Word of Mouth Marketing

Word-of-mouth marketing(WOMM,WOM marketing), also calledword of mouth advertising, is an unpaid form of promotionoral or written in which satisfied customers tell other people how much they like a business, product, service, or event. -Wikipedia

WOMM Contd..
Advantages : - Free - Cuts through noise quickly - Effective : 20 to 50 percent of all the purchasing decisions Influence : Greatest when consumers are buying a product for the first time Or when products are relatively expensive, factors that tend to make people conduct more research, seek more opinions, and deliberate longer than they otherwise would. one-to-many basis: product reviews are posted online and opinions disseminated through social networks.

Word of Mouth Marketing

Impact :
Not only positive(recommendation) but it can be the most disruptive factor as well (Dissuasion)- It can increase the market share by 10 percent or even reduce it by 20 percent over a 2 year time period (all other things being same)

Three forms of Word of Mouth : 1. Experiential : most common and powerful form
accounts for 50 to 80 percent of word-of-mouth activity e.g : airlines lose luggage are a classic example of experiential word of mouth

2. Consequential :

spread through the marketing activities occurs when consumers directly exposed to traditional marketing campaigns Learning for marketers : consider both direct and pass-on effects of it

3.

A less common form of word of mouth e.g : when marketers use celebrity endorsements to trigger positive buzz for product launches.

Intentional :

Word of Mouth Equity

an index of a brands power to generate messages that influence the consumers decision to purchase. 2 types of word-of-mouth that change behavior : 1. Recommendation : 2 kinds : a) by trusted friends/ relatives b) by strangers research shows that a high-impact recommendationfrom a trusted friend conveying a relevant message, for exampleis up to 50 times more likely to trigger a purchase than is a low-impact recommendation.
2. Dissuasion

To assess the impact of the recommendation , we can calculate the WOM equity : It represents the average sales impact of a brand message multiplied by the number of word-of-mouth messages.

Dimensions of WOM
1. What is said primary driver of WOM impact . the content MUST address the product/ service features which have WOM potential. E.g in mobile phone category , design is more important than battery life 2. Who says it identity of the person who sends the message - About 8 to 10 percent of consumers are what we call influentials, whose common factor is trust and competence. - Influentials typically generate three times more word-ofmouth messages than noninfluentials do, and each message has four times more impact on a recipients purchasing decision -About 1 percent of these people are digital influentialsmost notably, bloggerswith disproportionate power. 3. Where it is said - environmentwhere word of mouth circulates

WOMM contd.
Word-of-mouth equity EMPOWERS companies by allowing them to understand word of mouths relative impact on brand and product performance.

APPLEs iPhone in Germany

share of word-of-mouth volume was about 10 percent, or a third less than that of the market leader Yet the iPhone buzz was about five times more powerful than average Implication => meant the iPhones word-of-mouth equity score was 30 percent higher than that of the market leader, with three times more influential recommending the iPhone over leading handsets. sales directly attributable to the positive WOM outstrippedApples paid marketing sixfold Within 24 months of launch, the iPhone was selling almost one million units a year in Germany.

RESULT :

UNDERSTANDING :

Harnessing Word of mouth

Rewards are huge, yet many avoid it. Concerns
immature as a marketing discipline difficult to draw on extensive data or elaborate marketing tools fine-tuned over decades.

The potential upside is exponentially greater Word of mouth equity analysis

detail the precise nature of a categorys influentials pinpoint the highest-impact messages, contexts and networks.

Insights + forms of word of mouth(exponential, consequential and intentional) = positive word of mouth

Providing customers with an opportunity to share positive experiences and make the story relatable and relevant to the audience.
Involving customers during product development Buzz can also be sustained after launch. Eg. Appstore

Harnessing experiential word of mouth

To create an impactful positive word of mouth, customer experience must deviate from expectations and on dimensions that a consumer is likely to talk about. Eg battery

Managing consequential word of life for a mobile-handset consumer mouth

Involves using the insights provided by word-of-mouth equity to maximize the return on marketing activities. Marketing induced C2C word of mouth generates more than twice the sales of paid advertising in categories as diverse as skincare and mobile phones. Two things supercharge creation of positive word of mouth Interactivity Phil Collins Gorilla Drummer Cadbury Ad (Dairy Milk).mp4 Creativity

Intentional word of mouth

Identifying influentials who become brand and product advocates Ambitious marketers use word-of-mouth equity insights to shift from consequential to intentional campaigning. Most effective for marketers capable of undertaking One-to-one marketing
Leads to exponential word-of-mouth; impact similar to ripple effect

Red Bull - used celebrities and other opinion makers to seed the right message, through events.

Conclusion
Marketers have always been aware of the effect of word of mouth. Word-of-mouth equity helps reveal how to hone and deploy that art These insights are essential to harness the potential of word of mouth and to realize higher ROI

THANK YOU