Word of mouth: An untapped market | CustomerGauge Word of mouth: An untapped market

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Word of mouth: An untapped market

Using the referral power of your customers or more commonly known as word of mouth marketing (WoM), is an area of marketing that is tumultuous to say the least. It is consistently labeled as “immature” in relation to other marketing mediums, which have extensive data and easily traceable cause and effect mechanisms.

However, for all the millions spent and immaculately conceived advertising and marketing strategies, consumers are becoming ever more indifferent to the marketing saturated world they live within. However some companies are waking up and are realizing that as every company is maximizing their traditional marketing, the endless to-and-fro of trying to outperform competitors with minuscule gain, is a losing battle. Word of mouth then remains a source that is largely untapped and powerful, with Nielsen finding that 92% of consumers believe recommendations from friends and family over all forms of advertising.

So what exactly is word of mouth? This article will outline three prominent forms of which word of mouth and how this plays into a consumer’s decision-making process:

  • Experiential
  • Conversational
  • Influential

Experiential

Experiential word of mouth is the strongest and most common way to produce powerful advocates for a brand. McKinsey state it accounts for 50 to 80 percent of word of mouth activity and The Keller Fay Group report that 50% of conversations triggered by experience create pass along and purchase.

Creating experiential word of mouth means a company is able to create customers who are evangelical about a product or service due to how it has met their expectations. The most classic and famous example of this is Apple. A brand that has through high quality products, continual product renewals and building buzz around products before launch, created thousands of consumers who consistently chatter about their brand.

The messages these customers project into the world are not coaxed by companies but the result of their own volition. Thus the likelihood to continually recommend and the passion with which they recommend are far greater. However, such word of mouth though is more likely to be produced when an experience differs from that expected, for when customers receive what they expected they are less likely to go out of their way to speak about it. Receiving something expected means customers will be satisfied and recommendations will still be made “passively” when a customer is queried on their experience. However the more the product positively differs from their expectations, the more they will “actively” speak about it.

Conversational

While not as powerful as experiential, it is the most common as marketing and advertising efforts can initiate word of mouth. Conversational then, is the result of consumers directly exposed to campaigns passing on the messages of those campaigns or brands.

A prime example of this is the DollarShaveClub’s video Our Blades are F***ing Awesome, in which upon it being picked up conversationally in March of 2012 it resulted in 12,000 orders in just 48 hours.

In another case, a 2012 video by Pepsi earned 10 million views within a few days. It depicts an old man “Uncle Drew,” playing basketball against a group of young men and beating each and everyone, only to reveal himself as NBA superstar Kyrie Irving. It permeated so much so into the world of basketball that to this day, you can still hear Uncle Drew’s insignia phrase “I get buckets” used all the way from kids playing basketball on the street to NBA commentators. And with each utterance that "clever and funny" campaign by Pepsi resurfaces in peoples minds.

For companies with low-innovation capabilities, giving the customer a product that goes beyond expectations to create experiences that customers actively promote is difficult. Tapping into word of mouth in this way then can be at times far more beneficial.

The reason such word of mouth works is that rather than having the message that is to be conveyed being done solely by the campaign, consumers are now promoting the campaign message. Conversational word of mouth that really works means campaigns messages are shifted from only having an effect on a single consumer (if at all), to those consumers actively passing on the campaign messages to others. The result of which is a higher reach and influence in comparison to just the campaign itself. However it can be very difficult and costly to create campaigns that really stand out and have lasting impact from the rest of the swathe of marketing that permeates a consumer’s existence.

Influential

This form of word of mouth is whereby companies intentionally identify “influentials” to become brand and product advocates; in a sense acting as marketing campaign themselves. This type of word of mouth revolves around how well marketers can find and target influentials, in order to have controlled word of mouth campaigns. For the fear amongst many is that this type of marketing is wildly unpredictable in regards to the message that will be passed on.

However, such precise targeting is not always an option for most companies and yet they understand the power that influentials still have for their brand. Red Bull unable to create one-to-one marketing skirted this dilemma by using extensive analytics to identify influentials for each of its target groups. Through well-organized events they ensure that positive messages are disseminated among consumers. A clear example of this is Red Bull’s omnipresence within the electronic music world. A world in which, they don’t just sponsor music events but actually create their own (Red Bull Music Academy), ensuring greater control over the messages that invited influentials project.

While, similar to conversational in that it requires marketing campaigns to be relayed to others, influentials (if correctly identified) have a far wider audience in comparison to those within conversational word of mouth. So, while difficult to measure and control what is conveyed to others and how much actually converts to transactions, those companies who use it successfully are able to reach large audiences through very few individuals.

What is right for me?

There are many more types of word of mouth that exist beyond those listed in this article, however these three are those that are most commonly employed and have the greatest power to result in new customers.

Which one to employ is not always clear as options available to companies differ depending on the industry, product, service and even customer.

  • Experiential is by far the most influential as the word of mouth being passed on comes from direct experience with the product; customers are not passing on campaign messages but actually how much they loved the product.
    • Passive experiential word of mouth – customer receives what is expected but it is not beyond their expectations. Customer is satisfied and will promote the product but only when questioned.
    • Active experiential word of mouth – the product must go beyond expectations for the customer to speak about the product without being prompted. A major problem for low-innovation industries.
  • Conversational and influential can reach large audiences.
  • Costing can wildly fluctuate. Some conversational word of mouth campaigns can be extremely expensive while others (DollarShaveClub) have been made on minimal budgets.
  • The certainty that conversation or influential campaigns will create word of mouth is highly unpredictable.
  • For this reason if looking to use, aim for small budget campaigns
  • Difficult to measure effect of successful conversational and influential campaigns in creating new purchases, particularly for influential word of mouth.

In light of this, first and foremost experiential word of mouth should be the primary focus for companies. For in creating products or services that customers want to rave about (although difficult) or even passively promote, a company is ensuring that what is being spoken is exactly what the company was founded on.

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