www.mmkta.orgWord-of-mouth communication Positive Vs. Negative WOMWOM MarketingCustomer Advocacy & EvangelismWOMM FrameworkMarketing Mix, IMC & WOMBuzz MarketingOnline Communitiesoverview

Word-of-Mouth (WOM)

www.mmkta.orgMarketing Communications b2c – traditional marketing communicationc2c – word-of-mouthc2b - feedbackCommunication

www.mmkta.orgWord of Mouth (WOM)The product information individuals transmit to other individuals. (Solomon, 2009)The act of consumers providing information to other consumers.(Word of Mouth Marketing Association WOMMA,2009)Interpersonal communication amongst consumers regarding product and service performances.(Richins, 1983) (Kaplanidou and Vogt, 2003)Personal communication about a product between target buyers and neighbours, friends, family members and associates. (Kotler & Armstrong, 2009)Definitions

www.mmkta.orgPassing it along to Family, friends, relativeseWOMCommunication patternshttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

www.mmkta.orgPeople talk about exciting products, innovative products, services, experiences, high involvement products and personal activities. People also observe and talk about the products others are using. (Kaplanidou and Vogt, 2003)Important in customers’ formation of attitudes, risk reduction, decision making(Bone, 1995) (Bansal and Voyer, 2000) (Murray, 1991)Critical for services which are intangible and experiential (Berry and Parasuraman, 1991)WOM FactsWangenheim and Bayón (2004)

www.mmkta.orgWOM is a “natural” phenomenonPeople like to talk, when something is Talk-Worthy.WOM comes with social pressure to conform.Sometimes, others’ opinions matter more than own perceptions.2/3 of all consumer-goods sales are influenced by WOM% of buyers relying on WOM for purchases69% for restaurant36% for computer hardware and software22% for travel and vacationWOM FactsSolomon (2009)

WOM is a “natural” phenomenon

People like to talk, when something is Talk-Worthy.

WOM comes with social pressure to conform.

Sometimes, others’ opinions matter more than own perceptions.

2/3 of all consumer-goods sales are influenced by WOM

www.mmkta.orgViral Infection = WOMWOM message = virusInfectious spread from hosts/ vectorsLevel of contagiousness depends on the potency/DNA of WOM-unitSome can only be transmitted in specific way“High-risk” populations (High Social Networking Potential –SNP)Some make a purchase, some don’tMessage mutates just like the virus depending on the host Viralhttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

www.mmkta.org Viralhttp://www.arisey.com/images/viral_work.jpg

http://ericsusch.com/blog/wp-content/uploads/2008/12/050905wom_n.jpg

Positive vs. Negative WOM

www.mmkta.orgRemarkablePositive ExperienceBigNegativeExperienceLoyalty+WOMSwitching-WOMPositive or NegativeCustomerAcquisition & GrowthCustomerRetentionLoss of other customers& potentialcustomersCustomerDefection

www.mmkta.orgCompany’s effortsThe Marketing MixPlaceProcessPeopleCompetitors’EffortsProductPriceCompetitors’EffortsPromotion WOM personpersonpersonpersonpersonpersonpersonpersonCompetitors’ BrandCommunityBrandCommunityPotential Customers/Non-Userspersonpersonpersonperson

www.mmkta.org Negativity Bias in WOM“Customers who have had bad experiences tell approximately 11 people about it; those with good experiences tell just 6”Hart et al. (1990, p. 153)A satisfied customer tells 8 other people.A dissatisfied one tells 20.(Fortune, 1995)Positivity Bias in Feedback Biascited in Söderlund (1998)

Word of Mouth Marketing (WOMM)Sernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)

www.mmkta.orgWord of Mouth Marketinggiving people a reason to talk about youmotivating people to talk about youmaking it easier for the conversation to take place WOMMSernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)

www.mmkta.orgWord of Mouth Marketing Start , Support, Simplify Sharing WOMMSernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)

www.mmkta.orgBenefits Third-party credibility Cost effective Relatively Easy Enhance the impact of other communication tools WOM keeps on going and going and going WOMM

Third-party credibility

Cost effective

Relatively Easy

Enhance the impact of other communication tools

WOM keeps on going and going and going

www.mmkta.orgWhy WOMM is becoming importantConsumers are in control Fragmentation of markets Growing distrust of advertising Growth of Internet and virtual communities Media fragmentation Some products/ services cannot be advertised WOMM

Consumers are in control

Fragmentation of markets

Growing distrust of advertising

Growth of Internet and virtual communities

Media fragmentation

Some products/ services cannot be advertised

www.mmkta.orgWOMM Guidelines Be talk worthy Delight the customers – Offer more Rewards and recognition Target the influencers Staff development Causes – CSR, Sponsorships Reciprocal referral (B2b context)Leverage existing social networks/ micro markets Be truthful WOMM GuidelinesSernovitz (2006) http://www.wordofmouthbook.com/free/

