WORD OF MOUTH MARKETING

1. Introduction

At its core, word-of-mouth marketing is all about marketers recognizing the power of a
conversation and seeking to participate in it – by activating it, organizing it, listening to
it, and measuring its impact.

Word of mouth (WOM) is the sharing of an honest opinion between two or more people.
While there are a number of different techniques under the umbrella of WOM, they all
share these fundamental attributes: 

 Two-way communication: WOM is about marketing with consumers, not simply

broadcasting scripted messages at them.  
 Facilitating communication: helping consumers to share their honest opinions and
providing tools and encouragement

We have all heard repeatedly that traditional media is losing its impact as a result of a
variety of trends, including declining viewer ship, disruptive technologies like TiVo,
Podcasting and video on demand.  Simply, it is becoming more difficult than ever to
connect with customers – at a time in which connecting is essential. Customers have
more choice, voice and control, more ways to create, communicate and collaborate than
ever before. So amidst this sea change of consumer behavior and media consumption
habits, marketers are increasingly looking to what may be the oldest, and arguably the
most effective, form of marketing there is – WOM.

While we’ve all experienced its power first-hand, the rise in interest in word-of-mouth
marketing has led to a body of research that has shown what has long been believed --
that it’s the most effective medium to drive sales. In their simultaneous media usage
study in 2005, BIGResearch reports that WOM ranks highest in driving consumers’
purchase decisions – above TV, Internet, print and radio.

Just how widespread is WOM? According to the Keller Fay Group, Americans engage in
3.5 billion brand-related conversations every day. We love to talk about products and
brands. And while the vast majority of those conversations still occur offline (92 percent
says the Keller Fay Group), new online tools and technologies are giving people more
and more ways to stay connected and share their opinions.

2. How WOM Works

When considering the spread of WOM, most insiders talk in terms of generations – I tell
you something, you tell a friend, they tell a friend, and so on. One useful visual to
imagine when discussing WOM spread, or reach, is ripples in a pond. A rock is thrown
into the water and the ripples begin. The catalyst, or “rock,” is referred to as generation
zero (G-0). The person to whom G-0 speaks is generation 1 (G-1), and so on.
Research shows that on average, a G-0 consumer will recommend a product or brand to
12 other people, each of whom, in turn, will mention the item to another four people. So,
by measuring just two generations it’s easy to see the power of WOM.  One customer can
generate more than 60 communications.

Types of WOM Marketing

We can divide WOM broadly into two categories – organic and accelerated.

Organic WOM

Brand-related conversations are happening in the marketplace without any marketing

push whatsoever. A colleague is surprised by the size of the slice of pizza at a nearby
café; a friend suggests a perfect beach read – products and services as part of our
everyday lexicon. Whether sharing recommendations or telling friends about a negative
experience, these discussions result from customers’ everyday interactions with brands.
This type of WOM can be informed (and triggered) by a number of factors that have
nothing to do with an advertising campaign or special promotion, but marketers can learn
a great deal about brand perceptions by paying attention to and actively participating in
these organic conversations. 

Accelerated WOM  

Marketing programs can also be specifically designed to generate WOM. There are quite
a few terms and practices that are used, sometimes interchangeably, when speaking about
these practices. Let’s start by defining some of the more common ones.

Viral Marketing uses consumers as the distribution platform for a marketing message.
Remember Paris Hilton and her cheeseburger? (http://spicyparis.com/paris.html )  The
subservient chicken? (http://www.subservientchicken.com/ ) These are well-known
examples of viral campaigns. Viral programs often use entertainment value or
controversy as the driver behind the spread of the promotional content. They can be
extremely effective, but it’s important to find the right balance between entertainment
and brand message. 

Buzz Marketing is an event or activity intended to generate excitement among

consumers. Perhaps the most famous example of buzz marketing occurred when Oprah
Winfrey gave away 276 Pontiac G6 sedans to her entire studio audience
(http://en.wikipedia.org/wiki/Pontiac_G6#Marketing). When well executed, buzz
marketing can create significant surge in product awareness, but since it is generally
confined to a single event (and often an outrageous event or PR stunt), it may not always
result in ongoing advocacy. 

Consumer generated media (CGM) are brand-related messages that are created by
everyday people. They can range from the entertaining to the downright bizarre. Some
notable examples of consumer-generated media are the Diet Coke and Mentors
experiment (http://eepybird.com/exp144.html) and the McNuggets “song”
(http://youtube.com/watch?v=XSZ6k3QIsAk). Some brands are also engaging consumers
and directly encouraging them to create CGM as part of a campaign, such as Doritos
2007 Super Bowl ad (http://promotions.yahoo.com/doritos/ ). In some cases, these
attempts have met with mixed results, such as the recent Chevy Tahoe campaign in which
consumers used the brand-supplied artwork to create unflattering ads.

WOM Media programs engage real consumers to experience products and services and
share their opinions with others. They can range from grassroots or “influencer”
programs involving a small number of individuals to large-scale WOM media
communities where tens of thousands of consumers are engaged with a brand.

This is by no means a complete list of all the programs and techniques available to
generate WOM. Other approaches include social media marketing, brand blogging,
community marketing, and more techniques are emerging quickly as interest in WOM
continues to grow. 

3. WOM Ethics and Best Practices

The power of WOM is rooted in trust. So, while it’s important to adhere to honest and
ethical practices in all forms of marketing, it is critical to do so within WOM marketing,
where the credibility of the participant is paramount. Regardless of the WOM medium or
technique, disclosure is the cornerstone of any credible and legitimate program. The
Word of Mouth Marketing Association sums it up well in their “Honesty ROI,” which
identifies three basic building blocks for ethical WOM programs:

 Honesty of Relationship: You say who you're speaking for

 Honesty of Opinion: You say what you believe
 Honesty of Identity: You never obscure your identity

Recent research reinforces the value of disclosure. A 2006 study from Northeastern
University found that “none of the key outcome metrics (credibility, inquiry, use,
purchase, and pass-along/relay) were negatively affected by the agent disclosing their
affiliation.” In fact, the study determined that “pass-along/relay rate (the number of
people a person told after speaking with a word-of-mouth marketing agent) actually
increased when the conversational partner was aware they were talking with a participant
in an organized word-of-mouth marketing program.” 

WOM Best Practices 

Help Tell Stories: People want to share personal experiences with your product, not pass
along scripted marketing messages. And stories are based in experience.   So provide
people with opportunities to have an experience with your brand and connect those
experiences to their personal stories to ignite WOM. 
Listen:  WOM is about conversation. Learning to listen effectively to your customers is
critical, whether through your existing customer service touch points, monitoring
conversation online or through managed WOM programs. Make sure your customers
have a voice, and that you’re listening and responding to what they are telling you. 

Polarize:  Consumers have opinions. Don’t be afraid to let your brand have one, too. Too
often, marketers try to smooth every rough edge in an attempt to be all things to all
people, and in the process leave nothing for real people to talk about.

Create Experiences:  By allowing people to experience a product first-hand and to

organize around their experience with a particular brand, marketers can create a fertile
ground for conversation and interaction.

In Closing

WOM is often referred to as the Holy Grail of marketing. It’s natural, honest and can’t be
faked or manufactured. Yet marketers have more tools than ever to listen to and
collaborate with our customers, and create programs to foster and ignite true advocacy in
the marketplace.