I routinely look at new marketing concepts as over-hyped, relative to generating a good ROI, and word of mouth marketing (WOMM) seems no different—but deserves some discussion.
To begin with, let’s define our terms.
Paid media is activity generated by a company through media outlets like TV, radio, print, etc.
Owned media is media activity via channels the company owns, such as in-store POS, brochures and press releases.
Earned media (publicity gained through promotional efforts) is the bucket that WOMM falls into.
Nielsen says that WOMM (“recommendations from people I know”) is the most trusted form of marketing, at 92%, while TV ads rank only at 47%.
But word of mouth is not WOMM. Adding the word “marketing” to word of mouth changes the definition to overt acts of trying to get consumers to recommend a product. Word of mouth is one thing; WOMM is quite another.
I think the Word of Mouth Marketing Association (WOMMA) sometimes uses the terms interchangeably. But they clearly are not the same. And this conscious, or unconscious, blurring makes the entire industry a bit suspect when it comes to the data they use in promoting the value of word of mouth marketing.
Here’s their current research data regarding (yep, you guessed it) word of mouth—sans the word marketing. I would suggest that most of this falls into the “duh” category:
• Word of mouth drives a significant portion of sales, across categories—an average of 13%.
• Two-thirds of word of mouth’s impact is from offline, one-third from online.
• Among all impacts, paid media accounts for 69%, word of mouth 21% and word of mouth amplification (in tandem with paid media) 10%.
• An offline word of mouth impression drives at least five times more sales than a paid advertising impression.
So, I get to paid media driving 69% of impact and I say, “OK, here we go again.” Paid media triggers the first move, making people aware of the product. People then try the product and some of them actually talk about their positive experience with friends and neighbors. (Data from other sources suggest that a total of 15% of your customers will be influencers.)
And that, in turn, brings us to WOMM’s objective of trying to motivate 15% of our customers into becoming influencers. That’s what word of mouth marketing is all about, after all—getting this small percentage of folks to speak on our behalf.
And how much time and money should we invest in this? WOMMA says we should make bigger investments in a wide range of word of mouth techniques (see list below).
According to the American Marketing Association, 64% of marketing executives believe word of mouth is the most effective form of marketing, but only 6% say they’ve mastered it. (Just think of the word of mouth strategies for Preparation H!)
A good WOMM campaign is not something you can just buy like an ad schedule. It’s not predictable, like target reach and frequency, and it’s not going to impact enough customers (in most cases) to make your company appreciably more successful.
It is, however, a different channel through which to market your products and the channel most likely to stimulate the consumer to action.
That list of WOMM tactics being used by companies today includes referrals, incentives and/or discounts for referrals, loyalty programs, blogs, searching for viral opportunities, looking for buzzworthy topics, a private newsletter for talkers, a tell a friend form on every page of your website, add a gift and a word of mouth tool to every sale, a private sale for talkers, excellent customer service, online forums and only developing ads worth talking about.
If you go down the road of allocating resources to a WOMM initiative, I recommend that you first track its influence on your business. And most importantly, determine if the added outlay is going to generate more return that the marketing channels you’re already investing in.
•
Dan Japhet is the principal of Strategic Media Alignment. He can be reached at sma1@japhetmedia.com.
