What’s Wrong with Word of Mouth Marketing


It’s common knowledge that word of mouth (WOM) by people you know is the most effective advertising. Research corroborates this:

Word of Mouth -- High Impact But Low Spending: Why ?
Word of Mouth — High Impact But Low Spending: Why ?

Yet, most Marketing organizations don’t behave as if it’s very important. According to PQ Media, 2008 WOM spending was $1.7B, +10% over the previous year. Estimated U.S. Marketing spending ranges from ~$500B all the way up to $1 trillion; WOM represents only 2-4% of total spend. So, why the impact vs. spending disparity ?  The answer, I think, is two-fold:

  • Word of mouth remains a black box for most Marketers — it’s really hard to figure out and even harder to do well.
  • It hasn’t been easily scalable–either within a persons social network or beyond.

Word of Mouth vs. Viral Marketing

Some people differentiate between WOM and viral. WOM is described as one to few, viral as one to many; as well, viral includes sharing and resharing–usually via the web. I think this distinction is largely false as WOM can become viral–e.g. the recent United Airlines guitar video (4.9M views).

Word Of Mouth Marketing
Word Of Mouth Marketing

WOM should build your brand. The mainstream media love to report on highly creative viral videos–e.g. the T-Mobile sing-a-long in Trafalgar Square, etc. These videos do generate incredible amounts of viewing, but are they really building the brand ? Do they engage consumers to better understand how and why the brand is better than alternatives ?

Word Of Mouth — More Scalable in Two Directions

WOM is changing as the web enables two simultaneous phenomenon:

  • Vertical Scalability — The web continues to enable new ways for consumers to share information  both within their social circle and beyond. Sharing opinions and ideas through blogs, Twitter, YouTube, Social Networking sites, etc. has vastly increased the scalability of WOM, as one person can now reach most people within their social network instantly and of course, people well beyond.
  • Horizontal Scalability — The rise of social networks and OpenID, Facebook Connect and similar services will enable personal network portability. This means that friends and families–and their opinions–will be able to flow with consumers as they traverse the web and interact with products and services. So, WOM from your social network will now become available in places it wasn’t before.

Basic Elements of Word of Mouth

Given the rising importance of WOM, how can you harness this powerful opportunity for your brand ?

1) Define Who’s Talking — Within your brand users, there’s almost always a group of 10-15% of users who are “amplifiers.” These consumers have unusually large social networks and form part of their self-identity from sharing new information with friends and family. Similarly, there are important non-users who need to be identified as well — bloggers, heavy Twitter users, etc. who can disproportionately impact your brand.

2) Define What They’re Talking About — Amplifiers don’t just randomly talk about your brand. In fact, they tend not to talk about your core mainstream messaging. Why ? Because everyone already knows about it; they get no psychic reward because there’s nothing new. They tend to talk about and share things that are important to them and also new and surprising about your brand–positively or negatively. Conduct research among amplifiers to understand the main themes they are talking about.

3) Determine Which Mediums They’re Using — Where are amplifiers talking about or sharing your brand ? Off-line in casual conversations ? On-line via Facebook ? Understanding which mediums amplifiers are using to talk about your brand gives you insight into how to facilitate or enable these conversations. Do research to find out.

4) Understand What Receivers Are Doing Next — Understanding receivers is just as important as understanding amplifiers. Without a receiver there’s no WOM. Most important is to understand what receivers do after hearing a theme. Do they visit the store ? Search on line ? Visit the web site ? Consult another friend ? Share via Twitter ?

5) Test and Qualify WOM Stimuli — If we know who is sharing, what they’re talking about, in which channels, and what receivers are doing after the conversation, then what ? Using WOM themes, develop a range of stimuli — e.g. customer experience “moments of truth,” white paper/special user content, tips/how-to’s, personalized web micro-sites, etc. to help drive accelerated word of mouth. Run a small test versus control. Did you get more people to talk or share your stimuli ? What did listeners do afterwards ? Did you build your brand equities ? Increase consideration and purchase of your brand ? Which stimuli worked best ?

WOM is hard work. Like most Marketing, it starts with really understanding your consumer. But the consumer understanding work is not well understood. And WOM is even harder to drive in a systematic and disciplined way. As WOM becomes more important, it becomes increasingly important for Marketing organizations to increase their WOM capabilities and most have a long way to go. What’s your Marketing organizations WOM IQ ?

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13 Responses to What’s Wrong with Word of Mouth Marketing

  1. I am doing a research on viral marketing for my master. The purpose of this study is to analyze three sucessful viral videos. If you want to participate, please click this link:

    http://www.surveymonkey.com/s.aspx?sm=kir1HOU0ur4YjWIbqTy1QQ_3d_3d

    Thank you

  2. wecandobiz says:

    Very interesting article Randall.

    For me, WOM has recommendation attached to it; whereas viral doesn’t. Either could be passed on to a few or to many people. Both are likely to get people look into what they’ve received, but a recommendation helps identify it as more credible which, I’m suggesting, would be likely to increase views/clicks/uptake.

    Certainly if I received details of an offer over Twitter with a simple “I’ve tried this and it’s great” attached, or a link to video to which my contact had commented “Do you think this is right?” I’d be much more likely to click that link than something clearly just passed on without comment.

    What marketeers are failing in is getting that element of explicit recommendation added to what’s being passed around. The simple act of transmission to contacts ISN’T a recommendation — many may not even have looked at what it is they are forwarding. That’s why recommendations have greater credibility attached; the sender helps give the value some context, increasing it’s value in the act.

    And it’s getting your fans to help build the value that makes the difference between success and a concept turning out to be a damp squib.

