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This new article just published by the Marketing Science Institute explores how two dimensions of innovation—originality and usefulness—affect consumer word-of-mouth and, hence, the adoption of a new product.
By Sarit Moldovan, Jacob Goldenberg, and Amitava Chattopadhyay
According to the latest Internet statistics from eMarketer, there were 32 million moms online in 2005 accounting for approximately one-third of all female US online users. Pew Internet & American Life Project (2006) estimates that parents go online 20% more than adults without children do. Also, women with children younger than 18 years of age are more likely to use the Internet than other US online adults.
Moms aren't just surfing the Internet for parenting topics. According to eMarketer, moms visit more auction, game and sports web sites then parenting Web sites. Moms believe technology is most valuable when it helps them make the most of their time. Moms make time to use the Internet because they believe it makes their lives easier and helps them get things done efficiently.
Marketers are currently reaching this demographic through social networking and word of mouth (i.e. eopinions.com) Web sites. Burson-Marsteller's mom-fluentials study (2006) also points to social networking and gaming sites among online moms' preferred destinations. This brings us back to the basics of women's communication patterns: they seek relationships and they want to connect. They do not want just to download information; they expect to be engaged. For moms, the Web is not just a time-saving tool; it's an extension of their peer-to-peer networks.
(this is not exactly about a research project, but rather a few thoughts on Paul Rand's hypotheses on why WOM has become such a hot topic. I imagine this may be a good project, however. I'd be happy to hear from others who may want to explore this topic).
At WOMBAT, Paul Rand from Ketchum talked about a truly interesting concept: why are we suddenly so interested in Word of Mouth? We all understand that WOM has been around forever (my boss has a clever Bible quote that recommends WOM, actually) and have always recognized its importance to marketers. But why now? Why are there conferences and papers and studies and this blog?
Paul had some excellent thoughts on it. I'm going to quote from the WOMBAT Blog:
Paul, explained that the vision of WOMMA as being all about empowering the consumer, putting an end to invasive advertising and having a two way dialog with consumers that is listened to regardless of whether we like what they say. He explained that because of technology the days when marketers could put out a bad product or service and sell it before people discovered that it was bad are gone. In todays world for marketers, "there is nowhere to run or nowhere to hide."
True that. But it still leaves us thinking "why now"? I think there are 2 particular events--or rather companies--that made the last 3 years perfect for the rise of WOM: Google and Enron.
Google, first. Google is one of the most valuable companies in the world, and it was built entirely upon WOM. Google has famously spent not a dime on consumer advertising (they've done significant B2B advertising). This very public case study has not only given the markets hope for the Internet economy, but demonstrated that there is, in fact, a different way to build a company. Everyone wants a little Google magic, and it makes sense that marketers want to try to emulate their success.
Enron. I don't mean to pick on this particular company, but for some reason their story seems to resonate the strongest among the early 2000s corporate scandals. Remember when Time Magazine declared the Whistleblower the "Person of the Year"? It was clear that the public had a significant amount of frustration and distrust of companies, their officers and their public statements.
The advertising industry is the interface between companies and the public. Ad agencies, being essentially good people (no, really!) sought a way to mediate this break in trust. WOM very clearly serves that purpose. Since it puts (as Paul says) the power of communication back onto the consumers, it feels like a way to ensure that we don't get Enroned again.
Consultants often do a Root Cause assesment. That is, rather than focus on a problem/situation, they try to work backward to understand the underlying issues and conditions that brought about the situation. Understand the reasons behind the emergence of WOM should help us to do a few things: make sure that this interest isn't just a trend, and try to build upon its success. This is a good time to do this, as WOM (and WOMMA) are entering their sophmore years. The practice is growing and changing. Let's make sure that we remember how we got here in the first place.
Something has been bothering me lately about all of this WOM research that touts the power and impact associated with the phenomenon. Before I go any further, I should clarify that I certainly think WOM is a significant force in the marketplace, due mostly to its inherent credibility, but also its reach, timing, personalization/relevance and social utility. That said, when I hear that WOM influences X% of all purchases, or that X% of consumers report WOM as being one of the best sources information or that X% of WOM happens through email, (etc) I wonder, how did they measure this? I question the validity of the numbers when I learn, more often than not, that the researchers simply asked consumers via some sort of survey format.
Directionally, the numbers and trends generally seem reasonable. What I am advocating here is that: (a) we consider the methodology when we interpret and use this type of data; and (b) we seek to develop and use other methods to measure WOM propensities and impact.