Be talk worthy

Delight the customers – Offer more

Rewards and recognition

Target the influencers

Staff development

Causes – CSR, Sponsorships

Reciprocal referral (B2b context)

Leverage existing social networks/ micro markets

Be truthful

Customer Advocacy & Evangelism

www.mmkta.orgHappy customers advertise for youFree of chargeCustomer Advocacy & Evangelismcited in Söderlund (1998)

www.mmkta.orgCustomer Advocacy & Evangelismhttp://localadlink5star.files.wordpress.com/2009/01/word-of-mouth.jpg

www.mmkta.orgCustomer Satisfaction, loyalty and Word-of-mouthCustomer Advocacy & EvangelismCited in Chakrabarty (2009)

www.mmkta.orgCompanyOther Key Opinion LeadersOther Key Opinion LeadersOpinion Leaders/Key InfluencersCustomer Advocacy & EvangelismOpinion seekers/ followersOpinion seekers/ followerspersonpersonpersonperson

www.mmkta.orgCustomer Advocacy & EvangelismWOMMA (2009)

www.mmkta.orgDiffusion of Innovationcited in Söderlund (1998)

www.mmkta.orgCustomer EvangelistsEvangelism in Religious context – attempting to convert people to a religionEvangelism in Marketing – trying to convert a non-user or a competitors’ customers into customers Customer Evangelists – customers who spread the words about the products they love Apple’s evangelists - Mike Boich, Guy Kawasaki Build community, share knowledge, create a cause, find the right people,Customer Advocacy & Evangelism

Evangelism in Religious context – attempting to convert people to a religion

Evangelism in Marketing – trying to convert a non-user or a competitors’ customers into customers

Customer Evangelists – customers who spread the words about the products they love

Apple’s evangelists - Mike Boich, Guy Kawasaki

Build community, share knowledge, create a cause, find the right people,

www.mmkta.orgProfit from pricepremiumProfit from referencesProfit from reducedop. costsProfit from increasedusageBase Profit1234567YearReichheldand Sasser, cited in Chakrabarty (2009)

WOMM Framework

www.mmkta.orgWOMM Planning Frame workwww.wordofmouthbook.com

www.mmkta.orgWOM Episode FrameworkWOMMAhttp://womma.org/terminology/terminology.pdf

www.mmkta.orgWho: Participants — Creator, Sender, ReceiverIndividuals whose actions make up a WOM Episode. Participants may serve multiple roles.How: ActionWhat participants do to create, pass along, or respond to a WOMUnit.What: WOMUnitA single unit of marketing-relevant information shared by a consumer.Where: VenueThe medium or physical location where the communication takes place. Objectshttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

www.mmkta.orgWhoPropensity: The likeliness of a consumer to take an action.Demographics: Descriptive data such as age, gender, location, etc.Credibility: Ability to impact the behavior or opinions of others.Reach: A Participant's potential audience size.___________________HowVelocity: The speed at which a WOMUnit movesDistribution Spread: The number of Receivers reached by a Sender.Source Diversity: The number of different Senders that send a WOMUnit to a Receiver. Qualitieshttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

www.mmkta.orgWhatTopicality: Degree that the marketing message is contained in the WOMUnit.Timeliness: Whether the WOMUnit arrives in time to be relevant to a campaign.Polarity: Whether the message content is positive or negative.Clarity: Whether the message is understood by the receiver.Depth: The aspects and/or qualities that increase persuasiveness.___________________WherePopulation: Total possible audience for a WOMUnit in a Venue.Audience: Number of Receivers that actually get the WOMUnit.Rules: Whether a WOMUnit complies with policies set by a Venue. Qualitieshttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

www.mmkta.orgConsumptionThe Receiver directly consumes the WOMUnit but takes no further action. InquiriesThe Receiver seeks more information after consuming the WOMUnit. ConversionsThe Receiver completes a desired action after consuming the WOMUnit.RelaysThe Receiver re-distributes the WOMUnitRe-creationsThe Receiver creates a new WOMUnit after consuming the WOMUnit. Outcomeshttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

www.mmkta.orgConversions (e.g., clickthroughs, trials, purchases)AdvocacyMarket ShareShifts in awareness, image, brand equities, etc.Cost per conversionQuality of AdvocacyMeasuring Performancehttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

Marketing Mix,IMC & WOM

http://blogue.us/2009/05/13/united-hearts-of-benetton/The shocker: Benetton

http://hollywooddame.com/wp-content/uploads/2009/06/calvin-klein-threesome-billboard-photo.jpgControversial Ads – Calvin KleinSoHo, Downtown Manhattan, NYC June 15 to 26, 2009

Buzz Marketing

www.mmkta.orgBuzz Marketing- A type of WOMM involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities. Blogs, chat rooms, product giveaways Companies also hire “buzz agents” to imitate real-life WOM experience - Create “unique”, “spontaneous”, “personal”, “exclusive” conversations Buzzhttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities.