    Ian Hendry
    CEO, WeCanDo.BIZ
    http://www.wecando.biz

    • beardrs says:

      Hi Ian — Thanks for reading the post and the comment. You make a good point. I think passing along anything has somewhat of an implicit recommendation, but the explicit “I really like this product” or “you should consider this service” certainly makes a bigger impact. In my experience, these recommendations are usually attached to something that has surprised someone about the brand–either positive or negative, which they then pass along to others. If the surprise relates to the brand promise in some meaningful way, it’s more likely to drive consideration and purchase by the receiver. Great points and thanks again for the comment.
      Randall

  3. Steve Knox says:

    Randall;

    Great articulation of the differences between viral and true WOM. Unfortunately, it is viral that gets the hype, but there are very few instances where it is proven to have driven any business results. Frankly, unless your brand problem is awareness, then viral has little impact on your business. It may be entertaining, but I doubt it is building equity or sales results.

    Advocacy is the new holy grail. Marketers today do not have great measures of advocacy and consequently tend to ignore it. This is a huge mistake. The business case for advocates is compelling. On Tremor, we can prove that advocates reduce acquisition costs of new consumers, drive down retention costs of current consumers and build brand equity. It is a triple play.

    The psycholology of advocacy is a great open field. Some interesting academic work is going on. We have some new breakthroughs in the area. This will continue to be fertile soil for marketers that are willling to explore. The one thing that we know is that consumers do not advocate because you have a great marketing campaign. They advocate for much deeper and richer psychological reasons

    Steve Knox

    • beardrs says:

      Hi Steve — Thanks for reading the blog and the comments on WOM. Clearly, Tremor is on the leading edge of bringing some real and much needed science and discipline to the WOM “black box.” Key points in my post are, in fact, based on Tremor learnings. I agree with you that advocacy is really important, but would also add that in my experience advocacy does not necessarily equal WOM. In one business I led, there was a very strong and direct relationship between customer satisfaction and advocacy and willingness to provide referrals. However, not all advocates drove WOM, as some tended to talk and others didn’t, despite similar levels of satisfaction. I also believe that “surprise” plays a major role in advocacy and WOM, particularly when customers are positively surprised by the brand experience in some important way. Thanks again for contributing to the discussion.
      Randall

  4. Adam says:

    Randall,
    This is a great article. I love the distinction between the WOM and Viral. I think marketers also tend to gravitate towards viral because it’s more similar to traditional advertising. You can talk about yourself and be entertaining, similar to television ads.

    The point that I think is truly the most pertinent is point number two on your recommendations. I think WOM campaigns are inherently difficult for many simply because marketers are much more comfortable talking about brands and less so about concepts/ideas/topics of conversation. In my experience, this is the number on issue with WOM marketing.

    Adam
    http://www.blackboxstrategy.net

    • beardrs says:

      Adam — Thanks for the feedback and reading the blog. You make a really excellent point. It’s key to find out what your customers typically talk about in the category. It’s usually not directly about your core brand promise–as most people already know this. It usually is about something that is new and surprising (good or bad) about your product, service or company. Once you understand these general themes, you can design and build content stimuli that encourage and enable amplifiers to talk about them. My wife’s Lexus wouldn’t move out of park in airport long term parking, and I called customer assistance expecting a tow truck and rental car. Instead, they told me how to fix the problem on the spot and we drove away, surprised and delighted. I’ve told the story to many, many people and it illustrates how Lexus did their homework on customer experience and drove positive WOM even when a problem occurred.
      Randall

  5. This is an excellent clarification of an increasingly important issue in financial and professional services. One of the challenges I’ve found for professional services marketing people around WOM is that bankers, lawyers, consultants often assume that WOM requires no “official” marketing support – ie it can be driven by their own personal relationships, whereas in fact the most successful firms know that like all other marketing channels, WOM works best when based on the strong foundations of clear positioning, consistent messages (albeit in this case often subliminal)and of course consistent delivery. Making sure that the “amplifiers” are sending out the right messages is a role the marketing team can take on but it may take a rather different approach to the one usually used for controlling brand messages.

    • beardrs says:

      Simon — Thanks for the comment and reading the blog. You’re right on target with your thoughts re professional services. My experience in this area is that firms and individuals are sometimes good at generating referrals, but not very structured or disciplined when it comes to WOM. The ideal is to have both working together–e.g. a prof svcs person generates a referral, and when they contact the person, learn that they’ve already been exposed to positive WOM from another client. This increases the odds of prospect conversion considerably versus the prospect hearing nothing positive about the firm in advance. This is a huge opportunity for firms in prof svcs that get it right.
      Randall

  6. Grace says:

    Interesting discussion.

    I believe that Marketers can ignite WOM by re-setting their objective in designing products/services — moving from “driving purchase” to “worth recommending to others”. This is a taller order as the product/service isn’t being designed just for personal use but rather designed for the user to put their reputation on the line for someone else to buy the product/service. As you said, it must delight and the level of delight must be high enough that you can’t contain it within yourself. You want others to experience the delight.

    WOM can also be ignited by thinking beyond the message -rather, look at all touch points where users experience the product/service. The delightful/surprising experiences form the basis for the stories that people share about your brand. Your Lexus story is a great example.

    • beardrs says:

      Hi Grace — Thanks for reading the blog and taking the time to share your comments. Great points. An outstanding customer experience is the foundation for any positive word of mouth. Over-delivering against customers expectations should be the primary means of igniting customer “stories” that are shared. Also, as you say, understanding and defining the “desired customer experience” across every touchpoint helps drive a better experience and often delights customers because expectations are low and because many of these touchpoints are poorly designed or understood by competitors.
      Randall

  7. Constantin says:

    Great article. Thank you.

  8. […] in the CPG space. Much has been written about word of mouth (including my previous post “What’s Wrong with Word of Mouth Marketing“) but too little has been focused on the more narrow topic of what is known about buzz and […]

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