Most researchers should know that consumers often cannot tell us what they think, what they do or why they do things, since non-conscious processing guides MOST of what we do. Add to this complication the fact that consumers often tell us what they want us to believe or what they think we want to hear. Think about it: if someone asked you, which medium has a bigger impact on your purchase decisions, advertising or your friends?, wouldn’t you automatically say the latter, since everyone knows that advertising is biased and often misleading? Yet - I am sure that traditional advertising does influence many purchase decisions...
Several years ago I conducted ten 2 ½ hour one-on-one interviews with consumers regarding their WOM behaviors, using the ZMET technique. At the beginning of each interview, I asked, please tell me your thoughts and feelings about sharing information regarding products and services with other people. Ten out of ten of the interviewees started with the assurance that they share information because they want to help their family and friends. After some time (30 seconds for one young woman, 1 ½ hrs later for another), they ALL admitted – with some conviction, that there are many other reasons for generating WOM, beyond altruism – for example power and ego enhancement (“it makes me feel like a cool cat”), reciprocity (“I wonder what tidbit I will get in return”), etc.
Clearly, if I had used a survey instead of these indepth interviews, my conclusions would have been very different--perhaps even wrong.
80 percent of entrepreneurs in the UK rate WOM as the best way to attract new customers. Yet the same number say they are neglecting WOM referrals and not pursuing them. This seemingly ironic finding is from a recent study by the Quantum Organization, which also found:
* Nearly 75% of new sales come as a direct result of WOM.
* Most businesses are getting only 20% of the referrals they should be getting.
Source: Quantum Organization
As online communities make it easy for customers to have a voice, customers become more connected with the sponsoring company, trust the company more, and recommend the company's products to more people. Those are the key findings from a recent community membership study from Communispace.
Other key findings include:
* 76% of respondents felt more positively about the sponsoring company since joining its community
* 52% were more inclined to purchase the company's products
* 82% were more likely to recommend the company's products
* 75% felt more respect for the company
* 63% trusted the company more
Source: Communispace, "What Companies Gain from Listening: The Effect of Community Membership on Members' Attitudes and Behavior in Relation to the Sponsoring Company"
Read the excerpted research report (PDF download)
Which song will be the next big hit? The songs people think others will like. This was indicated in a recent study from the National Science Foundation, the McDonnell Foundation, and Legg Mason Funds and published in the journal Science.
The study involved and divided young people two groups:
* In the socially-influence groups, once some songs began to be downloaded, others would try out those songs too.
* In the independent group, with no guidance from others, each person had to make his own decision. Some songs proved more popular than others, but not always the same ones that became popular in other groups.
Source: Science, "Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market"
Dissatisfied consumers will not engage in negative WOM behavior if the retailer stands behind the product and there is a sense that it is working toward improving customer satisfaction. That was a key finding from a 1993 study published in the Journal of Retailing. Consumers in the following cases are less likely to perceive that justice had been served; hence they are more likely to engage in negative WOM behavior:
* Dissatisfied consumers who perceived little likelihood of successful redress
* Consumers who were dissatisfied with products they felt were important
* Consumers who perceived the cause to be stable or controllable
Source: Advances in Consumer Research, "Word-of-Mouth Communications: A Motivational Analysis", Winter 1993
A new global study by GfK Roper Consulting reveals that people are considered to be the most “trustworthy” source for consumer information.
Around 70% of consumers across the world trust friends, family or other people when searching for information or ideas on products to buy. Advertising is ranked second (59%), editorial third (55%) and online resources fourth (18%).
In contrast, US citizens put people first (81%), editorial second (56%), advertising third (55%) and online fourth (24%).
Christopher Carfi, who blogs over at The Social Customer Manifesto, has a really interesting post on this notion of Familiar Strangers and Pogressive Trust. The concept is fascinating and has some real clear ties to WOMM, especially online. Here's the description that Carfi passes on:
Familiar Strangers are individuals that we regularly observe but do not interact with. By definition a Familiar Stranger (1) must be observed, (2) repeatedly, and (3) without any interaction. The claim is that the relationship we have with these Familiar Strangers is indeed a real relationship in which both parties agree to mutually ignore each other, without any implications of hostility. A good example is a person that one sees on the subway every morning. If that person fails to appear, we notice.
Progressive Trust is a concept tied to Familiar Strangers: people slowly build trust based on direct experience with a person. I imagine that Familiar Strangers are somehow given a bit of a head-start when/if a conversation actually happens. This would be based on identification: this person has a similar life to mine (ie rides the same subway everyday).
