Consumer as Chief Marketing Officer

WOM

Word of mouth (WOM) has always influenced consumer decision-making. Receiving the personal advice, recommendations, and suggestions of friends, family, and acquaintances before making a purchase is both reassuring and validating.

Need a new camera? Ask the brother-in-law that’s a shutter bug.  A new car? Dad always has sound advice about automobiles.  Great restaurant? A foodie friend is the go-to expert.

Emerging media has expanded word of mouth influence to include the objective and subjective opinions of ANYONE choosing to share their experiences electronically – hence the term, eWOM.  Reading multiple five-star reviews, contributed by strangers across the globe, is now as likely to influence that camera purchase as a brother-in-law’s recommendation. If poor ratings in review sites such as Yelp or Urbanspoon contradict a friend’s restaurant suggestion, reservations will likely be made elsewhere.

Social networking has completely transformed how consumers interact with a brand.  What people have to say about a brand is now as important as whatever the brand has to say about itself. Consumers, en masse, are eager to share the role of Chief Marketing Officer. Of course, this challenges corporate traditions. The comfort zone of a top-down, tightly controlled commercial communication model is now outdated; businesses need to adopt open, equal, interactive dialogues within online brand communities.

A new research study quantifies the influence of word of mouth marketing (both WOM and eWOM combined):

  • 10 – 54% of the marketing impact for a brand is delivered through word of mouth, suggesting this is a key element of the consumer decision-making journey.
  • Word of mouth can drive nearly as much organic search as traditional marketing activities on their own, when marketing activities are also present.
  • A 10% increase in word of mouth resulted in sales lift of 0.2% – 1.5%.

Both WOM and eWOM, play a significant role in the consumer decision journey, acting as an amplifier of all marketing activities. Marketers need to account for the pathways through which word of mouth plays an intermediary step in the journey between marketing exposure and financial results. Analyzing the overall impact on marketing will help determine optimal budget allocations.

The speed of diffusion. reach, persistence and interactivity of eWOM is both intimidating and challenging to manage operationally. Companies have less control over WOM and eWOM strategies, as the way communication spreads among consumers is more random than in advertising. Authentic, responsive and transparent communication with consumers is vital. Creating a strong brand community through regular communications inspires loyalty and motivates satisfied customers to defend a brand against negative eWOM. The tone and language used in communications must be personal and relatable emulating a real online conversation. Responding to unsatisfied customers demonstrates responsiveness and limits the potential for further dissemination of negative reviews as a form of consumer revenge.

The following corporate responses from the Mandarin Oriental, San Francisco on Trip Advisor and Nike Support on Facebook, demonstrate responsiveness to eWOM in a brand-appropriate voice:

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There is no room for smoke and mirrors in today’s socially net-worked world. Corporations can connect directly, in near real-time, with customers whether locally, nationally or internationally, building and enhancing customer relationships.

In 2013 and beyond, word-of-mouth marketing is not just “nice to have,” but is a game-changing element of today’s marketing mix.

4 thoughts on “Consumer as Chief Marketing Officer

  1. I was in a salon last week and a salesman came in looking for the salon owner. He was a digital mobile marketer who had a way for salon owners and restauranters to control and manage their eWOM.

    He was selling a digital platform that allowed the salon stylist to ask the customer if they would be willing to fill out a customer survey at the end of their visit. If the customer agrees, the stylist can hand the customer an ipad where they complete a short survey about their experience that day. If the feedback is positive, the customer is given the option to send their feedback to Yelp, Google+, or any number of platforms as chosen by the salon. If the feedback is negative, a screen appears that says, “We’re sorry. Let us make this right.” A salon manager is informed of the feedback immediately and then has the ability to intervene and make the customer happy before they leave the salon and tell ten friends.

    As a marketer, I thought it was a brilliant idea. I imagine there will be more companies who come up with platforms like this to manage their eWOM. There’s too much potential losses not to.

    • That is an incredible idea. It’s the persistence and reach of negative eWOM that is so challenging. On public review sites everyone, everywhere can read it and it never goes away! Nipping negative reviews in the bud, at a time when service issues can be fixed, makes good business sense.

  2. I completely agree about eWOM and WOM.

    Whenever my husband and I are looking for a great restaurant- we turn to Yelp. If a restaurant receives negative remarks from the consumer, we are less likely to go there.

    A prime example of this is my dentist. I go to North Potomac Smiles, 45 minutes away from when I live. My friend recommended the place to me, since I was looking for a dentist. I looked them up on Yelp- and they had a 5 out of 5 rating. Without hesitation, I scheduled my first appointment.

    4 years later, I am still going there. It takes me about 45 minutes to get there from where I live, but its totally worth it for the friendly and prompt service that I receive. They are kind, gentle, and are always asking the patient if they are comfortable.

    A first impression is a lasting impression. You never know who will talk about your business (in a negative or positive way).

    • I’m sure there are many medical professionals who are scrambling to figure out how to manage eWOM – marketing is not their core competency after all.

      I also search for reassuring online reviews before seeking medical attention. I actually don’t mind if there is no eWOM, but I take negative eWOM seriously when it come to my health care. And, yes, like you, I would willingly drive 45 minutes for a friendly, gentle dental experience.

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