Word of Mouth Marketing: 20 Shocking Facts about WOMM

Here are Twenty solid facts about Word of Mouth Marketing (WOMM) collected from well reputed research journals, research institutes/organizations, work done by Marketing Gurus; that can help you a lot in understanding its significance in present day market plus you can also apply insights gained from these facts, utilizing WOMM to the benefit of your business, brand.

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According to numerous researches, significance and influence of WOMM on customers purchase intention, purchase decisions is well documented (1), objective, scientific thus neglecting its use in your business would be utter foolishness (if I may say).

Now before we get to the facts I think it’s reasonable to define WOMM, so here is one definition by Westbrook (1987) : ‘‘Informal communication directed toward other consumers about the ownership, usage, or characteristics of particular goods and services and/or their sellers’’ (2)

Now if that one sounds too old to you or you need an easy one, then here is how Entrepreneur.com  defines it : “An unpaid form of promotion in which satisfied customers tell other people how much they like a business, product or service .” (3)

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And here is eWOMM or electronic Word of Mouth Marketing definition: “Any positive or negative statement made by potential, actual or former customers about a product or company, which is made available to a multitude of people and institutions via the internet” (4).

20 Shocking Facts about Word of Mouth Marketing

WOMM & Purchasing Decisions (Fact # 1)

According to a research, WOMM is the main reason behind 20-50% purchase decisions and 10% increase in WOMM increases sales by 1.5%. (5)

And I guess, another good reason to consider WOMM for your brand!, right?!

Word of Mouth Marketing & Services (Fact # 2)

“Customer WOM is extremely important in the case of services because they imply a greater perceived risk than do goods. Services lack the opportunity of observation and trial before a purchase and thus involve a greater risk of making a wrong buying decision. Encountering this increased risk and uncertainty associated with services, consumers seek advice from trustworthy sources before adopting a service (6).”

I guess that sums it up completely, now you know why you need WOMM when you are dealing in intangible items…

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Word of Mouth Marketing & Consumer Interest, Advertising Clutter (Fact # 3)

Due to rapid and constant increase in advertising clutter, availability of product information at different mediums (radio, tv, internet etc), sources, modern consumers are less interested in traditional advertising (7) (8)

And WOMM is a better alternative in such situation, I mean if traditional advertising is ineffective then what else you are left with beside WOMM? Yes! You can say being creative in your advertising can help you in getting consumer interest, but again creativity is a rare resource, not every business can afford it.

Now WOMM doesn’t mean asking your customers to talk about you, your business, your products/services etc you know that right? You have to actually satisfy them (100%) to get them doing WOMM for your brand.

WOMM & Customer Trust (Fact # 4)

According to Nielsen research, conducted worldwide, the most trusted form of advertising (online) from consumers’ perspective is consumer eWOMM (online reviews/blogs/social networking sites/discussion forums etc) (9).

So when are you going to talk about your brand with some good cool bloggers, people having immense influence online hmm... No wonder eWOMM is increasing excessively with each passing day (10). So don't just think about it, act!

eWOMM & Customer Trust (Fact # 5)

Research shows 70 percent of internet users trust eWOMM (11). That is a really huge number and if you are one of those online businesses then you really need to focus on eWOMM, I would say, just focus only on eWOMM when it comes to marketing your product/service, it is beyond sufficient.

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eWOMM & Purchase Decisions (Fact # 6)

Research conducted by DEI worldwide shows that around 79% potential consumers search information about products, services, companies on social media platforms and 49% out of that 79% used that information to make purchase decisions (12).

Again when are you going to pay or hire few bloggers to spread the word ? Are you thinking about it now ? Well in next two hours you need to act, come on, you are missing good number of customers!

eWOMM VS Marketers (Fact # 7)

According to a research, consumers who search for product/service/brand/company information online, considers consumer provided eWOMM more valuable, reliable than information provided by marketers (13).

That means people are way too smart, that means you need to be really careful in doing eWOMM online for your brand... don't let your cover blown or outsource, talk to the online influencers, people with great online presence, credibility and see if they and your brand can work together... 

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Word of Mouth & Sales (Fact # 8)

According to Nielsen, 92% of consumers believe recommendations from friends and family over all forms of advertising (14).

Because friends don’t have personal interest in recommending a particular product, brand and thus their recommendation are perceived more credible (15).

Remember that is 92% and considering that, you need to think of ways, how to spread word about your brand via your potential customers friends/family... there must be a way!!

Negative Word of Mouth Marketing Intensity (Fact # 9)

Research at Harvard has shown, a customer having negative experience with a brand tells about it to 10 or more people (16).
Indeed a good way to ruin your business.

Service Recovery, Customer Satisfaction & WOMM (Fact # 10)

Research shows traditional service recovery strategies don’t improve customer satisfaction or minimize negative word of mouth adequately (17). 

