Word of Mouth Marketing

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Word of Mouth Marketing

  1. 1. 2011 MKTG 6226 Alessandro Bozzelli 207 241 276 [WORD OF MOUTH MARKETING] Application of WOM Theory & Examples
  2. 2. Section 1: WOM as it Applies to Marketing & Advertising If, according to the Word of Mouth Marketing Association (WOMMA), word of mouth constitutes consumers providing information to other consumers, the application of this concept would be word of mouth marketing. WOMMA defines it as the art and science of building active, mutually beneficial consumer-to-consumer and consumer-to-marketer communications. It is further defined as: giving people a reason to talk about your products and services, and making it easier for that conversation to take place. The article in the course kit by Dichter states, “Why in a time of increasing advertising volume does Word-of-Mouth (WOM) recommendation loom so high?”. Given that the article was written in 1966, although much has changed since then, it is generally accepted that recommendation through word of mouth is still the most effective form of communication to influence consumer purchasing behaviour (Boalch & Law). Dichter’s apparent dichotomy can be solved by observing that advertising has shifted over time, in an attempt to simulate and stimulate word of mouth. This endeavours to rouse emotional currency between a brand and a consumer in an attempt to build advocacy (and by association, sales). Dichter’s work, as it pertains to how WOM theory should be applied to marketing, is still very much valid and in-use today. The hyperlinks to various advertisements below are a testament to the permanence of his conjectures. It can be summarized as follows: Simulate WOM by… 1. Proving Friendship & Intention by… a. Initiating an ‘Exclusive’ Group – Chivas Commercial b. Conveying a Personal Experience 2. Proving an Authentic Relationship to the Product by… a. Tracing ‘Company Myth’ – Jack Daniels Commercial b. Describing the Organization Climate – Smuckers Commercial c. Utilizing Consumer Testimonials – ProActiv Commercial The success of the message, according to Dichter, rests solely on the reader’s, listener’s, or viewer’s belief that the speaker is talking spontaneously and that he has not been called in as a hired hand. Stimulate WOM by… 1. Turning Messages into ‘Topics of Talk’ by.. a. Creating Shock – Axe Commercial b. Creating a sense of “Heightened Reality” – Greygoose Commercial c. Creating Humour – Dos Equis Commercial d. Linking your products with needs and trends of the time. – Scotiabank Commercial e. Creating Feelings of Exclusivity – Wiser’s Commercial 1|Page
  3. 3. If a brand can simulate a level of trust with the consumer and intertwine it with a “take-away” that people can talk about and propagate, it has the potential to reap the benefits of WOM. But how does social media fit into the picture? Section 2: Then and Now: What has changed? More recently, three key factors have changed the way marketers use WOM, thrusting it into the limelight and making it more relevant than it has ever been. This is not to say that Dichter’s message no longer applies, just that the environment within which his conjectures operate has significantly changed. The three factors (Boalch & Law) are: Marketing Saturation As more and more messages flood the advertising environment, consumers tune out and reaching them is getting more and more difficult. Cialdini estimates that the average person is subject to more than 1500 advertising messages a day, a number which desensitizes consumers to messages. WOM can cut through the clutter by providing non-commercial, interactive, conversational environments. Consumer Scepticism Consumers are much more sceptical now (then in 1966) about advertising messages, especially “one- way” brand communication. This has created a desire for more honest relationships between brands, where honesty is exalted and dishonesty magnified. WOM, if used appropriately can help overcome consumer scepticism. Consumer Connectivity Most importantly, and most relevant to social media, consumers are connecting like never before. Whereas previously consumers were essentially dictated a message, now, with the introduction of various social media, consumers are forming opinions and delivering recommendations constantly and instantly. This happens through blogs, video blogs, social networking websites and forums, among other mediums. Figure 1: The Change in Communication Patterns (Boalch & Law) Research shows that although 80% of WOM takes place offline, 75% of it is now triggered through initial online conversations, mostly in the social media space (Balter & Butman). 63% of people consider 2|Page
