So how does it work and what does it look like?

First thing a business owner should do is go to YellowPages.ca and do a search for their business listing. Once again - I am using my mom’s business, The Bra Lady as an example. Once you are on your business listing click on the ? beside the Add These Tools To your Website.

When you click on the ? mark - this will launch a new window with some Javascript code that you can copy.

Take the Javascript code and add it to your website. In the case of TheBraLady.ca - we decided to add this code into the header of the website so that it is available on every page.

Finally - when a user selects this new button on your website - it launched a window that gives a user a multitude of ways in which they can share your business information.

And that’s it. Now your business contact information can be shared via email, address book, desktop, social media, print and instant messenger.

Pretty cool eh.

In discussions with small business owners, when asked, what method of tracking do you use to measure your new sales, the most common response is “I ask my consumers where they heard about me”. Usually the second part of the conversation goes this way - “word of mouth is my best form of advertising” and “I tried many forms of advertising, none have worked for me”.

For this particular post I want to focus on two areas:

1) How word-of-mouth (WOM) needs support
2) How to leverage in-store questions and online traffic

Word-Of-Mouth

I am a very strong believer in WOM and the incredible growth it can generate. That being said, WOM often takes more credit away from supporting advertising vehicles, giving the impression to a SME that their advertising is not working.

A typical conversation with a new customer may go like this:

Bus Owner: Thanks for coming in. How did you happen to hear about our store?
Customer: A friend recommended you
Bus Owner: That’s great, if you liked the service today, please tell your friends

The above dialogue is good, however, what if the conversation was slightly changed:

Bus Owner: Thanks for coming in. Can I ask you two questions about how you come to our store today?
Customer: Sure
Bus Owner: How did you hear about out store?
Customer: From a friend
Bus Owner: Thanks, how did you get our address?
Customer: From your website? From my friend? From the Yellow Pages?
Bus Owner: That’s great, if you liked the service today, please tell your friends about us and have them visit my website, Yellow Pages ad, etc. for my store details.

Of course the exact questions can be changed and tailored, but the main point is that in most cases WOM is supported by another medium that connects the buyer and the seller. People will refer people they like to people they trust, however, those same people will usually not know all the details about your business. WOM can accelerate your sales when you have a support mechanism behind it and you incorporate it into your WOM strategy.

In-Store Questions and Online Traffic

Continuing with the example above and examining customers who indicated they used the Internet to find your address, we need to examine our web analytics. The first question I usually get is, should I ask customers how they found me on the web? I advise against asking any questions about how people found you on the web. The reason is that there is a lot of confusion among web users - so the typical response is Google - even if they used MSN, Yahoo or something else. This gives the illusion that all web traffic is generated from Google - which is not the case. As a business owner, if you have a good analytics package - all you need to know from your customers is whether they saw your website. Once you have a in-store count you can cross-reference this with your web analytics to find out what is and is not working online.

As a side-note I want to share a quick story. I helped a auto dealer in Calgary with their tracking and customer acquisition strategies. Calgary has two major newspaper dailies - the Calgary Herald and the Calgary Sun. We started by creating a baseline, by spending one month asking customers how they came to stop by the dealership. Of the two newspaper dailies what we found was that 25% came from paper 1 and 15% came from paper 2. Here is where it gets interesting - this particular dealership had not advertised in paper 2 for a couple of years, yet 15% of new customers said they found the dealership there. Here is my take on this non-scientific survey - when asked, some customers will simply answer what comes to their mind first as opposed to what is actual. Not because they are dishonest, just that they most likely don’t care and will answer to shut you up. The same thing is happening on the web - I bet I could take 10 people who use Yahoo Search as their primary engine and half of them, when asked quickly, would probably say Google. My point is that only relying on asking people how they found you on the web can be misleading, whereas this potential misleading information does not exist with web analytics.

