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How Does This Business Thrive Exclusively on Word-of-Mouth Marketing?

They say bad publicity is better than no publicity.

What if no publicity was better than any publicity?

The Safe House, a spy-themed restaurant in downtown Milwaukee, Wisconsin, seems to think so. Although this establishment has been in business in downtown Milwaukee since 1966 and has made restaurant must lists for years, there are plenty of people who pass right by it without even knowing it’s there.

The reason?

Well, this is what it looks like from the main street.

No, the window under the striped awning does not open to dispense hot dogs.

It kind of looks like the set for an embassy on a Canadian sitcom.

And this is the plaque outside the door.

I love their french fries. They taste really... exporty.

This does not make my mouth water.

There is absolutely nothing outside the Safe House that would indicate it’s a restaurant, let alone this wildly popular nightspot. Although the internet has helped in recent years, the primary driving force behind the Safe House has been word-of-mouth.

Also, the Safe House does have a website, so it’s not like a Freemasons meeting or an Illinois Senate seat where you have to have someone on the inside. However, its physical location – a HUGE component of restaurant marketing and success – is virtually invisible to potential new customers.

Also, as of this writing, a Google search for “Milwaukee restaurant” or “downtown Milwaukee Restaurant” puts The Safe House in the second “Places” slot but its home site is nowhere on the first few pages of results. So why is the Safe House constantly packed?

Why should word-of-mouth marketing matter to me?

The market is enormous, you object mightily, your framed MBA shaking on the wall beside you.What is one person’s opinion of my place going to do to help?

Working from the definition that “publicity” is an intentional plan to shape public perception, it appears that The Safe House is doing just fine letting the public form its own perception.

Shhh... my mom doesn't know about the piercing.

The shell is a transmitter.

Of course, the secrecy of the Safe House is certainly an exception to the rule of publicity. For one, the secrecy of the place is a tie-in to the gimmick surrounding the restaurant theme itself: a password is even required for entry (and the failure to supply the password requires a public and embarrassing display of talent somewhere between hula-hooping and singing the Brady Bunch theme song).

After you’ve been personally humiliated by not having the password, you can’t wait to crush the self-esteem of all your friends.

Voila! Word of mouth.

Invest in regular marketing methods (Bubba is always up for the job!), but make sure you’re not overlooking the importance of paying attention to what your clients are saying about you.

How important is word-of-mouth marketing?

Well, to start, there’s an entire marketing organization dedicated to it. WOMMA (Word of Mouth Marketing Association) was founded in 2004 and offers a variety of services.

Since they’ve been around for only a few years, it’s no surprise that they’re only representing little companies like Honda and Coca-Cola.

Wait… what?

Yep, in a few short years, WOMMA has convinced huge corporations to care about what you and I say to our friends. So whether I’m fondly recalling my mom’s light blue Honda Accord or screeching over the fact that Cherry Coke needs to be available in all restaurants, bars, and places where I’m thirsty, WOMMA is interested in the how, where, and why of what I spread information, and gigantic companies are willing to fork over cash to figure out how to use that information.

Okay, so a company tracks that kind of information, but isn’t it a tiny sidenote compares to traditional marketing campaigns?

Pssst, I think you're wearing more makeup than I am.

Word of mouth is important. Smell of mouth is right up there, too.

How powerful is word-of-mouth marketing?

According to a recent study on word of mouth metrics in the cell phone industry, each promoter (happy customer who gushes over your services and produces) was worth about $1,700 and accounted for half of every new customer. However, every detractor (unhappy customer who bitches about your company) engaged in behavior that not only negated their own $1,700 contribution to your company but also COSTS your company $300 dollars by accounting for the loss of 1.3 new customers.

In addition, keeping your customers happy – or at least keeping them on as a client who isn’t spreading negative references about your company – is crucial.

According to the study:

Wireless providers must spend about $300, on average, to acquire a new customer. That figure stands in stark contrast to the $25 it costs, on average, to retain a customer.

Enough said.

How do you use word-of-mouth marketing?

Do you ask your customers to share your business information with their friends and family? Do you have opportunities for them to link to you on social media? What kind of discounts or special offers do you have for family and friends of existing customers? Any perks for customers who recommend someone to you? Sound off in the comments below!

Until next time, keep expanding your brand!

Jana



Jana Quinn

An old ‘G’ that’s been working for QLP since it was in Bret’s basement – Jana has been writing since she made up a story about a Jana-Tiger that liked rocky road ice cream and got straight A’s. She enjoys writing about marketing and pop culture, posting a ‘Die Hard’ article as often as she’s allowed. She is inspired by the articles at Cracked and frequently wears a Snuggie in the office. You can also connect with Jana on Google+.

Comments

  1. cyberneticSAM

    That restaurant is really neat, I am going to make a mental note to stop there eventually. They really knew what they were doing with marketing (er… should I say lack thereof) with such a bold and risky move. This is the kind of establishment you know is worth going to, if they have been around for a while and their intention is to be secretive with what people know about them. Very cool!