As conversations proliferate, and marketers are tasked with sorting out the reliable from the non, these are the sorts of metrics that are going to be necessary. The weighting of comments is crucial to making sure that proper attention is paid to issues, partially dependent upon their source.
I was thinking about Sundaram et al.'s 1998 motivational analysis of WOM-- an investigation of offline communication-- and I wondered whether the same principles apply to online WOM. One might argue that the valence of the WOM does not operate by similar motivational principles in online communities, as more fundamental motives, namely, the need to belong and need for mastery play such overarching roles. If anything, this calls for more empirical work, challenging both the methodology and the hypotheses of this research. But rather than criticize, or even review the paper, I would rather propose some hypotheses and support some ideas that Gary Stein put forth on the importance of WOM with respect to the evolution of cooperation (need to belong).
A rich body of literature exists in social psychology regarding the social sharing of emotions-- or more specifically, how people naturally talk, or avoid talking about emotional events (c.f. Rime, 1987; Pennebaker, 1997). In order to apply these findings to our research on WOM, one must operationalize an emotional event as an idiosyncratic concept. Importantly, emotional events are treated flexibly in the psychological literature (i.e. personal events = by definition emotional), and I don't think it a far cry for a market researcher to consider a product-relevant communication 'emotional'.
Some of the main findings that have come out of this body of research touch on the health benefits of sharing emotional events (e.g. getting jobs faster, reduced physician visits, achieving better grades). More recent research has investigated HOW these benefits come to be-- brace yourselves WOM researchers-- it is in creating and sharing the narratives of various events that benefits are realized. That is, the creation and dissemination of WOM per se, is a meaningful process. More importantly, research has shown that a precise linguistic style reliably predicts the benefits. That is, over time, as a person shares an emotional event, the use of causal (because, reason) and insight (understand, realize) words, and a balance of BOTH positive (happy, laugh) and negative (sad, angry) emotion words is strongly associated with improved health.
I think this is an important body of literature to consider in our work as we talk about why consumers generate media, the motivations and the repercussions-- for the consumers, and our clients. What does the use of the above algorithm of language predict for a client-- possibly satisfaction? I'm constantly amazed in my research at the balance of positive and negative sharing that occurs in online communities; I've often thought that that balance is necessary to earn respect from one's online peers (to show your authenticity/ lack of blind loyalty to a given product). To return to what got me thinking along these lines, I do not think the motivations underlying the sharing of positive and negative word of mouth are so clear cut, and moreover, mutually exclusive in online WOM. I think they are both similarly motivated and perhaps serve similar outcomes: the need to belong, and the need for mastery. Thoughts?
I was recently asked via e-mail about the connection between WOM and the youth demographic and if I had any insights from my academic research in this area. The specific questions were as follows: does WOM travel differently among youth? Does technology acceptance impact connections? Are there more conversations happening online vs. live for youth? Are their networks wider, deeper or have no difference to the average 40 year old? Are there different categories of discussions?
Below is my response to this inquiry...
***
Thanks for your e-mail. The data I have that might be relevant to you is from WOM marketing agents* only. I have data from non-agent college students (aged 18-24) but not data from other non-agent age groups so I couldn't make comparative claims among non-agents.
Among WOM agents, however, below is what I can say. Please note that these findings should not be generalized to non-agents since there might be a "homogenizing" effect, meaning the fact that the people volunteer to participate in organized word-of-mouth marketing programs may make make them more similar to one another than any similarities that might exist among different age groups in the general population. At the same time, though, this data does include "everyday" conversations as well as "institutional" or campaign-related interactions. It should also be noted that the agent sample among 13-17 year olds is more likely to be female (66%) than male (34%).
- For communication medium: Face-to-face is consistently high across all age groups (nearly 80%) with no significant differences. Phone is the next most frequent medium, but interestingly it's more prevalent for those in their 50s and 60s. The only significant difference for youths is that teens, 13-17, are more likely to engage in WOM episodes via instant messaging than other age groups. But even among teens the overwhelming majority of reported WOM episodes were in offline settings (either F2F or phone).
- How WOM travels: I don't have social network-based data to determine this. There is a small but interesting difference, though, in terms of recommendations. For example, WOM episodes among 13-17 years olds are less likely to include a specific recommendation (36% DON'T include one) while 27% of the conversations among 18-59 year olds do not include a recommendation. This isn't a big difference but it might suggest that 13-17 year olds are more likely to "just" talk positively or negatively about brands without making a specific recommendation. Further 13-17 year olds are more likely to rate the conversational quality as less personal than other age groups (which also makes sense where teens might not consider their conversations as personal or intimate as other age groups might).