So what you need to do..!

hint: be empathetic, consider things from customer angle, have a customer focus, see what he/she feasibly require etc not what you should do, avoid company SOP's, policies for a while if you really want to retain that customer .

Once you do it that way, I can assure you of positive word of mouth from that customer.

Negative WOMM VS Positive WOMM (Fact # 11)

One research shows that compared to positive WOMM, negative word of mouth can have strong influence on customers brand evaluation (18) while other research suggests that negative word of mouth can only have strong influence if it is coming from a credible source (19)(20).

Well that means, whenever there is some Credible Source doing NWOMM, buy that source (wink!)

Customer Complaints & WOMM (Fact # 12)

Research shows that successful resolution of customer’s complaints results in positive word of mouth, increased customer loyalty (21)(22).

So here is one way you can increase customer loyalty and get your customers to do positive WOMM for you.

eWOMM (Fact # 13)

eWOM or word of mouth through internet can also influence sales immensely; research shows that around 70% of internet users trust eWOM (23).

Again When Are YOU GOING ONLINE ?!!!

Branding & E-Word of Mouth Marketing (Fact # 14)

Research shows eWOMM can achieve branding objectives (24) (25), that means if you need to brand or re-brand your business, all you need to do is to focus on influencers who have great influence in the online world, make them happy and they will make you happy!

And if you can't make the influencers happy then find the group of people who get influenced easily and consequently they will influence rest of those who get influenced easily and voila! You will be on the cusp of new social epidemic!

Usage Imagery & Word of Mouth (Fact # 15)

Well according to a research if you are one of those businesses that seems to have problem of Usage Imagery (when to use a brand(product/service), context ?, situation ?) then WOMM is one way to fix that problem (26).

Relationship between Customer Loyalty & WOMM (Fact # 16)

Do you know a key component of customer loyalty? Well it is WOMM, so next time you want to increase your customers’ loyalty, then focus on getting WOMM from them, the more the WOMM the more loyal they will be and vice versa (27).
  

Satisfaction & Word of Mouth Frequency (Fact # 17)

Research shows that in case of extreme customer satisfaction WOM occurs more frequently (28). That’s it, if you want to have increase in WOMM in specific market segment, specific location, then in that case you need to chalk out a strategy that will deliver extreme satisfaction to the consumers in that specific market segment or location.

And if you want a specific customer to be extremely satisfied then look for the WOMM from his end, if WOMM is intense that would mean you are doing great job and vice versa.

WOMM & Film Industry (Fact # 18)

Research shows, Movie performance at box office is significantly influenced by WOMM (29) and if there is risk of negative WOMM or negative WOMM is already in play, distributors minimize negative WOMM by releasing the movie at maximum locations possible (30). 

Okay this one is not related to your business unless you deal in "Movies", maybe one of your friend do, so why not enlighten em about this one ?

Successful Relationship Marketing & WOMM (Fact # 19)

WOMM is one among many indicators (other indicators are increase in sales, loyalty) that suggest that your Relationship Marketing efforts are successful.

So next time you want to know if your relationship marketing efforts are paying off, keep check on WOMM, increase in sales, customer loyalty (31).

Brand Saboteur & Negative Word of Mouth (Fact # 20)

If you thought negative word of mouth was something that only your dissatisfied customers would do, well think again, there is actually a specific kind of employee that consider doing it his/her only duty!, yes! "Employee", identified as “Brand Saboteur” (from Inds Typology).

Here is how Researcher Ind describes the Brand Saboteur “working actively against the brand idea”. Saboteurs spread negative word of mouth, and are often contingent, lower paid workers, who feel like “second class citizens, excluded from the mainstream of the organization” (32).

We all know these guys… right?! The “Big Bad Apples”!

Now if you guys want to add something that I missed, let me know! (winks!)

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References:

1.       East, R., Hammond, K., Lomax, W., 2008. Measuring the impact of positive and negative word of mouth on brand purchase probability. International Journal of Research in Marketing 25 (3), 215–224.

2.       Westbrook, R.A., 1987. Product/consumption-based affective responses and postpurchase processes. Journal of Marketing Research 24 (3), 258–270.

3.       http://www.entrepreneur.com/encyclopedia/word-of-mouth-advertising

4.       Hennig-Thurau, T., Gwinner, K.P., Walsh, G. and Gremler, D.D. (2004), “Electronic word-of-mouth via consumer-opinion platforms: what motivates consumers to articulate themselves on the internet”, Journal of Interactive Marketing, Vol. 18 No. 1, pp. 38-52.

5.       http://www.forbes.com/sites/mckinsey/2014/02/14/can-a-goldfish-show-you-how-to-excite-your-customers/

6.       Impact of service pricing on referral behavior Christian Barrot, Jan U. Becker and Jannik Meyners Ku¨ hne Logistics University, Hamburg, Germany.

7.       MacInnis, Deborah J., Christine Moorman, and Bernard J. Jaworski (1991), "Enhancing and Measuring Consumers Motivation, Opportunity, and Ability to Process Brand Information From Ads," Journal of Marketing, 4 (October), 32-53.