  4. 4. reviews and product comparisons to be as credible as expert reviews from independent third parties (Balter & Butman). It is the job of the company to foster an environment that gives people a reason and a playground to talk about its’ products and services, in effect facilitating a conversation. With the proliferation of new and ever changing social media sites, combined with their constantly increasing adoption rates and interconnectedness, messages move through the world at amazing speeds such that either the success or failure of a campaign can be felt immediately in the farthest reaches of the ‘connected’ world. Figure 2 uses Australia as an example to show how ‘connected’ countries are becoming. Figure 2: The Reach of Social Media in Australia (Boalch & Law) As Boalch and Law state, there has been a shift of power from the brand to the consumer, where the brand has been relegated from dictator to facilitator. 3|Page
  5. 5. Figure 3: The Power Shift (Boalch & Law) To observe the speed and ease through which WOM is occurring, all one has to do is log onto Facebook. Within 30 seconds of logging on, and without doing any research whatsoever, scanning only the “News Feed”, evidence of word of mouth marketing was clearly present (See Figure 4). Figure 4: Facebook as a WOM Facilitator The important conclusion to draw from the changing landscape is that brands must listen to consumers in the new online social media environments. They must interact with them and provide ways for them to converse about brands. When brands decide to use social media, they must actually listen to the consumers. An example of this going wrong can be seen with the iPhone 4 launch and the “Antennagate Scandal”. Shortly after being released, consumers found that the antenna of the phone, if held in a certain way, completely eliminated reception. When they started blogging about it on the official Apple website, Apple shut down the forum and removed all of the postings, instead of listening and responding to the consumers. Of course, this prompted individuals to move to other websites and media to voice their displeasure, and the whole incident became much more damaging to the brand than it would have been had Apple listened and responded appropriately to customers’ concerns. Section 3: WOMM Short Case Study – Leveraging Social Media If WOMM is based on giving people a reason to talk about your products and services, and making it easier for that conversation to take place (WOMMA), then, in the current environment, social media must be leveraged. 4|Page
  6. 6. An example of one of the earliest uses of Social Media for Word of Mouth Marketing can be found in the campaign launched in 2008 by Wiser’s Whisky entitled, “The Wiserhood: The Society of Uncompromising Gentlemen”. The campaign started off with a series of six television advertisements that alluded to the fact that those who drink Wiser’s form part of an exclusive club. These commercials utilize Dichter’s “Simulate & Stimulate” mantra for transferring WOM Theory to advertising. This was followed up by the launching of the “Wiserhood Moments” Facebook page where individuals can view the commercials (linked via YouTube), add comments, photos, and have discussions. It continues to be viewed today. This was later expanded to Twitter, where users were invited to use the hastag #wiserhood. Even this method continues to thrive as the most recent tweet, posted one day ago, reads: Consumers clearly appreciate the effort that went into creating the campaign as they are utilizing various social media and each page has been very active. This campaign can be summarized by two comments on the YouTube channel: “God I love these commercials!” and “F&^$in classic!”. Conclusion Moving forward, it is clear that Dichter’s application of WOM Theory is very applicable from the 1960s to this day. Changes in the communicatory environment caused by the proliferation of social media have changed the way that information is shared and therefore companies must adapt by maintaining multiple channels of multi-party, two-way communication that fosters conversation online, through social media, as well as offline. 5|Page
  7. 7. Works Cited Balter, Dave and Butman, John. Grapevine, the new art of word of mouth marketing. 2006, p 19. Boalch, Zoe, and Nick Law. Understanding Word of Mouth Marketing. Sydney: Contagious Communications, 2008. Online. Cialdini, Robert B. Influence, Science and Practive,2000. Dichter, Ernest. “How Word-of-Mouth Advertising Works”, Harvard Business Review, 44 (November/December 1966), 147-166. 6|Page

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