- Technology acceptance impact connections?: No data on this. But I can say that about 10% of the conversations surrounding brand-related interactions and recommendations are about "Science/Technology" (and most of this is computers, software, and websites).
- Networks wider or deeper?: Again, I don't have social network-based data but I do have data about the number of people that people report talking to during a day. 13-17 year olds reported the highest number of people talked to -- 27.4 -- versus 18.35 (18-29), 17.2 (30-39), 18.71 (40-49), and 19.1 (50-59). Also 13-17 year olds were more likely to report on WOM episodes with friends and best friends rather than other relationships types (this shouldn't be terribly surprising, though, since many teens don't have co-worker relationships or they may have fewer interactions with romantic partners or spouses than other age groups).
- Different categories of discussions: 13-17 year olds were more likely to talk about "Arts/Entertainment" than other age groups (when we look closer these conversations are dominated by movies, music, and fashion/culture -- again, hardly a surprising finding). Specifically, 21% of the conversations were about these topics for 13-17 year olds versus 15% for 18-29, 9% for 30-39, 11% for 40-49, and 8% for 50-59.
- Locations: The only significant difference in terms of where WOM episodes occur is that 13-17 years olds have more WOM episodes at school and less at work than other age groups. Yet again, this is not very surprising!
- Number of interactions, number of WOM episodes, or percentage of conversations that include a WOM episode: There are no statistically signficant differences based on age regarding the number of conversations people had, the number of those that were positive or negative discussions about brands, or the percentage of the total conversations that were brand-related. This is quite interesting and I wonder if this is part of the homogenizing effect due to the respondents all being affiliated with a word-of-mouth marketing company (we'd definitely want to get a nationally representative sample of non-agents to see if this applies to the general population). But it's also interesting because 13-17 year olds reported talking to more people than other age groups. So how can teens have a similar number of interactions but also report talking to more people? Well, the number of people present in conversations among 13-17 year olds was higher than in other age groups. So, even though teens may have a similar number of interactions throughout the day, they still may talk to more people because there are more people present in their interactions.
I hope this helps!
***
* Data reported in this entry is from an academic-industry collaboration between Northeastern University and BzzAgent, Inc.
As some of you that may have already read it, an interesting and provocative article about the value of Consumer Generated Media Research posted recently at Marketing Profs (Is there something rotten in CGM Research?), rather than posting my personal point of view, I figured that the topic will surely interest WOM researchers and WOM advocates to provide evidence and insights about the value of CGM research... This blog is already full of supporting evidence of its value and importance, you may want to share your ideas and facts to defend "consumers natural conversations" as useful and strong sources of insights.
In case you are interested in what I personally think about the topic.
I had lunch the other day with a friend who started an online rating website for home renovations, building, maintenance, etc. She told me that a significant majority of the reviews on the website are overwhelmingly positive, and she was frustrated by this for a few reasons...
Academic research supports my friend's observation: It seems that a majority of online reviews are very positive. She also has reason to be frustrated by this. For example, when there is little variance in reviews, they are less helpful to consumers in making their decisions. Research also indicates that negative reviews are more influential in consumers' purchase decisions.
As a marketing manager -- or researcher -- there are some important questions that need to be answered here:
1. Stephen Levitt, the author of Freakonomics estimates that 1 in 1000 book readers will post a review at Amazon.com. What distinguishes these 1/1000 from the other 999/1000?
2. Is the proportion of pos vs neg reviews ~equal to the proportion of satisfied versus dissatisfied consumers with that product?
3. If not - why not? What is encouraging consumers who are satisfied (for example) to talk more so than those who are dissatisfied?
4. Since negative reviews are more "helpful" to consumers, how can we encourage more negative reviews?
- should we "reward" negative reviews? (here is an example of a firm rewarding reviews in general)
- should we encourage "amateur critics" and explicitly ask for more negative reviews?
- should we tell prospective reviewers that negative reviews are more helpful?
5. Do sites that ask consumers to rate the REVIEW and rate the REVIEWER (such as amazon) have more negative reviews?
I am interested to hear your observations, experiences, and research regarding the above.
(PS - Yes, these links do represent some Canadian content. But I doubt there is much difference between Canadian versus American WOM. I suppose that is another research question...)
