Secret Recipe For Word Of Mouth Marketing!

I am guessing most readers know what branding and marketing mean, so I would like to start with what I would really like to say, rather than with a boring generic introduction full of marketing related jargons. Building a brand is undoubtedly the most challenging task any startup faces. Brand is what gets you repeat customers and in-turn gets you funded, which is why start-ups should invest more in branding. In my view, this is a very healthy cycle, although people don’t see it that way.

There are several things that contribute to a brand. Name, logo, user interface, user experience, service quality, leave behind, tag line, and so on. There are literally zillion things that needs to be in perfect place to build a brand. Worry not- I am not going to lecture on all those things. While I was building my brand at MyWash.in I came up with a few theories which I have put to use as I have run & built MyWash. I would like to share one of them today.

Broadly any B2C company or more specifically startup can be put in one of these 4 categories

  1. Premium
  2. Cheap
  3. Perceived premium
  4. Perceived cheap

This is largely based on the expectations they set with the customers for their respective product or service. The major factor that changes in the output for all these categories is WORD OF MOUTH.

Premium

Here a company will communicate straight to the customer that we are a costly service/product and that you will get what you pay for. Rolex falls in this category. You expect a $10,000 watch and you get a $10,000 watch. It almost never mentions price or discount anywhere, yet people understand that it is going to burn a hole in the pocket and anyone who values their time more than money (pun intended) will buy it. Customers belonging to this category tend to flaunt a lot. More often, the customers of this category buy the product or service just to flaunt. Word of mouth is fairly high in this category but customer base is rather niche to result in mass adoption.

Cheap

Even in this scenario, the customer expectations are set just right. The customer gets what they pay for, except that they are prepared to buy a low-standard product while knowing that it is a low-standard product. BATA is one famous example I can think for this category. Famous for its pricing ending with as many 9s as it can, BATA has set the customer expectation that their products are cheaper than anyone else while quality is strictly decent. The customer will most likely never flaunt this product (the purpose intended is to use it than flaunt it). Word of mouth is just about average in this category.

Perceived Premium

In this category customers’ expectations are intentionally set lower, a customer is typically under-promised and over-delivered. UBER, One Plus, and Amazon are few companies I can think for this category. A UBER ad almost always only a black Mercedes-Benz creating an impression that the service is going to charge a bomb, but it surprises you by saying “I am just 7 Rs per Km”. This makes any customer instantly want to try the service or product. The customers of this product will drive insanely huge amount of word-of-mouth.

Perceived Cheap

Here the customers feel either disappointed or cheated. Customer here is over-promised and under-delivered. Ola, and Snapdeal are few companies that fall under this category. You expect a 6 Rs per Km service from Ola an when you see a 7 Rs you tend to feel this is premium (I might have exaggerated a bit, but you get the point right!). Basically, both Ola and UBER are same priced, yet the same customer who sees an ad with Indica and other with Mercedes-Benz tends to perceive the price differently. In one-case it comes across as a premium service at an affordable price and in the other it is a decent service at a higher price than what it deserves. The word-of-mouth is usually lowest for this category. Most of the time it is discounting that drives demand to these businesses.

I have intentionally chosen to build MyWash as a perceived premium brand and in the hind sight I think that is one of the best decisions I made. Perceived premium or premium brand is where you can drive your business solely through word-of-mouth. It keeps the cost of customer acquisition fairly low and customer retention high, compared to the other categories.

I believe any startup is all about habit changing and habit changing, is largely easier when the brand you build is a perceived premium. It is not wrong if you want to build a cheap brand as long as you know that it is what is going to make your business successful.

I love branding and this is one of the many theories I have when it comes to this domain, please feel share your theories with me via comments.

My personal ranking of these 4 categories is

  1. Perceived premium
  2. Premium
  3. Cheap
  4. Perceived Cheap (very risky to choose this one)

Written exclusively for Paul Writer.

About the author  ⁄ Silus Reddy Chintapalli

Silus Chintapalli

Silus Chintapalli is Category head for Laundry division of HouseJoy. Silus is a BITS Pilani alumni and the former founder of MyWash. MyWash.in is credited with being India's largest on-demand laundry service. It recorded one of the fastest growths in the Startup Category in India and revolutionized the way people looked at laundry in India. MyWash has since been acquired and is currently functioning under the Housejoy banner.

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