Here are some stats from my mom’s business, The Bra Lady. What we have learned over the past 4-years of tracking results is that WOM is by far her #1 way of generating new business with the Internet as her primary support mechanism to WOM. What we have also found is that many people are referred to her business, but use search engines and directories to find her web address. Probably 80% of her new clients indicate that Internet played a role. NOTE: this may be high and in her particular situation makes a lot of sense - because she is a home based business. However, when I worked with Auto Dealers - this number was about the same and dentists were up there as well.

On a monthly basis we compare the number of referrals who indicate the Internet was a source of them finding her to her actual analytics - we use Google Analytics to understand better exactly how these people ending up finding her.

Here is the aggregate view:

In the above you will notice that the top three referrers of traffic are Google, YellowPages.ca, and Direct. Examining just the top three referrers, typically I would examine further both the traffic from YellowPages.ca and Google.

For Google:

What I notice is the majority of keywords from Google are good quality. You will notice that keyword #20 - the one that references ebay is not considered a good keyword, however, this is the nature of search engines. It is important when examining search engine traffic to look at the keywords to get a accurate picture. The conclusion is that Google is generating good traffic.

For YellowPages.ca:

What I notice is that the top referring URL from yellowpages.ca is the merchant page that was built for her business by YPG - this is good - it supports the decision to have the website URL located on this page. If I continue to examine further I see that users were searching using keywords we anticipated and specifically in Calgary. What I like about directory traffic is that people don’t surf directories. They go there for a purpose - usually to find something in particular - so the traffic generated here is high-quality.

For Direct:
This is pretty self-explanatory.

You will notice that we are also showing other top referrers in Facebook and CalgaryPlus.ca. I did a posting back in July of this year - Facebook - Can Local Business Florish in Social Networking? and its potential impact on local business - watch for this. For those of you interested - here is an article I posted back in 2005 on the strength of media companies and front-page placement - Power of Front Page Placement.

In conclusion - I would challenge any SME to dig a little deeper in 2008 in terms of their tracking and understanding of customers. Also I would encourage you to not presuppose answers as to where online traffic might come from. In Canada - we are continually bombarded with US news and information about the Internet, which sometimes gives us a US perspective on traffic as opposed to a CDN perspective on traffic. Build your measurement criteria, find the tools to track and examine them monthly - this will generate great results for your business in 2008.

Our friends at Zdnet have done a great job with there recent post - Google trumps Microsoft - here are some of the highlights for those of you that don’t have the time to read the full article.

99% of Google’s $122 billion market cap is derived from the sale of advertising - Adwords.

Question: If the Google CEO embraces advertising and the Google business model is wholly dependent on selling advertising, why then is Google so averse to spending money on advertising itself?

In Q3 Google generated $2.7 billion and spent $36 million on advertising (a mere 1.4% of its revenues)

Microsoft on the other hand spends a lot on R&D and Advertising - remember Windows 95 launch - expect a mega-million dollar ad spend with the launch of Vista as well.

Google’s utility and ease of use have made it one of the world’s best known brands almost entirely through word of mouth from satisfied users.

How does Google get away with it?

Google enjoys an unprecedented public good will and it manages that valuable asset keenly. Google is highly secretive and does not provide meaningful responses to press inquiries. Nevertheless, Google’s infrequent, but targeted, announcements routinely receive massive, and generally overwhelmingly positive, cost-free press coverage worldwide.

Google leverages its influence on the media to save hundreds of millions of dollars in product launch marketing expenses and to gain the interest of the world’s biggest free focus group, Google users.

Here are a couple of other related posts from Zdnet related to this subject:

Google vs. Yahoo: Google doesn’t support ad industry, Yahoo does - another good article discussing the differences between Google and Yahoo when it comes to spending money promoting their own sites.

Back in May of this year, Google announced in Click to Play Video Ads. Basically, you target your advertising - similar to that Google’s text ads and pay when somebody views your video. The ad agency types will argue that this is not branding, in the traditional sense, but then again, the Internet is changing many of the traditional ways business has been done.

What I like about Video ads is that if you truly want to distinguish your business from your competition - get a good video done for your business. If you are not sure where to start, visit my post on Spot Runner and have your TV ad built for you online.