What are some of the emotional motivations for consumers to engage in positive or negative WOM? In a 1998 study published in Advances in Consumer Research entitled "Word-of-Mouth Communications: A Motivational Analysis", consumers were found to conduct positive WOM for altruistic and self-enhancement reasons. Those who engaged in negative WOM listed anxiety reduction and vengeance as primary emotional motivations.
Other key findings included:
* 60% of positive WOM resulted from satisfying product performance and employee-consumer contact experiences
* 58% of the negative WOM resulted from inadequate responses to product problems
Source: Advances in Consumer Research, "Word-of-Mouth Communications: A Motivational Analysis"
One way to get started in word of mouth is to listen to what your customers are already saying about you. But according to the April 2006 Select & Connect survey conducted by the CMO Council, implementation of formal customer feedback programs have lagged. The study found:
* Nearly three-quarters of respondents did not control and run a customer advisory board or council. Only 6% deemed it "very critical" in product co-innovation.
* Nearly 75% did not manage and interact with a formal online community of users or buyers.
* Over two-thirds did not have a formal customer WOM program in place.
Source: CMO Council, Select & Connect survey
New drugs with even limited amounts of buzz before FDA approval tend to experience an enormous increase in online discussions once approved. That is the key finding of a May 2006 report on WOM in the pharmaceutical industry from Nielsen BuzzMetrics.
Specifically, new drugs with 2% to 15% of online buzz for six months prior to PDA approval saw discussion levels of 15% to 20% afterward. Those without pre-approval buzz received less post-approval discussion interest and the discussion dropped off quickly.
Source: Lydia Worthington, Nielsen BuzzMetrics, "Pre-Launch Drug Buzz: How Preliminary Buzz Impacts Post-Launch Discussion Among Drug Products' Target Audiences"
Get the report (PDF download)
When a consumer hears about a negative shopping experience from a friend, it is likely to prevent them from setting foot in that store altogether. The Customer Dissatisfaction Study conducted by the Verde Group and Baker Retailing Initiative at Wharton found that negative WOM influences future patronage up to five times more than the person who experiences the problem first-hand.
Other key findings include:
* 31% of consumers tell one or more friends about the problems they experience in a store.
* On average, consumers tell four other people about their negative shopping experience.
* Almost 50% of shoppers said they avoided a particular store in the past because of someone else's negative experience.
Source: Verde Group and Baker Retailing Initiative at Wharton, "Customer Dissatisfaction Study"
Get the report (PDF download)
Rob Braun of Masstricht University is looking for some help to complete his thesis regarding WOM in offline and online environments and its influence on consumer attitudes. He has prepared a short questionnaire and will share the results with WOMMA once completed.
The questionnaire can be found here: http://www.lynck.nl/q.htm
Great new report out today from (my alma mater) Jupiter Research on Word of Mouth practices. Brand new Ad Analyst Emily Riley found that large companies generally lag behind small companies when it comes to WOM, both in terms of doing it and measuring it.
I believe this is a result of specialization within big companies (otherwise known as silos). In small companies, often the people who work on the product are the exact same ones who market and sell it. Everyone is closely connected to the thing-being-sold. In larger companies, that structure becomes nearly impossible, and you begin to get specialists: someone does manufacturing, someone does sourcing and someone does marketing.
The result is that a) few people have a complete image in their heads of what the company does and b) groups actually responsible for connecting with customers are in departments distinct from the rest of the company.
The biggest take-away I get from the Jupiter report is that WOM is a cultural issue, more than anything else. If a company of any size can find a way to connect everyone not only to the thing-being-sold, but also to the people buying it, they will begin to win at WOM. Things like blogs begin to make a lot more sense if there is this Culture of Connection.
Back when I was at Jupiter, we did some research on the composition of search engine results pages (SERPs to the cool kids) for the most valuable brands. The result was that just over 25% of the results on the first page were consumer generated. Pretty powerful, especially when you consider the range of opinions that can show up in CGM.
ComScore has a report out talking about the most searched vs. the most purchased cell phones online. Ends up that trendy cellphones get the most searches. But the most purchased? The low-end ones, the ones generally given away for free.
That certainly makes sense: people seek out informatiomn on products that are unique or interesting. The basic products don't really require very much discussion at all. It's one more bit of evidence that says word of mouth happens around products that have evolved past commodity status.
Cymfony and Porter Novelli are conducting a research survey on blogging best practices -- and you're invited to participate. If you maintain your company blog or monitor other blogs for your company, you definitely need to be a part of this. If you don't have direct responsibility at your company, feel free to forward the link below to the person who does.
