Word of Mouth

Word of mouth

Stop me if you've heard this one:  Ed tech start-up company creates cool product and finds a couple of advocates that begin to spread the word.  Product is free and “sales” are accumulating as more people register to use the product.  Company is delighted and spends its (scarce) time and resources enhancing the base product to introduce a paid premium offering.   Company has a base of tens or even hundreds of thousands of seemingly happy users yet the souped-up product fails to generate any meaningful revenue.   What happened?

Word of Mouth.   Users generating more users.  It is the best thing that can happen to you.  Right?  In the recent Bill and Melinda Gates Foundation publication “Teachers Know Best: What Educators Want from Digital Tools,” (collegeready.gatesfoundation.org) 59% of teachers reported that they relied on recommendations from administrators and 47% said they rely on recommendations from other teachers when making digital learning decisions: one out of every of two educators are relying on word of mouth. Then why does it seem to stop just when the product is at a tipping point?

Because so many of today’ prototype and early release products are free, early success is often measured in numbers of register users and unique clicks instead of the old indicator, revenue.  To avoid the pitfalls this can lead to that hearken back to the “eyeballs” dot-com bubble ~15 years ago,  companies must consider a much broader definition of success before building out the product development plan.  They need to go past the numbers and focus on the words and the mouths.   Word of Mouth holds the critical key to product development.  In the early success of a product, understanding your user’s profile (did you hit a nerve with early adopters or the technophobe), her expectations (what had she heard & what problem did she think your product would solve), and her reality (what problem does it solve & what does she say about the product to others) should take the lead in informing product development.  This goes far beyond surveys and focus groups; this is experiencing your product as your customers do and drawing out insight to uncover the product’s real value.  This is the insight that leads to sustainable customer value and success.

Unfortunately and for completely explicable and logical reasons, many companies are ill-prepared to hear let alone listen to the word of mouth of their current and future customers.  Nurturing and developing a product from the first glimmer of an idea to its popular initial release creates a psychological and often deep emotional investment in the vision for that product and the way it should be used.  Recognizing the need to adapt the product, messaging, targeting, and even the core rationale for the product is difficult for “insiders” and even when attempted, the range of options evaluated is too often constrained by the weeks, months, and years of living with the product, model, and team behind it.  Those companies that are able to overcome these inherent challenges will be the ones that successfully heed the wealth of feedback their users are already sharing whether they realize it or not.

Is your organization truly listening to your customers?