Blogs, chat rooms, product giveaways

Companies also hire “buzz agents” to imitate real-life WOM experience

www.mmkta.orgBuzz MarketingVesper’s scooters in LABzzAgentHarry Potter Buzzhttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

Vesper’s scooters in LA

BzzAgent

Harry Potter

eWOM Campaign in Online CommunitiesCirque du Soleil ‘s The Beatles LoveBeatles songs and biography performed as circus musical at The Mirage in Las Vegas started in 2006 Needed to generate pre-show awareness + excitement Materials were held up due to long approval process Hired agency DEI Worldwide for an “Influencer Word-of-Mouth Campaign. Marketers engaged in conversations with people in chat-rooms and message boards provided information and collected intelligence 42% indicated intention to buyhttp://www.cirquedusoleil.com/en/shows/love/default.aspx

Beatles songs and biography performed as circus musical at The Mirage in Las Vegas started in 2006

Needed to generate pre-show awareness + excitement

Materials were held up due to long approval process

Hired agency DEI Worldwide for an “Influencer Word-of-Mouth Campaign.

Marketers engaged in conversations with people in chat-rooms and message boards

provided information and collected intelligence

42% indicated intention to buy

Viral Marketing

www.mmkta.orgViral Marketing“network-enhanced word-of-mouth.” (Jurvetson , 1997) Marketing technique that seeks to exploit pre-existing social networks to produce exponential increase in brand awareness through viral processes similar to the spread of an epidemic. Could be passive or active For active Viral, create something people want to shareHotmail to append promotional URLs to all the e-mail messages sent by the users. 12 million users signed up for Hotmail accounts in 18 months. Forwarded e-mails, internet referrals, YouTube “word-of-mouse” Viralhttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

“network-enhanced word-of-mouth.” (Jurvetson , 1997)

Marketing technique that seeks to exploit pre-existing social networks to produce exponential increase in brand awareness through viral processes similar to the spread of an epidemic.

Could be passive or active

For active Viral, create something people want to share

Hotmail to append promotional URLs to all the e-mail messages sent by the users. 12 million users signed up for Hotmail accounts in 18 months.

Forwarded e-mails, internet referrals, YouTube

“word-of-mouse”

www.mmkta.org Viralhttp://fb4wineries.files.wordpress.com/2009/06/viral_marketing1.jpg

www.mmkta.org Viralhttp://www.emtactics.com/images/viral-marketing.jpg

www.mmkta.org Viralhttp://viraltheshow.com/wp-content/uploads/2008/01/logistic-curve-viral-marketing.GIF

www.mmkta.org Viralhttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

www.mmkta.orgBurger King’s “Simsponize Me” Viralhttp://www.bk.com/en/us/campaigns/simpsonize-me.html

www.mmkta.orgBurger King’s “Simsponize Me” Viralhttp://www.bk.com/en/us/campaigns/simpsonize-me.html

Online Communities

www.mmkta.orgWord-of-mouth communication Positive Vs. Negative WOMWOM MarketingCustomer Advocacy & EvangelismWOMM FrameworkMarketing Mix, IMC & WOMBuzz MarketingOnline Communitiesoverview

www.mmkta.orgTake-Away ListDelight your customersPeople like to talk about youGive them something worthy and positive to talk aboutConsider WOM value in everything you do Find the right targetNurture passionate hard-core fans - the evangelistsFacilitate – rewardsJoin in the talk – conversation – buzz marketingTap into the social media, online communitiesMeasure Take-Away List

www.mmkta.orgReferencesKotler, P. and Armstrong, G. 2009, Principles of Marketing, 13th edn, Prentice Hall.WOMMA, 2009, Word-of-Mouth Marketing Association Website, viewed, 1 August 2009, <http://www.womma.org/>www.subservientchicken.comhttp://www.cirquedusoleil.com/en/shows/love/default.aspxwww.wordofmouthbook.comhttp://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/Wangenheim, F. and Bayón, T. 2004, ‘The effect of word of mouth on services switching: Measurement and moderating variables’, European Journal of Marketing, vol. 38, no. 9/10, pp: 1173 – 1185http://www.arisey.com/images/viral_work.jpghttp://www.bk.com/en/us/campaigns/simpsonize-me.htmlSolomon, M. 2009, Consumer Behavior, 8th edn, Prentice HallChakrabarty, A. 2009, Services Marketing: Course Notes, Nottingham University Business School

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