Marketing & Branding

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.

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.

Until next time, keep expanding your brand!