A New Way to Measure Word-of-Mouth Marketing

Topics: Marketing, Word of mouth, Advertising Pages: 5 (1308 words) Published: December 23, 2012
A new way to measure word-of-mouth marketing
Assessing its impact as well as its volume will help companies take better advantage of buzz.

By Jacques Bughin, Jonathan Doogan, and Ole Jorgen Vetvik


Consumers are usually value opinions expressed directly to them. Marketers should spend millions of dollars on advertising campaigns, as simples and free products are not as powerful as word-of-mouth, which is the primary factor behind 20 to 50 percent of all purchasing decisions, to make up customers’ mind. Actually, word-of-mouth could cut noise quickly and effectively.

Although customer will conduct more research, seek more opinions, and deliberate longer when they want to purchase new r expensive products, word-of-mouth may always affect their decisions. Nowadays, it is a one-to-many basis as products reviews are posted online and opinions disseminated through social media. While online communities are increasing in size, some customers trend to praise or punish brand on their own blogs. In order to measure word-of-mouth, marketers created “word-of-mouth equity” which is an index of a brand’s power to generate messages that influence the consumer’s decision to purchase. The main concern is that how could marketers receive consistent response that reaches the right people with the right content in the right setting.

A consumer-driven world
When thinking about creating a new marketing campaign, it is a must to balance the power between companies and consumers. Customers now prefer to make purchasing decisions largely independent of what companies tell them about products. They love to make evaluation base on the product experience, recommendations, or awareness-building marketing. They will consider a large range of varieties of sources and have a postsales experience to inform the next consumption.

Word-of-mouth is so powerful that it can affect customers’ perception toward a brand or product. It is not just a on-hit wonder; instead, it can resonate and expand the brand’s or product’s market share in a long-term way. In addition, online platforms increase the potential for significant and far-reaching momentum effects.

Understanding word of mouth

As nearly 50 to 80 percent of word-of-mouth activity is about experiential word-of-mouth, it is being treated as the most common and powerful one. It results from a consumer’s direct experience with a product or service, largely when that experience deviates from what’s expected. It is believed that positive word of mouth can generate a tailwind for a product or service.

Marketing activities is another way of triggering word of mouth. It will occur when consumers directly exposed to traditional marketing traditional marketing campaigns pass on messages about them r brands they publicize. Such consequential word of mouth is more powerful than using the traditional advertisements.

If a marketers use celebrity endorsements to create positive buzz for their brands or products, it is called intentional word of mouth, which is the less common way.

Word-of-mouth equity
It is recommended that when the marketers want to choose the way to create word of mouth, they should first study, understand and measure its impact and financial ramifications, both good and bad.

Marketers should pay attention on the recommendations and dissuasions for a product, as consumers are likely to be influenced by family members or trusted friend. The way to measure the word-of-mouth equity represents the average sales impact of a brand message multiplied by the number of word-of-mouth messages. This way can reflect the effect on sales and market share for brands, individual campaigns, and companies as a whole.

It is crucial that a trustworthy person will affect consumers. For example, consumers who know cars might influence cay buyers but not consumers shopping for beauty products. Surprisingly, influential typically...
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