In a study organized by the Word-of-Mouth Marketing Association (WOMMA), analysts found that offline word-of-
mouth impressions drive at least 5x more sales than paid ad impressions, and up to 100x for highly planned purchases.
Further, consumer conversations drive action immediately—within 2 weeks of purchase—much closer to the purchase point than conventional media.
Together, online and offline word-of-mouth account for 13% of consumer sales, which represents $6 trillion in annual consumer spending.
“We know that a consumer recommendation is going to be a powerful contributor to brand sales, but this is the first time a rigorous study has quantified that impact across a range of product and service categories,” said WOMMA President Suzanne Fanning. “We hope this research will lead marketers to elevate the role of word of mouth, both online and offline, in their marketing plans.”
This follows a paper by Professor Wendy Moe of the University of Maryland over the summer that found a significant .8 correlation between social media listening data and brand equity metrics derived from survey questions.
As Joel Rubinson points out, the two studies together demonstrate word-of-mouth offers not just data power but also prediction power. “If the data has predictive value, it should be hired!,” he says.
Online versus offline
Those with a stake in different tactical approaches often champion either offline or online media as the best method to drive word-of-mouth. Offline is more established, yes, but online is faster growing. Both are right.
But in a contest over influence, it’s not close, it’s a rout. Keller Fay demonstrated that 9 out of 10 brand mentions are face to face rather than via social media.
A study in the Journal of Marketing Research takes this further, showing how categories vary. For example, media, cars, and technology have a larger percentage of word of mouth online. However, food, beverages, beauty, clothing, kids products, financial services and more dominate offline.
What to do
How to make word-of-mouth happen is the single most important question. It can’t be bought or flighted like traditional media.
Robbin Phillips and her colleagues wrote a book on the subject. Brains on Fire, a guide to creating powerful, meaningful, sustainable, word-of-mouth movements, argues the first lesson is to focus on people instead of tools like Facebook or Twitter.
In her blog, Phillips questions the conventional approach of using fans to spark word of mouth referrals.
“’Using’ people (or fans or advocates or ambassadors) has always been wrong in my book and will always be wrong. Period. We wrote our own definition of advocacy at Brains on Fire:
Advocacy occurs when people are INSPIRED and EMPOWERED to share their LOVE for an idea, cause, product or brand, so much so that they become a living messenger for that idea, cause, product or brand.”
A new bank called Simple personifies this approach. Focusing on people is the start. Next is realizing that “Likes” don’t lead to advocacy. Getting people to talk starts with getting people to love your brand.
Friends, not foes
Word of mouth and advertising are not opposing sides. They are on the same side. Bigger media buys yield more conversation. Word of mouth increases the reach and impact of paid advertising by 15%, according to the WOMMA study.
Social media amplification is not additive, it’s multiplicative.
Here’s a great infographic that sums up the WOMMA results in a colorful way:
Do you think word-of-mouth is a complement or an alternative to traditional media?