Did you know there is a word-of-mouth marketing association? The association, known as WOMMA, has its own website (http://www.womma.org/wom101/), staff, board of directors, conferences, and initiatives.
In the words of WOMMA, “We're working together to grow the business from a natural phenomenon to a core part of the marketing mix. Our efforts will make your WOM marketing more successful, boost budgets, and raise the level of professionalism across the board.”
This site is full of great resources and can be useful for companies interested in learning about word-of-mouth marketing.
Now that being said, if you feel you are not doing enough word-of-mouth marketing, I will tell you a secret I have learned over the years.
If you want to ramp up your word-of-mouth marketing efforts, MAKE A BETTER PRODUCT, DELIVER A BETTER SERVICE, and PAY MORE ATTENTION TO YOUR CUSTOMERS.
If your product or service is worth talking about, it will be talked about. If it’s not worth talking about, it will not be talked about.
It can be a great idea to give your customers outlets to express their affection and appreciation for your product or service, and I certainly have some ideas for how your company can do that. However, it is not a great idea to get caught up in a lot of the nonsense surrounding word-of-mouth marketing campaigns.
In many instances, word-of-mouth campaigns do nothing more than get people talking about the word-of-mouth campaign. People may talk about how clever and “viral” the campaign is, but they are no closer to buying your product or service than they were before the campaign started.
Let’s not forget that the end goal of marketing, advertising, sales, and PR is to move the damn sales curve up.
Timeless Lesson: MAKE A BETTR PRODUCT, DELIVER A BETTER SERVICE, AND PAY MORE ATTENTION TO YOUR CUSTOMERS and people will beat a path to your door and will bring their best friends and family with them.
“In 1947, the total value added by the financial sector to US gross domestic product was 2.3 percent; by 2005 its contribution had risen to 7.7 percent of GDP. In other words, approximately $1 of every $13 paid to employees in the United States now goes to people working in finance.” – Niall Ferguson
Niall Ferguson, a professor of history and finance at Harvard University, has written a must-read book in his latest project, “The Ascent of Money.”
Harry Truman once said, “The only thing new in this world is the history you don’t know.” Truman’s comment was most likely directed at the history of war and politics. However, as today’s economic environment continues to unravel in front of our eyes, it’s more important than ever to apply Truman’s maxim to money and finance?
The subtitle of Ferguson’s book, “A Financial History of The World,” may scare off a reader or two. However, Ferguson’s book reads more like a historical novel than a financial textbook. Ferguson is a historian by trade, so don’t worry about getting bogged down with mathematical formulas or financial minutia. Ferguson details the history of finance as a storyteller would.
Ferguson leaves no stone unturned in his investigation of the history of money and finance. He divides the book into six sections: Dreams of Avarice (Money & Banking), Of Human Bondage (Bond Markets), Blowing Bubbles (Stock Markets), The Return of Risk (Insurance & Hedging), Safe as Houses (Real Estate), and From Empire to Chimerica (Global Finance). Each section builds on the next, weaving an amazingly entertaining story of how money and finance have shaped the events of history.
If you think Bernie Maddoff has been destructive to our current stock market, wait until you read about the catastrophic impact an ambitious and unruly Scot by the name of John Law had on France’s economy and stock market in the early 18th century. Ferguson even shows how Law’s actions indirectly plunged France into the French Revolution.
Ferguson also tells such stories as how two Church of Scotland ministers created the first modern insurance fund in 1744 for Ministers’ widows, paving the way to today’s welfare state; how five Jewish brothers, the Rothschild boys, were able to corner the bond market in the early 19th century and become one of the wealthiest and most powerful families in the world; how the Medici family in Renaissance Italy revolutionized banking and came to dominate the political and financial landscape of the day (two Medicis even became Pope); how an illiterate Texas developer named Danny Faulkner made himself a multi-millionaire and helped create the S&L crisis of the 1980’s; how George Soros made a $10 billion hedge bet against the British pound and made himself both rich and famous; and how the relationship of “Chimerica” (China + America) will shape our financial future.
While you won’t finish Ferguson’s book with an MSF’s understanding of the mechanics of CDOs, CMBS’s, or Hedge Funds, you will have a valuable knowledge of the progressions and regressions of the financial markets through history and the impact these progressions and regressions have had and will have on our personal, professional, and political lives.
Finance is both the international language of business and the engine driving companies to success and failure. Financial ignorance does not lead to financial bliss, and Ferguson’s book proves this fact.
This book will not make you a financial expert, but it will make you wary of financial “experts”. This book will not make you rich, but it will help you understand wealth and poverty. This book will not help you accurately predict the financial future, but it will help you understand the financial past and present.
Ferguson says it best in the end of the book: “…until we fully understand the origin of financial species, we shall never understand the fundamental truth about money; that, far from being ‘a monster that must be put back in its place’, as the German president recently complained, financial markets are like the mirror of mankind, revealing every hour of every working day the way we value ourselves and the resources of the world around us.”
It’s about time we all stare into our financial mirror and determine if we really like what we see.