As a special benefit for WOMMA members, Cymfony will deliver a customized version of the survey results along with a special analysis from CMO Jim Nail.
Don't wait -- the survey is only open for a short time.
Word of mouth is more effective than advertising for spreading information about a product, even if the ties between participants are weak. That's the key finding in the study "Talk of the Network: A Complex Systems Look at the Underlying Process of Word-of-Mouth" by Jacob Goldenberg, Barak Libai, and Eitan Muller. While advertising can be effective beyond an early stage of the growth cycle of the new product, the study found that its influence quickly diminishes.
Other findings include:
* The effect of strong ties diminishes as personal network size decreases. When personal networks are small, weak ties were found to have a stronger impact on information dissemination than strong ties.
* The influence of weak ties is at least as strong as the influence of strong ties. Their effect approximates or exceeds that of strong ties, in all stages of the product life cycle.
Source: Marketing Letters, "Talk of the Network: A Complex Systems Look at the Underlying Process of Word-of-Mouth" by Jacob Goldenberg, Barak Libai, and Eitan Muller
While men make more daily contacts than women, women are more likely to engage in WOM activities, according to a new study from Lucid Marketing entitled "U.S. Adults: Word of Mouth Communications". The key findings include:
* Men contact more people per day than women (41 versus 34).
* Women were more likely to share a positive experience with a business (91% versus 83%), or a product (95% versus 89%).
* Women tend to prefer verbal communications (37% versus 33%), whereas men tend to prefer email (37% versus 33%).
* Women are more likely to visit a message board or chat room daily (16% versus 13%).
Source: Lucid Marketing, "U.S. Adults: Word of Mouth Communications"
Viral marketing is the most popular tactic that email marketers plan to implement to grow their lists in the next twelve months. This is the key finding of Silverpop's 2006 E-mail List Growth Survey. Marketers believe it has great potential and thus will continue to experiment with it.
* 24% of email marketers planned to implement a viral marketing campaign.
* 10% reported viral marketing had already been successful in the past.
Source: Silverpop, "2006 E-Mail List Growth Survey"
Almost one-quarter (24%) of theater-goers in the Washington, D.C. area said word of mouth from friends and acquaintances was their main source of theater information. Those were the key findings of the League of Washington Theatres study "Washington Audiences: 2000 and Beyond". At the time the survey was conducted in 2000, it was billed as the largest theater audience survey ever undertaken outside of New York.
The study also offers a snapshot in time of an era before the Internet changed how individuals got their local news. Although there are no newer numbers to compare and contrast, 30% of the study's participants indicated they got their theater information from the Washington Post. A mere 5% said they looked to the Internet for their information.
Source: League of Washington Theatres, "Washington Audiences: 2000 and Beyond"
The debate regarding PWOM vs NWOM (see comments from Gary Stein, Pete Blackshaw, and Walter Carl ) is one that has emplored me for years, and others for decades. What follows here is some of what others have contributed to the debate, a few of my thoughts, and some of what I too wonder about.
Before we enter the debate, as a WOM researcher or manager, it is important to first determine precisely what it is that we are comparing -- the "unit of analysis," if you will. For example, is it impact of PWOM vs NWOM or is it prevalence of PWOM vs NWOM that you care about? Both are important. Regarding impact, it makes sense that consumers may weigh and recall negative information more heavily than positive, although this is not always the case. Consider yourself buying a new car... you would probably pay more attention to warnings from friends regarding which cars to avoid, as opposed to recommendations regarding which cars to buy. On the other hand, it is conceivable that a strong positive recommendation from a good friend to buy a house in a certain neighborhood may have more bearing than a warning from just about anyone else... Regarding prevalence, the proportion of positive (satisfying) versus negative (dissatisfying) consumption experiences is certainly relevant in determining PWOM vs NWOM propensities, as highlighted by the Verde Group. Of course, this is also likely to vary by product category. For example, consumers may have fewer dissatisfying consumption experiences with their shampoos than they do with the DVDs that they rent.
A few comments and studies regarding the PREVALENCE debate:
In my conversations with others regarding WOM, one "fact" invariably comes up: "Research has shown" that when consumers are miffed, they blab to 10 people, whereas when they are delighted, they might tell one other person. Where did this phantom statistic come from? I did some digging and found that independent research conducted by TARP for Coca-Cola in 1981 concluded that "on average, twice as many people are told about a bad experience than are told about a good experience." Since then, popular press and trade articles have generalized and exaggerated this claim about the propensity for dissatisfied consumers to talk, and vaguely credit the statistics to "research has shown."