    • Jana Quinn

      ROAD TRIP!

      Seriously… let’s do a QLP road trip. It’s such an awesome place.

  2. JPorretto

    This is fascinating stuff! Now…. how did YOU find out about this place? Hmmmm?

    • Jana Quinn

      Email blast.

      Just kidding. ;)

      WORD OF MOUTH.

      My brother and his girlfriend go there sometimes, and he recommended it to me. I’ve since brought a handful of other people into the fold. It’s kind of fun to be considered part of something “exclusive.”

      • Amanda

        This restaurant really sounds awesome! Their concept and menu both sounds so appealing! The way my family loves going to these kind of places makes me wonder why I’ve never heard about it before, but I guess it’s because it’s too top secret. ;-)

        I think restaurants like these are the ones that are the best. There is no ad out there that can beat a word of mouth recommendation in my opinion. These hidden gems are some of my favorite places to visit!

  3. Joseph Giorgi

    I had no idea there was an organization (and a large one at that) devoted to word-of-mouth advertising. That’s really cool! Part of me is surprised to hear that an organization like WOMMA exists as a non-profit entity. It sort of makes sense though. After all, it’s the most effective form of marketing, and one that any business should be looking into!

    WOMMA seems to be a pretty big deal. How exactly does it work though? I read the “About WOMMA” page on their site, but it’s not very clear. They say that their goal is to help advocate credible word-of-mouth advertising, but how do they go about it? Do they obtain information from average consumers and shop that information out? Just curious.

    Awesome post, Jana! :)

    I’m sure cyberneticSAM and I will be checking out that restaurant at some point as well. Seems like a really unique place!

    • Jana Quinn

      I agree that WOMMA’s description is pretty vague. I don’t know if their approach is so tailored to each company that it’s hard to sum up specific actions or their copywriters suck and default to wishy-washy corporate speak. ;)

      Maybe I’ll try contacting WOMMA and see if I can get an interview. That would definitely be an interesting post. Thanks for the inspiration.

      P.S. ROAD TRIP. Seriously. Road trip.

  4. Ali Goodman

    this is so true (now I have to try the restaurant). People like to feel they’re in on the “secret”. :)

    • Jana Quinn

      You’re right! But it can be a double-edged sword. You don’t want to be so exclusive that you alienate people, but you don’t want to be so inclusive that people don’t feel special. I think the Safe House balances this well.

      Thanks for the comment!

  5. Pat McCarthy

    Hi Jana,

    Pat from WOMMA here. I’m really glad you found us and like our goal.

    Sorry our mission isn’t so clear. Our members range from Honda to small agency start-ups, so it’s hard to explain everything we do in a quick and digestible form.

    That said…challenge accepted.

    WOMMA helps companies become talkable by providing:

    Education – Webinars, five blogs, online courses, offline conferences and best practice guidebooks

    Ethics – Industry and legislative guidance

    Growth – Opportunities for word of mouth-ers to present their work and ideas to novices and old pros alike

    That’s the super compressed version. I hope this helps!

    Pat McCarthy
    Social Media Coordinator
    WOMMA

    • Jana Quinn

      Hi, Pat!

      Wow, thank you so much for checking out the article. I really appreciate you also taking the time to write a thoughtful response.

      So it looks like I was heading in the right direction when I said your variety of services are so diverse that summing it up was difficult.

      I’d love to be able to talk to you about this further. Would you be interested in an interview?

      I think promotional products and word-of-mouth advertising have a lot in common; they value relationships and one-on-one customer interactions ABOVE spreading a wide, impersonal net.

      I would love to hear from you about this. Thanks for stopping by, and hope to see you again soon!

      Thanks,
      Jana

  6. Bert's Mom

    You need to have that road trip once Bert is back! He should be back tonight or tomorrow. Great article Jana. You are doing what has always been my dream!

    • Jana Quinn

      Thanks, Mrs. K. ;)

      I actually took Bert, Christine, and Will up to this place when we went to the Milwaukee Iron/Chicago Rush game last summer! While we were in the car, Bert almost spoiled the surprise by saying that next time, he wanted to try this “spy-themed” restaurant he’d heard about.

      Luckily, he hadn’t figured it out until we got there. And none of them knew the password. ;)

      Thanks, Mrs. K! I’ve really loved working for QLP for these past five years. I hope you get a chance to get out there yourself! :)

  7. Amanda

    I am really impressed by this post and this restaurant Jana! Well done. =)

    I had to read it twice to fully get the concept of the restaurant–and it sounds awesome! It reminds me of two of my posts, one about The Billy Goat Tavern, and how the great atmosphere and whole experience of a business, especially with a restaurant, brings customers time and time again. And the second about my experience with DirecTV and Dish Network, how one lost and the other gained our business (which turns out cost the one big money!–because I certainly don’t speak highly of them now).

    I would love to check this place out sometime. QLP Road Trip time for sure!

