Everybody's talking: How to harness word of mouth marketing

By Neil Davey, editor

Word of mouth marketing and customer advocacy have got a lot of people talking in recent years. Studies by the likes of the London School of Economics have found that word of mouth advocacy is a statistically significant predictor of annual sales growth. And this has generated no little excitement in marketing departments around the globe. Nurturing and harnessing this powerful medium has therefore become a growing imperative. As a board member of the Word of Mouth Marketing Association, and VP of word of mouth marketing firm Bazaarvoice.com, few are more aware of the surge in interest in this field than Sam Decker.

“When we talk about customer advocacy we are talking about the fact that there is a small percentage of your customer base that is your most loyal and influential,” he emphasises. “In the book The Influentials, Ed Keller wrote that approximately 15 percent of customers are what you would call ‘the influentials’ – those people predisposed to share their opinion about your product or company. The importance of that is that in today’s market information flows more freely – there is much more communication because of the web and because of connections made online through social networking, ratings and reviews and so on. So if you combine that with the fact that customers are seeking out opinions because they don’t trust marketing as much any more, then the influentials become more influential than ever before.”

"Customers are seeking out opinions because they don’t trust marketing as much any more and so 'the influentials' are becoming more influential than ever before." Sam Decker, board member, Word of Mouth Marketing Association

Underscoring this sea change in consumer opinion, are a raft of study results. Forrester research revealed that 77 percent of online shoppers seek out ratings and reviews when making a purchase. Whilst Edelman found that trust in ‘a person like me’ has tripled in only two years, from 20 percent to 68 percent. “You have people seeking out this content, trusting what others are saying and there are more tools for people to share their opinions,” says Decker. “So there are a lot of things working together.”

This trend has not been lost on big business. An increasing number of major brands are now putting ratings and reviews on their sites, similar to those that have long featured on Amazon.com. A recent study by shop.org found that 43 percent of major US online retailers now boast ratings/reviews, compared to less than 25 percent only a year ago. “The fact that these large brands have accepted this and decided to make this part of their strategy underscores the importance of the evolution of corporations’ marketing strategies,” Decker adds.

Word of mouth secrets

This raises several questions for forward-thinking businesses. Chiefly, firms want to know how to capture and engage the influential 15 percent of their customers. But they also want to know how to leverage them and then amplify them. So can Decker share any secrets to driving word of mouth?

“Certain companies have great word of mouth – Apple, Harley Davidson, USAA and Costco, for example,” he highlights. “They are obviously doing things right. But in terms of getting advocacy, you have to work more upstream. A lot of people approach word of mouth and then execute these viral one-time marketing campaigns to create buzz. That is OK for awareness building. But it doesn’t drive long lasting customer advocacy. Because of the transparency in today’s market, the marketing department now has to work more upstream and improve their product and service and make themselves competitive. And from that, once you create great products and service and provide great customer service from the inside-out, then the marketing assets of word of mouth are yours to have and you can use that and amplify it.”

Amplifying word of mouth – where marketers launch campaigns to encourage or accelerate word of mouth in existing or new communities – can be driven through a variety of practices. Such methods include: the creation of communities or the development of other tools that enable people to share their opinions; the identification of influential individuals and communities; the motivation of advocates to actively promote products/services and providing them with information for them to share; and the use of advertising and publicity to start conversations and create a buzz.

However, if there is no word of mouth being generated by your customers in the first place, then there will be nothing to amplify. “If you spend all of your time focusing on amplifying, then you are not going back to improve your products and widening your pool of word of mouth,” stresses Decker. “There is always a balance needed along with improving your products and service so that the pool of word of mouth that you have to work with gets larger. And the competitive advantage is obviously the size of that pool and the different strategies that you execute to amplify it.”

Bottom of a learning curve

Other challenges also litter the path for those that choose to pursue a customer advocacy strategy – not least for the chief marketing officers. “CMOs are challenged because they know that word of mouth drives the business but they must also measure and prove the impact of everything they do, and word of mouth strategies are notoriously difficult to measure,” continues Decker. “It takes some time for word of mouth to organically grow. As such, although there is tremendous momentum from word of mouth and it has exploded over the last couple of years, I don’t think that the number of companies who are actively operationalising it in their company is high enough.”

Nevertheless, this looks set to change. Companies such as Harley Davidson and Apple have carved out reputations for being masters at creating word of mouth. But with the proliferation of social networking and the growing consumer appetite for customer ratings and reviews, it is inevitable that a rising number of companies will be looking to exploit these trends for their firm’s benefit. As with any new strategy, however, businesses could find themselves at the bottom of a learning curve.

“Whenever you have the kind of growth that word of mouth is experiencing, you will have a multitude of strategies and options and ultimately what comes out of that are the tools, techniques and strategies that have staying power,” Decker concludes. “We saw this with direct mail. In the 50s and 60s direct mail really started to take off and it became very mature and a core stable to any direct marketer’s strategy. I think word of mouth will be that as well. But there is going to be a narrowing of which strategies drive the highest ROI. And that is why, with a lot of the things you do online so highly measurable, focusing online first of all is a good initial step for firms to take.”

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