Here is how academics weigh in ... Research on gossip and rumors has noted a negativity bias, where negative rumors (e.g. fear and aggression-based) far outweighed positive rumors ("pipedreams") (Rosnow 1988). Note that this could conceivably be because people believe negative rumors are more important (impactful) and therefore they spread them more (prevalence). In a study that considers only dissatisfied consumers, it was concluded that as the severity of the problem increases, so too does NWOM (Richins 1983 JM). This seems sensible. In another study that I find particularly compelling, the researcher demonstrated "an asymmetrical u-shaped relationship between satisfaction and WOM" (Anderson 1998), where extremely satisfied or extremely dissatisfied consumers engage in more WOM than moderately satisfied consumers, and this relationship is exaggerated for dissatisfied consumers. This one makes sense to me: why would consumers bother talking about something that is neutral? Give consumers some credit - they are only going to talk about your product if it is newsworthy.
However, several other studies contradict the above findings and demonstrate the prevalence of PWOM across many other product categories, including coffee (Holmes & Lett 1977), car dealerships (Swan & Oliver 1988), television shows (Godes & Mayzlin 2004) and books (Chevalier & Mayzlin 2005). The Keller Faye Group concludes that PWOM outweighs NWOM by a ratio of 6:1!
So where does this leave us? I wonder why and how it is that such inconsistencies exist. A few ideas:
1. Inter-category differences may explain some of the inconsistencies. For example, it has been suggested that higher involvement product categories may have higher ratios of NWOM to PWOM (Richins 1983). That said, the TARP Coca-Cola research yielded similar results for both high and low involvement products and other research has demonstrated that in the high involvement automobile category, WOM increases with satisfaction (Swan and Oliver 1989).
2. Differences between consumers may also account for the inconsistent results. For example, age and expertise may effect people's propensities to generate PWOM vs NWOM. Even the medium across which they talk (online, face-to-face, over the phone, etc) may impact people's WOM behaviors.
3. Different levels of specificity and definitions regarding WOM itself may account for these contradictions. For example, the constructs "PWOM" and "NWOM" are quite different from "WOM following a satisfying experience" and "WOM following a dissatisfying experience." The former refers to any positive or negative consumer-to-consumer conversations regarding a product or service. The latter is more specific, since it is limited to conversations regarding one's past consumption experiences.
4. The proportion of satisfying versus dissatisfying consumption experiences (as stated above) will have a significant impact on the proportion of PWOM vs NWOM. The proportion of satisfying vs dissatisfying experiences may also vary by category, by type of consumer... what else?
It seems I have asked more questions than I have answered here. I suppose that is the point? Let's keep this conversation going...
Influential is the most frequently repeated term in public opinion research to refer to those key audience members who synthesize messages and spread them to their networks, shaping their peers' views. In a never-ending quest to find smarter marketing solutions to target the influencers and to get news/messages out, clients and colleagues are starting to dig deeper. They are asking: Who influences the influencers? Is there a way to reach this particular group that houses information and is trusted by those who sell ideas in networks?
At the WOMMA research council we largely focused on the influencers and those who echo the influencers' messages. Perhaps future thought pieces should take a two-tier approach; looking at the influencers and their trusted sources.
This approach is especially relevant when marketing to women. Burson-Marsteller's surveys show that powerful women who trust their knowledge and intuition still go back to their own mothers for advice on parenting, motherhood and brand choices. Besides continually reviewing new products and services, they carry on their mothers' traditions and remain loyal to their mothers' brand choices as well.
These trends are fortified by research findings I saw in the June 2006 edition of MTW (Marketing to Women) newsletter. Six in 10 (64 percent) of women talk to their mothers at least weekly and 41 percent indicate without hesitation that their mothers are their best friends.
Some food for thought, when it comes to segmenting. There is value in drawing influencer maps.
Just wanted to point out a discussion going on over at Walter Carl's blog. Dr. Carl's original post was on the balance between positive and negative WOM online (vs. off). CGM Guru Pete Blackshaw chimed in and the discussion is one of the most valuable ones I've seen.
I've got a comment in there as well; I'll let that stand as my commentary, so that discussions happen in one place. But this is a thread worth exploring.
Really interesting that Idil just posted about the importance of knowing who influence "influencers", I was about to post about the importance of involving the right consumers at the right time in the "innovation diffusion". So I decided to slightly reformat my post to provide a contribution to Idil's question.