    • Jana Quinn

      Thanks, Amanda!

      I can definitely see where you can find parallels with your posts. The full atmosphere experience is so valuable above and beyond good food and prices.

  8. Juliette

    Now I want to check out that place! Actually, it reminds me quite a bit of the Patterson House here in Nashville. The feel of the place is a “speakeasy”. The outside is pretty darn unassuming. (http://images.everytrail.com/pics/fullsize/2750812-ThePattersonHouse.jpg) Heck, I’ve been there multiple times and still drive past it by accident. The website only has the operating hours and address. Inside it’s a bar where bartenders wear arm garters and mix unique drinks while everyone is seated at booths or at the bar. It’s a really neat place but really relies on word of mouth to bring in patrons.

    And that it does very well. The place is PACKED on the weekends. Now, they are on twitter but you don’t see any ads for the place around the city. At least, not that I’ve ever discovered. Though they don’t offer deals or incentives to refer folks or anything like that somehow no one minds. The place itself is enough of a treat. :)

    I’m not saying that’s a great way to do business for most folks. In fact it probably only works for a few select places like Patterson House and that totally rad Safe House. But the sure do have faith in word of mouth advertising.

    • Jana Quinn

      Great find, Juliette! The Patterson House does seem to have the same vibe as the Safe House.

      My guess is that you’re exactly right in saying that a few select places can benefit from this word-of-mouth ONLY advertising. The concepts (spies and speakeasys) are consistent with keeping things secret, and they both seem to be single restaurants/bars, not a part of a larger chain.

  9. Jill Tooley

    I love this place already! It’s like a secret club that everyone wants to be a part of (but maybe doesn’t know how). We definitely need to road trip it sometime and check it out!

    The study you quoted is FASCINATING. The value is $1,700 for a brand advocate? That’s incredible! And thanks for shedding light on the WOMMA. It’s good to see that word-of-mouth marketing is making such a comeback. In a way, it’s almost as if our advertising methods have come full circle; advertisements used to be all word-of-mouth due to lack of technology and now, despite all our advancements, we’ve come straight back to where we started. It’s kind of cool! :)

    • Jana Quinn

      Absolutely! Milwaukee has a nice downtown area, and we could catch an Iron game, a musical or play, or even just chill near the river.

      Nice observation on the word-of-mouth advertising coming full circle. It really goes to show that no matter how much technology evolves, there are STILL no shortcuts!

  10. Amy

    I fall into that category of people who gushes about their cell phone provider, good to know I’m worth over 1500 bucks!! :D Now, to find out how to get that amount deducted from my bill every month….

    • Jana Quinn

      Haha, that would be nice. Actually, Amanda’s husband has Boost Mobile, which gives its loyal customers a discount of $5 every six months you stay with them. That’s much better than Comcast’s nonsense slash-the-prices-for-new-people, jack-up-the-prices-for-the-loyal-ones approach.

      • Amy

        Oh, Comcast *shaking head*, when will you learn?? Haha

        • Jana Quinn

          Unfortunately, they’re the only game in town at a lot of places, so they know customers don’t have an alternative. As internet-based media viewing starts to outrank TV viewing (and it WILL happen), it will be interesting to see if Comcast will make any desperate bids for survival in its death throes.

          • Amy

            Comcast and I haven’t been on the best of terms, so it will be interesting to see how things play out :)

  11. mary

    Very interesting article. Love the info on WOMMA. I did not know it existed. We all contribute to the process. Excellent to get a response from their Media Director. Your Blogs rock!!!

    • Jana Quinn

      Thanks, Mary. I had the idea to write about the Safe House and stumbled across WOMMA purely by accident. A lucky surprise!

  12. Steve Ziemba

    Great post! I think the Safe House does a good job of making the common, uncommon. Thus, this is its talkability factor.

    • Jana Quinn

      Thanks! I completely agree. It takes something a restaurant with a fun theme and makes a full experience from the moment you hear from it to the moment you walk out.

      I think its WOM power comes from the fact that people only hear about it from others who’ve been there and liked it. I’m sure it’s more likely for people to share positive experiences with a friend who’s unfamiliar with a brand than to share negative experiences with a friend who’s unfamiliar with the brand. Since most people are hearing about it based on personal recommendation, they automatically have someone who’d like to go with them again.

      Win-win!

  13. Word-of-Mouth Marketing | Interview w/ Pat McCarthy from WOMMA, Part 1

    [...] people’s mistakes? I’m “other people.” You’re welcome.I had written a blog post about word-of-mouth marketing being a powerful tool for a particular restaurant, and I cited WOMMA as an organization that [...]

  14. Jill S

    Great post Jana – thanks for sharing. When you have your customers giving a good review or sharing the product with someone else, it sells itself. My business started using OpinionAmp as a proactive way to use real customer reviews to market our product online. Once you put it in the hands of your clients, they’ll sell the product for you. You can’t beat online positive reviews – no better advertising content than a happy client!

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