You just can't get the staff

Anecdotal evidence has always suggested that word of mouth is the most effective means of marketing. After all, it stands to reason that a positive remark by somebody without a vested interest in a business should be more valuable than thousands of pounds' worth of advertising.

Now it appears that this supposition is fact. According to the "loyalty model" developed by the management consultancy Bain & Co, satisfied customers each tell an average of 12 people about the product or service they have enjoyed.

The finding is quoted in a new report from Business Intelligence called "Measuring and Valuing Customer Relationships". The study of the burgeoning area of "customer relationship management" by David Shaw, visiting professor of marketing at Cranfield Business School, and David Reed, a leading marketing journalist, claims that in identifying customers who are advocates of a business, Bain has found "a key marketing objective".

Drawing on the experiences of such varied organisations as Hewlett-Packard, Disneyland Paris and Tesco, it says that successful customer management depends on integrating market research, quality, brand management and other skills.

Such an approach also requires a company to surmount significant organisational barriers, in terms of departmental "ownership" of information, say the authors.

However, there are even higher hurdles in the form of employees - a group that receives little attention in the report. Mr Shaw and Mr Reed describe how some businesses seek to push "brand soul" concepts across their activities through such means as training programmes and "mystery shopping" initiatives designed to see how staff really behave towards customers. But, they point out, these "can lead to staff resistance and a culture of rebellion, which ultimately undermines the brand soul objectives".

This is hardly a surprise to the Marketing & Communications Agency, which published a survey last month showing that one in six consumers admits to having been put off making purchases in the previous three months because of the way he or she was treated by staff.

More worryingly for those who would seek to characterise this as the grumbling of old people, the young and affluent appear even more dissatisfied: nearly a quarter of those aged between 15 and 34 and those with household incomes of over pounds 30,000 were put off purchasing in this way.

The Marketing & Communications Agency says that the survey - conducted by Mori and said to be the first consumer research of its kind designed to assess the commercial impact of staff attitudes and behaviour - shows a gap between consumers' perceptions and the increasing view among companies that their employees are "brand ambassadors".

Only 20 per cent of consumers say that staff showed an appreciation for their interest or purchase; just 12 per cent feel staff are enthusiastic about their company's products or services; and a mere 7 per cent say staff spoke highly of the company.

Kevin Thomson, chairman of the agency, believes so strongly in the link between staff and consumer loyalty that he has written a book, Passion at Work. He says the survey carries a critical message for British industry: "Just think of the number of companies boasting, 'our people are our brand'. If this is the case, we have a branding crisis on our hands in Britain."

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