Word of mouth is one of the most powerful drivers of purchase decisions

6 Myths About Word Of Mouth Marketing

Importance of peer-to-peer influence:

Peer-to-peer influence is of the utmost importance in spreading ideas, products or campaigns. Without visibility a new practice or technology will not spread to the wider population. As a result word of mouth (WoM) marketing has grown in importance as businesses have recognised the value of getting people to talk about what they do or what they offer. Indeed, it is estimated that WOM is the primary driver of between 20% to 50% of purchase decisions.

“Peer-to-peer influence – what people do with and to each other – is the prime shaper (of mass behaviour).” Mark Earls, Herd.

At the same time there are some common misunderstandings about WoM and how it can be used by marketers.

1. Word of mouth is the most powerful form of social influence:

Personal influence is much more important than traditional  marketing because individuals will often be willing to  comply, conform and copy the behaviour of their peers. Our natural ability to copy embeds knowledge into our social networks that can spread throughout wider society.

A widely held belief here is that such influence is defined by word of mouth (WoM). Word of mouth is not the most powerful form of social influence; it’s just the most noticeable. Measuring WoM may be a good indicator of peer-to-peer influence but it does not cover non-verbal behaviour,traditions or social norms which can be more important drivers of mass behaviour.

Leading by example is often a much more powerful form of social influence. Pedro Gardete, Assistant Professor of Marketing at Stanford University,  analysed in-flight purchasing behaviour on 2,000 flights of a major US airline between January and February 2012. His analysis found that people sitting next to a passenger who bought something on the flight were around 30% more likely to make a purchase themselves.

He also analysed the behaviour of people travelling together under the same reservation number. The propensity to buy doubled if the person next to them makes a purchase and is someone they know. This could be due to friends or family sharing the same tastes, but it could also suggest they are influenced by their travelling companion.

2. Marketing-generated WoM can be as influential asnaturally originating WoM.

 

The evidence suggests that naturally generated WoM is more influential than marketing-stimulated WoM. This may be because it is perceived to be more genuine and less manipulative. The key take-out here is that what people do without business involvement is more powerful at driving significant and swift change in consumer behaviour. Just look at how quickly SMS text messaging was adopted as a means of communicating with each other and yet it
was just an afterthought from the mobile networks.

3. Word of mouth as a channel for markers in relatively new.

 

WoM is an important channel for marketers because
it is a persuasive and to a degree, a free media. However, an appreciation of the power of WoM is nothing new. A US study in 1955 estimated that WoM was seven times more influential than print advertising at encouraging brand-switching.

WoM has long been seen as a filter on information that is received from third-parties by our social networks. This appears to becoming more important as people have learnt to trust authority less and less. Trust in Government among the public in the US stands near an all time low and in the UK Ipsos MORI research indicates that the public are less likely to trust politicians than most other professional occupations. As a result is should not be surprising that WOM is perceived to be the most trusted source for recommendations.

4. Word of mouth is less important in B2B compared to B2C markets.

The perception among some markers that B2B markets are somehow less influenced by what individuals say about brands does not stack up with the evidence. WoM is just as important in B2B as in B2C markets because people in organisations are integrated into the same social networks that the rest of the population are part of.

Sure, what your colleagues mention about a brand can be important. But you can’t divorce yourself from what your peers outside your organisation have to say, and nor can you close yourself off from
what family and friends may contribute to your perception of a supplier.  Add in what you find out when you Google the product or service and there is little difference between WoM for B2B and B2C
markets.

5. People can’t tell the difference between marketing-generated WoM and  naturally occurring WOM.

Over the years many organisations have attempted to package marketing initiated WoM as coming from an independent source, such as a blogger, with the aim of spreading their message across our social networks. This has now been outlawed in many countries. As such marketing’s efforts to generate WoM is often clearly distinguishable from the naturally occurring variety.

However, if any organisation did consider attempting to present their message as naturally occurring word of mouth the risk of damage to their reputation is massive. Indeed, Mark Earl’s in his book Herd suggests that as “super social” apes humans have innate ability to spot cheating and deception. This may be related to the wisdom of crowds that has been observed in many contexts. Whatever the mechanism though which deception is discovered you can guarantee that the consequences will have major ramifications for any brand.

6. Word of mouth is another marketing communication tool.

 

Sorry, but WoM is not another marketing innovation.
WoM is a naturally occurring interaction between different people that is primarily driven by our instinctive desire to establish and reinforce social bonds. We are sometimes motivated by other factors such as curiosity and survival instincts, but frequently WoM is just a means of keeping the channels of communication open. So when we say hello and chat to our neighbour about the weather we  may not be that interested in what they say, but it has benefits that are important to us from a social perspective.

To put WoM marketing into context research suggests that a majority of what we say to each other is about social relations. That is what we do with or to other people and who we can or cannot
trust. Social content (e.g. gossip and rumour) also tends to be the most memorable part of a conversation. This insight probably explains why ideas that  enable social content sharing can spread very quickly as they facilitate something that is crucial to the functioning of our social networks.

Given this insight we may see WoM as a channel or a medium to create a ripple effect in the target audience’s social network. However,because people are constantly sharing thoughts and ideas about a diverse range of topics the water into which we drop our pebble is more like a bubbling hot-tub full of lots of excited and playful people than a calm expanse of water. This means that luck and timing play a big part in whether your idea is noticed or just swallowed up in the noise of human society.

What matters most about WoM is the social system, the people involved and their desire to interact about something. Clearly endogenous or self-generating WoM is much more powerful than superficial marketing generated WoM that organisations initiate. This reflects the deep seated human characteristic of talking to each other about a topic which nourishes the interactions with other people.

People are highly motivated to share their passions and obsessions with others. We are drawn to identify with a cause. People will chat
whatever you do, and sometimes it will be about you, but more often it won’t be. The real reason for WoM is the social interactions around the topic. The subject of discussion provides the oxygen to sustain interactions rather than the purpose of our conversations.

Businesses can try to facilitate WoM, but they may also limit, prevent or intensify the interactions of people with each other. What is most influential though is what we observe others doing, what we think they are doing and how we interact with them. Rather than constantly trying to control how people interact with our brands we need to let go. We should encourage and help people to engage with each other about our products or ideas as this ultimately results in value creation.

Thank you for reading my post. I hope it generated a few ideas and if you have time you can read previous posts on how we are influenced by the behaviour of others:

 Previous posts on social influence:

1. How do social networks influence human behaviour? How people who are close to use influence our behaviour in many different ways.

2. What makes social networks tick? What set of circumstances encourages collaboration and sharing between people.

3. Are most purchase decisions the result of other’s  behaviour & opinions? What does the evidence say about how powerfully other people influence our purchasing decisions and what are the different ways that we copy other people.

You can view my full Digital Marketing and Optimization Toolbox here.

 

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  • Neal has had articles published on website optimisation on Usabilla.com  and as an ex-research and insight manager on the GreenBook Blog research website.  If you wish to contact Neal please send an email to neal.cole@outlook.com. You can follow Neal on Twitter @northresearch, check out the Conversion Uplift  Facebook page or connect on LinkedIn.