1) “Don’t lend money to people who cannot pay you back” – Warren Buffett
2) “If you do not understand something, do not invest.” – Warren Buffett
Imagine the pain, frustration, and financial losses we could have avoided if our financial institutions simply abided by the two rules stated above.
In her latest book, Dear Mr. Buffett, Janet Tavakoli, an expert on structured financial products and a consultant to hedge funds, institutional investors, and financial institutions, takes readers on a wild ride through the financial crisis that has crippled our economy.
Ms. Tavakoli uses her friendship with the legendary investor Warren Buffett to tell the story of how and why we got ourselves into the mess we are in. Tavakoli and Buffett first met in 2005 when Tavakoli flew 1,200 miles for a lunch meeting with the “Oracle of Omaha.” They have developed a genuine friendship since this first lunch meeting, and Tavakoli’s book is full of correspondence with Buffett over the last four years regarding the state of the financial system. Readers will be unsurprised to learn that neither Buffett nor Tavakoli were surprised when our financial system imploded.
At its core, this is a finance book for financially inclined people. At times, unless you are one of those financially inclined people, the acronyms and financial jargon will frustrate you. You will feel confused. You will feel lost. However, before you are through with this book, you will understand that confusion is exactly why Tavakoli wrote this book.
This book is really a book on the power of clear and simple thinking. Currently, our financial system is dominated by MBAs, PhDs, and other kinds of financial “scientists” armed with sophisticated statistical models promising to erase risk and maximize reward. These models have allowed the financial community to create amazingly complicated financial instruments, such as CMBSs, RMBSs, CDOs, ABCPs, and Credit Swaps, which even the smartest and most sophisticated “modelers” (Tavakoli’s term for investors, bankers, and financial advisors who use models as their primary rationale for their investment decisions) cannot understand. As Tavakoli points out, “A model will calculate the wrong answer to nine decimal places, but it cannot tell you it is the wrong answer.” She also notes that “Modelers manipulate a large body of data, without knowing how to interpret the results.”
As a counterpoint to this sophisticated confusion, Tavakoli offers Warren Buffett, the old, experienced sage who scoffs at the mistakes of the young and reckless men and women who run Wall Street and corporate
Tavakoli, with the help of Buffett, has even developed her own “MY THEORY OF EVERYTHING IN FINANCE” to keep her focused on the fundamental principles of investing and evaluating financial instruments and businesses. Her theory is:
The value of any financial transaction is based on the timing of cash flows, the frequency of the cash flows, the magnitude of cash flows, and the probability of receipt of those cash flows.”
There have been countless books written about Warren Buffett and his investing principles. In many respects, this book is no different than those that have come before it. But in one unique, fascinating way this book stands out from the crowd. Tavakoli paints a tale of almost mythical proportions of Buffett vs. Wall Street, and, as a reader, you can’t help but pick a side. In fact, Buffett recently made a $1 million bet with Protégé Partners, a hedge fund management group based out of New York, that a collection of five hedge funds selected by Protégé could not outperform (taking fees into account) the S&P 500 over the next ten years. The winner will donate the $1 million to a pre-selected charity. After reading this book, I think you will have a pretty good idea of who will win this one.
At its heart, this book is really about the consequences we have all faced of ignoring the simple and straightforward rules Buffett has used his entire life to enrich himself and those smart enough to follow his lead.
In 1929, a Viennese immigrant by the name of Ralph Hitz took over one of the most disappointing hotels in all of New York.
This hotel was called The New Yorker. The 2,500 room hotel, which was financed by a $13,000,000 mortgage, had opened its doors to the public just ten weeks after the stock market crash of 1929. The hotel was a $13,000,000 flop.
When Mr. Hitz agreed to take over the management of the hotel, his friends and family thought he had lost his mind. From their perspective, there was no way The New Yorker could be a success. However, Ralph Hitz knew something that his friends and family did not. He knew one of the key secrets of marketing and customer service.
Ralph Hitz was able to take this floundering albatross and transform it from the biggest disappointment in all of New York to one of the largest and most profitable hotels in the entire world.
How did he do this?
CONTACT!!
In the words of Mr. Hitz: “We contacted the hell out of them.”
No matter which way a guest turned, someone was talking to them, greeting them, smiling at them, or asking them about their day, trip to the city, favorite sports team, hometown, or family. It wasn’t long before people started telling all of their friends about the friendly, helpful staff at The New Yorker.
Throughout his career, Ralph Hitz proved time and again to be a marketing genius. His genius did not come from fancy ideas or statistical analysis. His genius came from his knowledge of the psychology of his customers.
As persuasion expert Blair Warren has noted:
“People will do anything for those who encourage their dreams, justify their failures, allay their fears, confirm their suspicions, and help them throw rocks at their enemies.”
Mr. Hitz understood that his customers wanted to feel special, and he went out of his way to make them feel that way each and every time they stepped foot in his hotel. If you can make your customers feel special, they will not only gladly pay your for your services but will also tell their friends and family to pay you for your services.
Timeless Lesson: Contact the hell out of them!
