Daniel Bone, Consumer Insight Analyst, Datamonitor You Asked Is word of mouth marketing emerging as the new way to attract and keep customers?

WOM as a concept has been around for a very long time. However, it is only recently, in the era of information overload and media saturation moreover, that WOM has taken on renewed emphasis. We have identified 7 reasons why it’s a useful approach to attracting new consumers….

However, the benefits of using WOM orchestrated marketing must be analyzed on a brand by brand basis.The high risk element derives from the fact that V&WOM marketing is not an exact science, especially as consumers become more skeptical of marketers using the tactic. The success of WOM is also highly dependent on the type of product at stake. High involvement products such as the latest hip tech gadgets are more conducive than mundane commodities because ‘opinion formers/trend-connectors’ are more likely to pass on the message to further enhance their credibility amongst peers.

The possibility of negative WOM is also equally likely. Indeed, few campaigns in the CPG industry have achieved the exponential growth intended, and there is now a growing sense of overkill. Furthermore, whether a message gets spread is often beyond the marketer’s control and results can be extremely difficult to measure.

For WOM to be really effective to generate PWOM the product needs to exceed the expectations of the target customer. In instances where product performance fails to match consumer expectations consumers typically engage in negative WOM. Therefore it is highly important that, at the time when industry players are making increasingly extravagant product claims, expectations are matched by the product offering.

As a final point we also think it is vital that industry players integrate viral and WOM efforts into their overall marketing strategy. Trade literature suggests that marketers are currently failing because they are not effectively combining traditional and new marketing tools successfully. It is important in the long term not to overuse V&WOM marketing as a stand-alone promotion tactic.

Datamonitor