SEO G did a great job of explaing the benefits of these types of ads in a recent post, Google Pay Per Video Ads (PPC Video) — Beginning of Larger Media Play? in summary they are:

1. Images Can Be Unobtrusive
2. Text Ad Blindness
3. A Picture is Worth 1000 Words (And A Video Is Worth A Million)
4. Geo-Targeting for Branding

So let’s recap the process here - a) Google launches Pay Per Video Ads (PPC Video) back in May, b) Google purchases YouTube.com in October and c) You kick your competitors in the teeth.

Think about it - you are a florist in downtown Calgary. You have a video ad - no chance would you waste your money promoting on your local television station, instead you take your video, purchase PPC Video ads on Google - and deliver your message to only people with a Calgary IP address on websites that talk about flowers, weddings, valentines, etc. This ad will eventually show up on YouTube.com where a potential customer is watching a wedding video, happens to be in Calgary and sees the opportunity to watch your video. If they are not in the market for flowers - no cost to you, if they are in the market, you pay to show your video, they pay to purchase flowers from you.

Sounds like another way that the small business owner can increase sales.

As a consultant to many local businesses, this trend is going to continue in the next of years. It use to be that advertising high ticket items in the newspapers was the most logical and critical step to moving products. However, local businesses will end of following their manufacturers lead and investing more money in online promotions.

To continue, the study interviewed 366 first-time buyers and where asked what is the most important source of information when making the decision to purchase a car for the first time.

 The results are as follows:

35% believe the Internet is the best source

25% believe their parents

13% believe their friends

8.2% percent for television

4.4% percent for magazines

3.6% percent for newspapers

1.1% percent for radio

The study concluded that young buyers aren’t turning to traditional media like television, magazines and newspapers for the information. Lonnie Miller, managing director of the Polk Center, said auto companies need to explore new marketing techniques, such as podcasts, in order to reach young buyers over the Internet and through cellphones.

“Generation Y is tuning out traditional advertising and watching what they want when they want,” Miller said in a statement. “Creating breakthrough content and developing relationships with customers through emerging media technologies will separate the winners from the losers in the next five years.”

The study also found that first-time buyers are independent decision-makers and rarely visit the dealers their parents last used. Sixty-five percent said they made their purchase with no influence from family or friends.  

Read the entire press release at the Polk website.

The last direct post I made regarding Word of Mouth advertising was related to Google Local Advertising. You can read that post here.

What I like about Andy’s article is it provide a really template of steps to increase the overall effectiveness of word-of-mouth advertising. As Internet tools bring more and more power and tracking to marketing efforts, he also focuses on tracking word-of-mouth advertising, which is critical to really attain significant growth. That being said, here is the article from Andy.

Word of Mouth Marketing in Five Easy Steps
by Andy Sernovitz
January 17, 2006
Word of mouth has been with us forever. But word of mouth marketing is a new marketing specialty that is as actionable, trackable, and plannable as any other form of marketing.

Word of mouth marketing (WOM) is an umbrella term for dozens of techniques that can be used to engage and energize customers. WOM includes viral marketing, blogs, communities, loyalty programs, and other techniques that get customers talking about your products.

In many cases, WOM isn’t actually “marketing” at all. It’s great customer service that earns customer respect. And it’s fantastic products that get customers talking about you.

Just as important, WOM is never about deception. Stealth marketing, shilling, or anything that hides the marketer’s involvement is strictly forbidden by the Word of Mouth Marketing Association (WOMMA) Code of Ethics. Honest word of mouth marketers live by earning the respect of their customers, and anything that breaks that trust will backfire.

With that said, there are five basic steps that all word of mouth marketing campaigns share—the Five Ts of word of mouth marketing: Talkers, Topics, Tools, Taking Part, and Tracking. Learn to identify these, and you’ll be able to implement WOM in all of your marketing programs.

The Five Steps
in Word of Mouth Marketing

1. Talkers: People who are more likely to relay your word of mouth message

Talkers are often referred to as “influentials,” but they can be any group of people who have the enthusiasm and connections to relay your message to target audience. They may be part of a formal evangelism program, or they can be bloggers who happen to cover your topic. Sometimes they are new customers bubbling with enthusiasm; sometimes they are rabid fans willing to spread your message.

