There is a “perfect storm” building out there and it is called Word-of-Mouth Marketing. While most marketers shun the idea of Word-of-Mouth as a legitimate and measurable form of marketing, the advent of social media and the tools behind it are changing that world rapidly.
McKinsey and Company, an internationally recognized strategy and management consulting firm, talked about “word-of-mouth equity” in their article, “A New Way to Measure Word-of-Mouth Marketing“, and how it is something companies should be taking more note of than they are today. While we have been saying this for years, McKinsey is looking to put some more metrics around this so that it has more legitimacy in the market. What I find very interesting is that it might just take the likes of a McKinsey to create enough “buzz” about word-of-mouth to actually get through to the top executives of most corporations.
Whether you are a small, middle-market or Fortune 100 company, Word-of-Mouth is still the most powerful form of marketing – it just isn’t accepted as such – YET. Today it is far easier to measure “clicks” from a traditional marketing campaign than to build the internal processes, systems, and measurements for word-of-mouth. And the ad agencies haven’t supported it because it could potentially cannibalize their revenue streams from traditional advertising.
Let me share a few quotes from the McKinsey article, just to illustrate some key points.
- “Indeed, word of mouth1 is the primary factor behind 20 to 50 percent of all purchasing decisions.”
- “…what we call “word-of-mouth equity”—an index of a brand’s power to generate messages that influence the consumer’s decision to purchase.”
- “This tectonic power shift toward consumers reflects the way people now make purchasing decisions.”
- “It’s also the most disruptive factor. Word of mouth can prompt a consumer to consider a brand or product in a way that incremental advertising spending simply cannot.”
- “The second critical driver is the identity of the person who sends a message: the word-of-mouth receiver must trust the sender and believe that he or she really knows the product or service in question.”
- “While marketers have always known that the impact can be significant, they may be surprised to learn just how powerful it really is.”
- “Marketers have always been aware of the effect of word of mouth, and there is clearly an art to effective word-of-mouth campaigning. Yet the science behind word-of-mouth equity helps reveal how to hone and deploy that art.”
We couldn’t agree more than with the last quote – there is an “art” and a “science” to creating effective Word-of-Mouth. And there is even a greater art and science using social media to create “Word-of-Mouth on Steroids.” That is the real magic to Word-of-Mouth Marketing…