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Word of mouth can be measured (and sometimes managed)

6 min read

Brands & Campaigns

There’s a lot being written today about advocacy and the value of word of mouth. The increased interest makes sense. After all, who doesn’t want more of a commodity that’s:

  • Seemingly free
  • Accorded high credibility
  • The most trusted form of “advertising”. (Nielsen reports that 92% of people “somewhat or completely trust” recommendations from people they know. Compare this to just 47% similarly trusting TV and print, and only 36% trusting online video ads.)

But, in reality, there’s nothing free about advocacy and positive word of mouth. Effective word of mouth only comes with sound strategic planning and substantial effort. Effective word of mouth requires that marketers:

  1. Provide a high enough level of service to incent word of mouth;
  2. Operate “above and beyond expectations”to truly delight customers;
  3. Generate sharable content that is relevant, compelling and self-serving;
  4. Provide training and conduct programs to cultivate a positive corporate culture;
  5. Develop ample conversation catalysts to help facilitate customer-to-customer conversations.

and much more.

You will be asked about the ROI

If and when your organization begins committing resources against developing and measuring word of mouth, be prepared for “the ROI challenge.” It may not have happened yet in many corporations, but as the visibility of the costs related to generating that word of mouth grows, surely the demand will come from those who hold the purse strings to prove some positive ROI.

Very few businesses are structured in such a way that they can directly measure various results of their word of mouth promotions that include: awareness of their brand; purchase consideration; or number of actual purchases produced. Yes, some have established “bounties” by which existing customers are rewarded: dollars; extended services; or some other added benefits for referring friends. But these programs are limited and some have already been recognized as leaving a “mercenary taste” that undermines the program altogether.

Further, for all the hype we see and hear about the impact of social media, sources (including Wharton’s Jonah Berger, “Contagious: Why Things Catch On“) continue to confirm that only a miniscule amount of word of mouth happens online. Most takes place through private forms of communication like e-mails, text messages, and “good, low-tech” face-to-face conversations and phone calls.

So what’s a marketer to do?

All marketers, but perhaps especially those in small to mid-size businesses (those businesses which are particularly dependent on word of mouth and referrals – perhaps due to their “local-identification”) need to adopt processes for strategically generating word of mouth and then tracking the fruits of their labors.

Recognizing the challenge of quantifying word of mouth we developed a proprietary research tool. We applied it on behalf of an orthodontists’ practice. The doctors recognized that some of their new business was derived from the word of mouth of the parents of their current teenage patients. But they had no idea how much business was being sourced, or even more importantly, what was the content of the actual messages being circulated. Beyond the possibly skewed messages passed along to the doctors through their staff (“sanitized” to defend individual doctors or unnecessarily escalated based on personal biases), they really had no representative means to quantify the positive messages they could/should be leveraging, nor did they have an objective measure of the critical messages that deserved immediate attention.

50% of new business impacted by word of mouth

While the doctors’ “provincial wisdom” was that they earned a majority of their new patients through recommendations from family dentists, through use of our proprietary measurement tool, the Buzz Barometer, we found that actually 37% of their new business was being driven solely by referrals from parents! An additional 13% of new patients were being impacted by word of mouth as they sought confirmation of a dentist’s recommendation by asking about the experiences of other parents. That means word of mouth was directly accountable for half of the practice’s new patients! We also learned that 77% of parents had in fact spoken with others about either individual staffers or the practice in total. And in the case of this practice, ninety-four percent of those communications could be characterized as positive.

Additional information included: how many other parents had been communicated with; what mediums were used to communicate; whether the opinions were volunteered or requested; and much more. We also identified the two key critical, but correctable messages that needed immediate attention (after all, some word of mouth in even the best practices can be negative, and, left unaddressed can cost a practice even more new business).

Pilot program increases word Of mouth by 54%

More recently we worked with a local office of the Sylvan Learning Systems (another business highly dependent upon word of mouth and referrals). We sought not only to measure current word of mouth but to also prove that word of mouth could be managed. We randomly assigned all parents of current and recent past students to two groups (“test” and “control”). We identified six topics (from a position on how to prepare for the Common Core, to an interview with a program “graduate,” to a discussion of the value of online review sites) and wrote stories that were e-mailed to the members of the test group. For purposes of the test we compressed the distribution to a six-week period to generate results more quickly. (In an ideal situation those stories would have been spread out over a 12-week or longer period of time).  Following that communication we administered our Buzz Barometer to both the test and control groups. The results: While word of mouth originating with both groups was quite positive in tone, the test group member had communicated with friends, family, neighbors, co-workers, etc. 54% more frequently than the control group (that had not received the series of 6 e-mail stories). The test group members on average had also communicated with more individuals, and they had been 60% more likely to initiate discussion of the topic by volunteering their thoughts and opinions.

Some businesses are the perfect candidates for the stimulation of word of mouth. Others are not. But every company can measure and learn what customers are saying about it and take action. The process doesn’t need to be lengthy or expensive.

Doug Pruden and Terry Vavra are principals at (CEP) Customer Experience Partners, in Darien, Conn. The firm has developed the Buzz BarometerTM tool to help managers objectively quantify both the online and offline word-of-mouth circulating about their brand(s). The Buzz Barometer guides strategic direction based upon analysis of what customers are communicating about their experiences. CEP focuses on issues related to customer retention, growing share of wallet spending, and word-of-mouth measurement and management. Reach Doug and Terry via e-mail.