Whitespace: The power of word of mouth

By Mark Fowler

There has been a recent flurry of consumer research published which signals the accelerating importance of Word of Mouth (WOM) marketing in shaping brand perceptions and purchasing decisions.

WOM promotion is the passing of information by verbal and written means, especially recommendations, but also general information, in an informal, person-to-person manner, rather than by mass media, advertising, organised publication, or traditional marketing (1).

It's about the importance of trust as a determinant of the credibility of market messages.  People are now more inclined to believe word of mouth over more formal forms of promotion because the communicator was satisfied by the goods or services provided and is unlikely to have an ulterior motive (1).

Show me the numbers

• BIGresearch's US release of their Simultaneous Media Usage Survey (SIMM VII) in December showed that WOM is the most influential media for all ages. The respondents ranked the media as follows (2):   

1. Word of Mouth
2. TV
3. Coupons
4. Newspaper Inserts
5. Read Article
6. Direct Mail
7. Magazines
8. In-store Promotion
9. Cable TV
10. Internet Advertising 

• 76% of US people don’t believe that companies tell the truth in advertisements. (3)
• 68% of US people trust other people "like themselves", up from 22% in 2003. (4)
• 92% of US customers cite WOM as best source for product ideas, up from 67% in 1977. (5)
• Friends and family are considered either an "extremely" or "very" credible source of information by 58% of US respondents (up from 42% in 2005), second only to articles in business magazines. (4)
• The stated impact of known contacts is twice as important to people than the impact company led info. (6)

Why the shift?
The decreasing power of the traditional top down messaging, and the rapidly rising importance of consumer word of mouth marketing is being driven by two main factors:

• As broadband becomes ubiquitous, the Internet is enabling connected individuals to move from merely consuming information to social networking and content creation. Customers can now and do readily share their opinions and ideas about product and service experiences in a trusted peer-to-peer communications environment.
• The deluge of corporate and government scandals over the last five years has seriously eroded citizen and consumer trust in the credibility of the communications from business leaders and politicians. Just mention of the acronyms HIH, AWB and WMD and you know what we mean. For instance, PR company Edelman’s Trust Barometer 2006 research has just reported that people who lose trust in a company do not simply internalise their doubts, they talk to others and spread distrust – with up to 33% now using the web to post their views.

WOM starter pack
So where might you begin developing a WOM strategy? The Word of Mouth Marketing Association (WOMMA) recently held their second basic training conference in San Francisco. At one of the workshops several expert panellists discussed a series of possible WOM strategies and approaches. (7) A sample of these ideas is listed below:

• Make it easy for people to find you and tell people about you.
• Create a market advisory council which includes customers.
• Use interesting stories to bring your word of mouth topics to life.
• Encourage your brand champions to tell two friends about you, not just one.
• Do something unexpected and generous for your customers - send a free product (include an extra for them to pass along to a friend) just for being a valued customer.
• Identify and engage with ‘influentials’ using online social networking sites.
• Create experiences around your products and services.
• Be an evangelist for your evangelists.
• It's not just marketing: embed WOM into your sales culture.
• Use humour or "did you know" language to help consumers feel like they have something funny or unique to add to the conversation.
• Hide it. Discovery is a trigger for WOM, so make your tool or marketing message hard to find and you'll create something people will want to talk about and share.
• Leverage provocative content to make everyday product talk-worthy. 

Bottom line
We have reached a significant tipping point, a shift in where individuals, citizens and consumers go to get credible information and advice about brands, products and services. The trust equation has changed, so the way if effective promotion and marketing must change.

Notes

1. Definition: Word of mouth, Wikipedia.org, 4 September 2006
2. BIGresearch Releases SIMM VII -  Word of Mouth Most Influential, BIGresearch, 20 December 2005
3. Yankelovick, 2005
4. Edelman Trust Barometer 2006 [PDF]
5. GfK NOP/Rop
6. Millward Brown, WOM Influence Study, 2005
7. Practical Word of Mouth: 43 Word of Mouth Ideas You Can Implement Tomorrow for Not Much Money, Word of Mouth Basic Training 2, 20 June 2006

Mark Fowler is a Director of Global Foresight Network Pty Ltd, a business consultancy which provides research, strategic advice, facilitation and training services to help organisations navigate the 21st Century. Whitespace is an AIM monthly feature focusing on trends, opportunities and new concepts in the business world.

Comments

[kala007]

Has anyone out there heard about WideCircles.com. It seems like a way better service then wasting money on PPC. Apparently they are using refering websites ( forums, blogs, wiki, etc. ) and have a viral word of mouth distributed approach to it. My friend told me he got around 100 visits from single post which cost him $0.40c. I am going to give them a try today . In case you are intrested here is it. http://widecircles.com?s=imt1

[shanthi]

Good menegmant methd.I don’t keep mobile only for communication, but it is a mode of entertainment for me.
----------------
shanthi

Put The Message Where It Matters! WideCircles aka Wide Circles represents relevant, distributed, highly targeted and efficient internet word of mouth marketing using entertaining or informative messages that are designed to be passed along in an exponential fashion using social network mediums such as blogs, forums, wikis and so on. http://widecircles.com

[BuchananRosanna]

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