Brand New Customers Only.
Having got over the delicious weirdness of word of mouth marketing needing to have an association (presumably to spread the word), I pondered the following statement cited in Guy's preview.
"The most powerful word-of-mouth advocates might be the customers who have only done business with you once so far. They are the most excited; repeat customers are probably accustomed to the great product/service and therefore, ironically, less likely to talk about it."
This struck me as a dangerously complacent view (even if "research" can justify it) and finds echo today in Kathy's post which I like to think was inspired by my seminal work Geek Marketing 101. She rightly asks,
"Why do so many companies treat potential users so much better than existing users?"
Maybe the reasoning is connected to what I see as the totally misguided belief that once you hook a customer (and this also erroneously is assumed to mean a young one), then their loyalty is assured. Companies know it is cheaper to keep a customer than to capture a new one, so the financial logic of chasing new prospects rather than growing more profitable existing ones must surely be predicated on some such falsehood. The outstanding Ageless Marketing by David Wolfe put the sword to this many years ago and is neatly encapsulated in his recent post.
Loyalty is not assured, brains and motivations evolve and the demography of most western economies is shifting against you. Don't be like the manager who featured in a comment I recently read on a blogpost. In it, a marketing assistant explained that he'd had no time in the past two years to perfect a macro with which he identified his boss's most profitable and exploitable customers because said boss was only interested in his putting together another list of 1000 new prospects!
Existing customers may appear docile but, as I keep banging on, success is very often about accentuating the negative and good service follows the elimination of those negatives. Crucially, word of mouth is not just about the positive recommendations. If any negatives return, you can be absolutely certain that existing customers will notice, talk and walk.
Addendum: As a bonus for non-UK readers, I staged this role play exercise for your viewing pleasure.