8.       McDonnell, F. (2005), “Integrating word of mouth marketing”, paper presented at the International Word-of-mouth Marketing Conference, 6-7 October, Hamburg, in Andres, N. (Ed.), Proceedings of the 1st International Word-of-Mouth Marketing Conference, Brand Science Institute, Hamburg, Germany.

9.       Nielsen Research

10.    Riegner, C., 2007. Word of mouth on the web: the impact of Web 2.0 on consumer purchase decisions. Journal of Advertising Research 47 (4), 436–447.

11.    Accenture (2010), “Global consumer survey: ‘Social media . . . dramatically accelerating the exchange of customer opinions’”, available at: www.accenture.com (accessed 20 November 2011).

12.    DEI Worldwide (2008), “Engaging consumers online: the impact of social media on purchasing behavior”, available at: http://deiworldwide.com/files/DEIStudy-Engaging%20ConsumersOnline-Summary.pdf (accessed 6 April 2011).

13.    Greene, M. (2009), “Justifying social marketing spending”, Forrester Report, available at: http:// a964.g.akamaitech.net/7/964/714/d8ab5e007929d7/www.forrester.com/imagesV2/uplmisc/ justifyingsocialmarketing.pdf (accessed June, 4, 2011).

14.    Nielsen Research

15.    Silverman, G. (1997), ‘‘How to harness the awesome power of word of mouth’’,Direct Marketing, Vol. 60 No. 7, pp. 32-7.

16.    Harvard Business Review, “Stop Trying to Delight Your Customers” by Matthew Dixon, Karen Freeman, and Nicholas Toman, July 2010.

17.    Dewitt, T. and Brady, M.K. (2003), “Rethinking service recovery strategies: the effect of rapport on consumer responses to service failure”, Journal of Service Research, Vol. 6 No. 2, pp. 193-207.

18.    Kahneman, D. and Tversky, A. (1979), “Prospect theory: an analysis of decision under risk”, Econometrica, Vol. 47 No. 2, pp. 263-91.

19.    Oliver, R.L. (1997), Satisfaction: A Behavioral Perspective on the Consumer, McGraw-Hill, New York, NY.

20.    Richins, M.L. (1983a), “Negative word-of-mouth by dissatisfied consumers: a pilot study”, Journal of Marketing, Vol. 47 No. 1, pp. 68-78.

21.    Blodgett, J.G. and Anderson, R.D. (2000), “A Bayesian network model of the consumer complaint process”, Journal of Service Research, Vol. 2 No. 4, pp. 321-38.

22.    Shields, P.O. (2006), “Customer correspondence: corporate responses and customer reactions”, Marketing Management Journal, Vol. 16 No. 2, pp. 155-70.

23.    Accenture (2010), “Global consumer survey: ‘Social media... dramatically accelerating the exchange of customer opinions’”, available at: www.accenture.com (accessed 20 November 2011)

24.    Vargo, S.L. and Lusch, R.F. (2004), “Evolving to a new dominant logic for marketing”, Journal of Marketing, Vol. 68 No. 1, pp. 1-17.

25.    Branding in fictional and virtual Environments Introducing a new conceptual domain and research agenda Laurent Muzellec ESSCA Ecole de Management, LUNAM Universite´, Boulogne-Billancourt, France Theodore Lynn Leadership, Innovation and Knowledge (LInK) Research Centre, Dublin City University Business School, Dublin, Ireland, and Mary Lambkin UCD Michael Smurfit Graduate Business School, University College Dublin, Dublin, Ireland

26.    Keller, K.L. (1998), Strategic Brand Management: Building, Measuring and Managing Brand Equity, Prentice Hall, Englewood Cliffs, NJ.

27.    Zeithaml, V.A., Leonard, L.B. and Parasuraman, A. (1996), “The behavioral consequences of service quality”, Journal of Marketing, Vol. 60, April, pp. 31-46.

28.    Anderson, E.W. (1998), “Customer satisfaction and word of mouth”, Journal of Service Research, Vol. 1 No. 1, pp. 5-17.

29.    Elberse, A. and Eliashberg, J. (2003), “Demand and supply dynamics for sequentially released products in international markets: the case of motion pictures”, Marketing Science, Vol. 22 No. 3, pp. 329-54.

30.    Moul, C.C. and Shugan, S.M. (2005), “Theatrical release and the launching of motion pictures”, in Moul, C.C. (Ed.), A Concise Handbook of Movie Industry Economics, Cambridge University Press, New York, NY, pp. 80-137.

31.    Exploring relationship marketing in membership associations Nathan A. Vincent and Cynthia M. Webster Department of Marketing and Management, Macquarie University, Sydney, Australia

32.   Ind, N. (2004), Living the Brand: How to Transform Every Member of Your Organization into a Brand Ambassador, 2nd ed., Kogan Page, London.