opportunity to take our businesses to the next level. But we have to jump in. We have to understand that getting knocked around is part of the model's consistency and that it will help us grow and become great business people who back the business with our hearts and not just our wallets.