Word Of Mouth (WOM) is the primary factor behind 20 to 50 percent of consumer decisions. According to a recent article by McKinsey Consulting, those decisions tend to be first-time purchases, expensive products, or those that require a lot of research. Still, over the years,
many stations have identified some form of WOM or buzz as an important component of their plan. And clearly the digital world has amplified WOM beyond just a single verbal conversation.
However, while seemingly straight forward and simple to understand, WOM is a dynamic, multi-faceted phenomenon. The more you understand WOM and its dimensions, the more effective you will be employing it.
McKinsey defines WOM in three forms: experiential, consequential, and intentional. It’s important to know the type of WOM you’re attempting to influence and measure.
Experiential word of mouth is the most common and powerful form, typically accounting for 50 to 80 percent of word-of-mouth activity in any given product category. It results from a consumer’s direct experience with a product or service, largely when that experience deviates from what’s expected. Complaints when airlines lose luggage are a classic example of experiential word of mouth, which adversely affects brand sentiment and, ultimately, equity, reducing both receptiveness to traditional marketing and the effect of positive word of mouth from other sources. Positive word of mouth, on the other hand, can generate a tailwind for a product or service.
Marketing activities also can trigger word of mouth. The most common is consequential word of mouth, which occurs when consumers directly exposed to traditional marketing campaigns pass on messages about them or the brands they publicize. dmr’s Tell-A-Friend components are specifically designed to influence and track WOM this way. The impact of those messages is often stronger than the direct effect of advertisements, because marketing campaigns that trigger positive word of mouth have comparatively higher reach and influence. Marketers need to consider both the direct and the pass-on effects of word of mouth when determining the message and media mix that maximizes the return on their investments.
A less common form of word of mouth is intentional—for example, when marketers use celebrity endorsements to trigger positive buzz for product launches. Few companies invest in generating intentional word of mouth, partly because its effects are difficult to measure and because many marketers are unsure if they can successfully execute intentional word-of-mouth campaigns.
What Drives WOM
The key driver of effective WOM is that the content of a message must address important features in order to carry influence. In skin care, packaging and ingredients create more powerful word of mouth than do emotional messages about how a product makes people feel. Marketers tend to build campaigns around emotional positioning, but consumers actually tend to talk—and generate buzz—about functional messages.
The second critical driver is the identity of the person who sends a message: the word-of-mouth receiver must trust the sender and believe that he or she really knows the brand.
Finally, the environment where word of mouth circulates is crucial to the power of messages. Old-fashioned kitchen table recommendations and their online equivalents remain the most important. After all, a person with 300 friends on Facebook may happily ignore the advice of 290 of them. It’s the small, close-knit network of trusted friends that has the real influence.
The type of campaign that companies choose to adopt depends on the degree to which marketers can find and target influentials. Marketers capable of undertaking one-to-one marketing—such as radio stations—are uniquely positioned to execute controlled and effective intentional word-of-mouth campaigns. Many stations now have granular data that can precisely locate influentials, initiate tell-a-friends, encourage sharing, comments, etc via the web site, or regularly post and amplify station interactions via social media sites. That means messages can be directed at specific individuals who are most likely to spread positive word of mouth through their social networks. As a message spreads, this approach generates an exponential word-of-mouth impact, similar to the ripple effect when a pebble is dropped in a pond.
Marketers have always been aware of the effect of word of mouth, and there is clearly an art to effective word-of-mouth campaigning. Yet the science behind word-of-mouth helps reveal how to hone and deploy that art; it shows which messages consumers are likely to pass on and the impact of those messages. This allows marketers to estimate the tangible effect word of mouth has on brand equity and sales. These insights are essential for companies that want to harness the potential of word of mouth and to realize higher returns on their marketing investments.
Below a podcast regarding WOM from the authors of the article.