Patagonia polishes off the ‘magic bullet’ of word-of-mouth advertising

With annual surveys indicating which customers spread the word about outdoor apparel and gear merchant Patagonia to their friends, the retailer tailors its marketing to maximize the benefits of word-of-mouth advertising, Craig Wilson, director of e-commerce , will reveal at the eTail 2004 Conference. "We think we’re starting to discover what the magic bullet is," he says. "It’s customers using our products who are excited to tell their family and friends."

But building a marketing strategy around its best customers is not a simple matter, Wilson will explain during his Track B session, "Creating a Hierarchy of Metrics to Identify the Critical Data that Drives Multi-Channel Benefits," at the eTail 2004 Conference in Palm Springs, CA, at 12:30 p.m. on Wed, Feb. 25.

"We’re figuring out how to understand what customers are doing, and what we can do to better facilitate our relationship with them," Wilson says. In brief e-mailed survey forms, Patagonia asks its customers how they first heard about the retailer and if and how they recommend Patagonia to others. It has learned that customers who do the most multi-channel shopping in its stores, on its web site and through its catalog, Wilson says, are most likely to recommend Patagonia to family and friends.

"If a customer engages us once and doesn’t repeat soon, she’s not likely to recommend us," Wilson says. "But having more interactions our brand increases the rate that they become comfortable recommending us."

Wilson adds that while Patagonia may cut back on marketing to customers who have stayed away for an extended time, it will continue to send catalogs and other materials to steadier customers – even if they no longer shop through the catalog – so they have the most accurate and current product information when making recommendations, Wilson says. "Our customer is our best advocate, but it’s an equation that takes time to play out," he says. "When our customers come to understand our product quality, they become more interested in telling their friends and family. But they need to have the right information to do that, because it builds their confidence to know what they’re talking about. They become our best marketing tool."