In 1962, in his comprehensive book Diffusion of Innovation, Everett Rogers defines diffusion as the process by which an innovation is communicated through certain channels over time among the members of a social system. Typically, in Rogers' terms the influentials or opinion leaders are the ones that make the product really takes off, entering in the diffusion of innovation right after "innovative consumers" (usually refered as "Innovators" and/or "Early Adopters"). These innovative consumers are the ones that buy first, they may not be specifically inventive or creative, but they like "new stuff" and may introduce them to more influencials or opinion leaders consumers that spread the word to the mass! Recent data confims that influencers are not the same as innovative consumers, across 27 product categories, results show that about half of influentials consumers may be "innovators" as well. As Rogers' groundbreaking research suggests, it therefore becomes all about involving the right people at the right time. To this end, although influencers are key to spreading the word, identifying and involving innovators to influence "influencers" is certainly a good avenue to investigate.
Here's a philosophical question for a Monday afternoon: why does word of mouth exist?
Human behaviors all evolve from some kind of need. They begin to be dressed up into various forms and traditions, but--at their core--they simply enable people to better deal with and succeed in their environment. So what's up with WOM? What does that do?
I think it stems from the human need to cooperate, which is based on the understanding that group survival is intertwined with (and therefore as important as) self-survival. It makes sense for one caveman to tell another caveman that a certain plant will make him sick; maybe one day, he'll return the favor.
So its with interest that I read this article in Panda's Thumb about the evolution of cooperation, which describes a computer modeling experiment which sought a better understandingo of cooperation.
The research is totally fascinating. I'll let you digest it all, but it outlines a number of distinct cooperating strategies, all of which are dependent on an individuals needs and (this is critical) group affiliation.
The potentials for WOM(M) are pretty remarkable. It's possible for us to begin thinking about consumer segmentation not only in terms of demo or psycho graphics, but potentially WOM-ographics. That is, sepcifcally trying to understand the conditions under which a particular person will share information about products.
The title of my post today may sound a bit off topic, given the WOM research/metrics focus of the WOMMA blog, but still I think it may partly explain why WOM is so powerful. Let me explain...
WOM is all about people, and this is why it works so well. Whereas, marketing, in the past, has been all about the "4Ps": Product, Price, Promotion, Pipeline ... putting the 5th "P" last, or even sometimes forgetting too quickly about it: PEOPLE!
WOM is helping put people back at the center of marketing strategy, not that marketers did not speak about "customer centric marketing", but until recently there was not yet any "people" focused metric that shows strong impact on sales. The Net Promoter Score, NPS, came along, it is working, and helps WOM...and research! Indeed, at a time where listening to consumers and co-creating with them is essential, marketers are in search of better ways to connect with their customers, and they seem to not always find the most appropriate answers using traditional research methods.
I believe research usually relies too much on "asking questions" rather than really listening, and even when "listening" marketers tend to overuse focus groups - they work well in some occasions, but I believe they are inappropriate most of the time. Why? Because they are artificial, unreal (I compare them to aquariums) and not really able to picture real people or real conversations! The ClueTrain manifesto told us that markets are conversations, and indeed they are; look at the impact of WOM on business. Along these lines, I strongly think that the rising importance of WOM is giving a wonderful opportunity to "research" to reinvent itself, by being closer to people, and by helping brands really drive homeruns.
Still, researchers need to get back to basics, spend quality time with real consumers, listening and understanding their problems and day to day challenges to be able to better talk about what people really care about. Look at the growing importance of ethnography for example (have a look for example at Grant Mc McGracken Excellent Blog) and its adoption by companies such as P&G.
So although WOM may not reinvent research per se, it reminds researchers to get back to basics, customer listening, consideration, respect, and recognition. The ones that do it right and collaborate with consumers, specifically influential consumers, do get paid back 100 fold. People feel respected, understood, listened to, and, in return, spread positive WOM and drive sales. In fact, at a time when research needs to be more accountable, WOM is a wonderful opportunity for researchers to get a seat in the boardroom. In turn, Word of Mouth Marketing needs "good research" ; research that listens and learns - both the ideas and the words that make things "talkable" and "buzzable".
So, brands, people talk about you, the average American has about 56 conversations around brands weekly (source: Keller Fay Group) and 80 to 90% of these conversations happen offline (source: Keller Fay Group & GFK NOP). So, stop talking, listen, learn and leverage what consumers say to drive homeruns both for you ... and them!
Marketing is about exchange, no?
What do you think?
Author: Laurent Flores
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