This article was originally published in 2015 and has been completely updated in 2020.
While having a haircut recently, I was reminded of the power of word-of-mouth marketing campaigns. My barber Jacob, a part-time rapper and guitar player, said he doesn’t seek social media coverage to build up his fan base for gigs – he finds offline word-of-mouth more effective.
This raises the question of word-of-mouth marketing’s value. The answer is a resounding “Very important.” Around 19% of an average US brand’s sales is driven by social conversations – offline and online – as reported in a New York Times article on 26 November 2017. These social conversations are worth up to US$10 trillion nationally, according to a new study by Engagement Labs.
Word-of-mouth marketing (WOM) is the art of using your target audience’s online and offline conversations to build a greater presence within stakeholder communities to strengthen reputation, increase brand awareness, attract prospects and, ultimately, drive sales.
WOM is triggered by a better-than-expected customer experience. Satisfied customers tell their contacts how much they like your business, product or service. If they tell you directly, you can ask permission to relay their kind words to the wider marketplace. If your monitoring services find their comments in social media or traditional media, you can also aim to communicate this positive customer feedback to the wider marketplace, with the customers’ permission.
WOM is extremely cost effective because it is basically an unpaid form of promotion.
This is basically third party endorsement, a fundamental public relations concept. That’s why WOM is so important to include in communication campaign plans.
Two thirds of the impact of word-of-mouth marketing is offline (face-to-face and phone) and one third online (through social media of various kinds, including social networking sites, ratings and reviews, blogs and the like), according to a major study conducted for the Word of Mouth Marketing Association (WOMMA) in 2014.
This finding was supported in a report by Canadian social research firm Engagement Labs that found “social media does not reflect the much larger conversation happening in real life,” and that “consumer sentiment is likely to be very different offline than online.” The report concluded that companies often wrongly see social media as an accurate and sufficient guide for tracking consumer sentiment. However, people’s private conversations with friends and family may be quite different from what they say in the public arena of social media. Therefore, it is important to track offline conversations.
Morrissey gave the example of Nordstrom, a US fashion retailer President Trump blasted for dropping his daughter Ivanka’s clothing line from its stores. Trump’s supporters hit social media to call for boycotting the retailer. Nordstrom management were worried their share price might suffer like some other brands Trump had criticized via Twitter. “Instead, Nordstrom’s shares rose, and its business outperformed many of its rivals in the troubled retail industry in the months that followed.”
Extensive research has shown word-of-mouth marketing is 10 times more effective than traditional advertising, according to Jonah Berger, Associate Professor of Marketing at the Wharton School at the University of Pennsylvania.
Consumers trust their circle of family, friends and contacts. This is why word of mouth marketing is the most valuable source of marketing. According to a Nielsen study, 92% of consumers believe suggestions from friends and family more than they do advertising – this figure alone justifies the word-of-mouth case.
This is part of a larger trend in society that shows individuals are withdrawing their trust into a smaller circle of people and away from traditionally respected stakeholders and institutions. For instance, the 2017 Edelman Trust Barometer Report showed that employees considered the most trusted spokespersons on all their company’s major issues to be fellow employees rather than their CEO, a senior executive, academic, consumer – or (shock, horror – at the bottom of the list) their media spokesperson.
WOM doesn’t stop after just one interaction. One person will tell another, and that person will tell someone else, then that person will continue the chain and spread the word further, making it a great vehicle for exposure and distribution – if used well.
Of course, the same is true in reverse – negative news can spread just as fast. However, the essential benefit of WOM in the connected era is personal endorsement.
Catering to social media dominates much of marketing thinking these days. Strong news, human interest or consumer angles seem essential in order to create a good response from people. The aim is to describe the product or service in a way that is easily repeatable, memorable and persuasive. The words must encompass the unique selling proposition’ or ‘unique value proposition.’
Of course, it is a big plus if you can find these elusive angles. But research shows that consumers respond differently in offline mode compared with the online option. Interesting content matters for online sharing, but it doesn’t seem to matter much, if at all, for offline sharing, in Jonah Berger’s view.
If the product is interesting, the goal could be getting more online discussion through ads or online content that surprises people or is more interesting than expected. “You’re writing a kind of press release or story that you hope people share online to talk about how remarkable [a product] is,” says Berger: “Make it seem exciting.” Four tips on this are below.
But if the product falls into the category of ‘less interesting’ or mundane, then making the product more accessible in consumers’ minds, or more publicly visible, may be a better way to spend a marketing budget. The goal would be to trigger people to think about the product during on-the-spot, face-to-face discussions — such as workplace interactions, or contact with friends and family.
“Some of the brands I work with say things like, “We could never do word-of-mouth because there’s nothing exciting about us,” Berger notes. “But people talk about the weather all the time. They talk about what they had for lunch. It’s not that these are the most exciting things in the world; it’s that they’re top of mind, and people are thinking about them. So that’s a great way to get people to share as well, particularly offline.”
Nevertheless, you have to base a word-of-mouth marketing campaign on value-for-money, quality products or services. This is simple to say, but can be difficult to put into place, and may take time. These top products or services need to be supported with first-class customer service. As Warren Buffet said recently, retailers need to delight their customer, especially in these days of online competition from retailers like Amazon.
If you would like to read some recent highly successful word-of-mouth case studies, here are a couple of really useful links:
Think of your message as social currency – share what makes you look fun/good/interesting. This entices sharing. Consumers feel more confident in the information they’re sharing when they’re contributing something that’s worth talking about. For example, research has shown that Facebook users are more likely to share content that educates their network, and/or makes them look good and reinforces a certain image of themselves. You can tap into such behavioral trends to benefit your messaging.
Can you tie yourself into other things that your consumers do or use? If people remember you, they’ll continue to talk about you.
If you establish yourself with people, they will share the experience with friends. Sharing helpful information makes you valuable. Great, unique customer experiences, along with having a great product, can help increase your value, and thus, your WOM potential.
Creating emotion goes hand in hand with creating value. People are more likely to share something that promotes high arousal, and they are more likely to share the experience with others afterwards. No one shares an ‘OK’ experience. People share the things that make them happy or upset.
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