Simple system of word-of-mouth list building
Key to the success of Utility Warehouse (UW) has been FROGS (more about frogs later) and the company’s long-standing refusal to advertise. Perhaps that seems like a ridiculous statement when you stop to consider the advertising spend of companies like British Telecom (BT), Virgin, Sky, EDF, Vodafone etc, but not really when you consider the higher value of word-of-mouth advertising – also know as referral marketing or direct sales.
And that is where FROGS come into their own – a system of referral gathering that hinges on the fact that we all know at least a few hundred people. Uniquely as a business model, it is fair to say that everyone is a potential UW customer or partner. If you question this, take a moment to ask yourself who of the people you know does not use gas, electricity, broadband, insurance, landline and/or mobile phone? Unless you live in a totally ‘off-grid’ community, you would be hard pressed to name even one person who does not use these living-critical, essential household and business services.
Perfect storm of essential services
Add to this thinking that we live in a world of cost comparison services, where consumers are more receptive than ever before to consider the value of simplicity, value for money, best-in-class customer service and a myriad of other valuable benefits.
So with UW we have that ‘perfect storm’ of essential services unavoidably used by 100% of the population combined with the power of referral marketing and with customers who are more receptive than ever to improved value, service and simplicity. Add to this mix, a salesforce of UW Partners (and their frogs) and the outcome is a FTSE 250 British success story with over 650,000 customers – all gathered through traditional word-of-mouth ‘advertising’ which is arguably the most effective way of building any business.
FROGS is simply a memory jogging approach
With any service-based business, nothing happens without a sales process and for there to be a sales process, we need potential customers to share our services with. As UW Partners we therefore need a list of names i.e. people we know who might be receptive to ways of saving money, generating income or both. FROGS is simply a memory jogging approach to identifying our own list of names.
F = friends and family. R = recreational contacts. O = occupational contacts. G = geographical contacts. S = same name contacts.
Another variant of the FROGS approach…
F = Friends. R = Relatives. O = Organisations. G = Geographical. S = Social Media.
In simple terms – by using the power of ‘the list’, there exists endless potential to promote and communicate the benefits of being a UW customer. Add to this the power of referrals and it’s easy to see how successful UW Partners are able to introduce hundreds of customers and in so doing, they are rewarded with a residual income on the spend of their customers.