The challenge: To learn to identify the right core group and give them a topic that they are willing to talk about.

2. Topics: Portable concepts for people to talk about, simple ideas that are word-of-mouth friendly

All word of mouth centers on creating the message that you want to spread. Good topics are portable: simple ideas that one person can relay to another. They can be sophisticated brand-building concepts, something as simple as a special discount coupon, or a tangential idea like “JetBlue has TVs.”

The specifics of the message don’t matter, but you need to give people something a clear, simple idea that can be relayed successfully.

The challenge: Find a topic that is interesting enough to motivate your talkers, and then give them tools to help facility that conversation.

3. Tools: Techniques and technology that make it easier for word of mouth conversations to take place

Word of mouth marketers make their biggest impact when they provide the infrastructure to help messages spread. The recent growth of word of mouth as a marketing technique is largely due to the growth of the tools that we have to support WOM conversations. A special friends-and-family discount may be worth talking about, but it has exponential marketing power when you pack it into an easy-to-forward email. A blog is a tool that enables a company to talk directly with fans, giving them a story to share. Online communities create a home and focus for otherwise disparate conversations. Formal evangelism programs provide the support and encouragement that keeps fans them talking.

The challenge: Keep that conversation going by taking part in it.

4. Taking part: Participating in the word of mouth conversation and engaging in a genuine two-way dialog

This is the hardest part for most marketers to work with. When you open the door to real people, and encourage them to start talking about your brand, they expect you to participate in that conversation. You need to respond to their messages, you need to accept comments on your blog, you need to participate in the discussion board, you need to answer the phone.

Once you open the door to word of mouth conversations with your talkers, there is no way to shut it again. You’ll get negative feedback, you’ll get crackpots, and you’ll need to assign staff to listen and learn from the conversation. At the same time, however, you’ll be earning the respect and recommendation of your customers and building powerful long-term relationships.

The challenge: Track the conversation and build it into your marketing plan.

5. Tracking: Measuring the online conversation

Amazing tools have been developed in the past year that enable us to understand how word of mouth conversations travel and how we can follow what consumers are saying about companies. The rapid growth of blogs and online communities have put much of the verbal consumer-to-consumer conversations in writing, and when it’s written down it’s much easier to measure. From there, we can take that online conversation and project it into the offline world.

This represents a major knowledge boom for marketers. It lets you understand what consumers really think about your brand, your marketing, and your products. It provides a level of genuine understanding that is more authentic that the data squeezed out of focus groups.

The challenge: Learn to value this raw consumer feedback and to use it to build better companies.

* * *

In the end, word of mouth marketing isn’t very complicated: Give real people interesting things to talk about, and make it easier for that conversation to take place.

Article originally published on MarketingProfs.com. You can view the original article here.

What are 2 sources used to provide data to Google Local Canada, they are Google’s own index of websites and YellowPages.ca.

Why is it so important for businesses to be listed on Google Local Canada. In my opinion if comes down to one primary reason that I believe consumers will find most valuable;

Google Local as a White Pages Directory

Everybody single person and business knows how important a white pages directory is. Now with Google Local Canada you have the ability to use Google as a regular white pages phone book. All you have to do is type in the company name that you are looking for and include the city within the search. Here are some examples,

Shaw GMC Calgary - Click to see Google’s results at the top of the page

Oasis Spa Calgary

What about for networking or word-of-mouth? Do people remember you by name? Listing your name and your company within YellowPages.ca, to get onto Google Local Canada can be a great way to increase your WOM and networking strategy. Check out Ron Weldon Calgary, a friend of mine and a great mortgage broker.

The moral of the story for businesses in Calgary, local marketing on the Internet cannot be ignored. If you are like me and subscribe to the thought that Word-Of-Mouth is the best form of advertising, then you better have a strong strategy to make sure people can find your phone number when they are looking for you, otherwise you are going to waste a lot of word-of-mouth resources.