Pssst…. Have You Heard the Buzz? Word of Mouth Continues To Grow Despite the Economy

August 25th, 2009 • Industry News, Word of Mouth
Tags: social media marketing, Word of Mouth (WOM) marketing

In the midst of the worst economic and media recession in more than a quarter-century, Word of Mouth (WOM) marketing has continued to flourish despite ad spending cuts across most media.

What KPIs Should You Use When Measuring WOM?

August 7th, 2009 • Measurement, Word of Mouth
Tags: Uncategorized

When developing a word of mouth campaign, being able to measure, track and compare the results is essential for a successful campaign. For organizations wanting to leverage word of mouth — especially those using Web 2.0 tools — it’s obvious that traditional analytics alone are insufficient.

For a successful WOM campaign, engagement and outreach efforts need to be carefully monitored in real-time to ensure that messaging is consistently being received by the target audience. Measurement should encompass KPIs such as sentiment, online engagement, and the successful integration of social media into existing campaigns.

Forrester Research, at their Forrester Research Marketing Forum, proposed a new metric, engagement that includes four components: involvement, interaction, intimacy, and influence. Each of these is built from data collected from online and offline data sources.

• Ivolvement tracks site visitors, time spent, page views and more (old-school stuff)
• Interaction measures the contributions to blogs, photo and video creation and uploads, and purchases
• Intimacy tries to understand consumer attitudes, perception, and feelings about a brand through surveys or monitoring technology as well as applications providing an interactive environment between brand and consumers
• Influence measures the likelihood that consumers will recommend or advocate products or brands

Using engagement as a metric, you get a more holistic appreciation of your customers’ actions, recognizing that value comes not just from transactions but also from actions people take to influence others. Once engagement takes hold of marketing, marketing messages will become conversations, and dollars will shift from media buying to customer understanding.

WOM Integration Between Advertising and Digital Channels

August 7th, 2009 • Word of Mouth
Tags: Uncategorized

Consumers no longer move neatly from one touchpoint to the next, from branding to promotion to sales. Instead, they snack on digital content delivered through a dizzying array of devices. They share ideas about products, companies, and brands, with their brand awareness and purchase consideration formed just as much by trolling a few niche-oriented blogs or peer-generated odes to the product on YouTube as by a national branding campaign. They research online and buy in stores. They shop in stores and buy online. The Internet has shattered the entire concept of a linear purchase funnel.

The traditional advertising scenario is very front weighted with value, but it is constantly in a state of decline as time goes on. You pay for the creation of the ad and the media buy and then sit back and pray. You’re not wasting millions of untraceable impressions on TV, radio and print buys. You’re forming real relationships with people that spread their version of your message along the chain.

With social media, however, you invest up front, but your spending has to scale as your message spreads to new audiences over time. The value you get takes longer to build and catch up with the advertising model, but it will eventually exceed it. That’s a hard thing to budget, but it’s important to note.

It seems pretty clear right? But this is a huge mental leap for most marketing organizations. The new model is about building relationships that grow and spread to new relationships. Here is a graphical representation of this shift. Advertising will have diminishing returns over time as social connections will deliver more and more value.

It’s essential to have integration between traditional advertising and social media to deliver the right message to the right people at the right time to spark authentic word of mouth.

Engaging Women as “Chief Financial Officers” through WOM

August 7th, 2009 • Strategy, Word of Mouth
Tags: Lynn Eastep

By Lynn Eastep

Women, long the keeper of the household checkbook, are increasingly taking charge of the family investments as well. Increasingly, women are stepping into the role of family CFO. America is becoming a “Femocracy” with women making the key purchasing and investing decisions in millions of households – in effect, making “Mom” the chief executive officer, chief financial officer, chief purchasing officer, and chief operating officer.

Word of mouth is hugely influential among women when making financial decisions. More and more of those recommendations are coming in the form of social media engagement, particularly for financial decision-making. According to Oppenheimer, women manage 1 trillion dollars a year, yet they still often lack the knowledge and confidence to invest their money. Increasingly, women are looking to social networks for advice and information—not just on life issues but on financial decisions. A survey commissioned by Citigroup’s Women & Co. unit, which offers financial services aimed specifically at women, found that 63 percent women themselves the CFOs of their households—responsible for making the majority of financial decisions.  Additionally, women are no longer waiting for one of life’s big transition events — like divorce, widowhood — to develop a financial plan.

Women are increasingly empowered by the abundance of financial services information online, but the onslaught of information can be overwhelming. Women are strongly influenced by word-of-mouth (WOM) and look to their friends for advice. With the rise of social networking, blogs and viral video, this group has many user-generated sources for information about financial services. The fact that women favor WOM, combined with their use of social networking, indicates they are a strong audience for financial WOM marketing efforts.

Women investors have taken to social media in big numbers, and they are listening closely to what their peers have to say. A 2008 study by Cogent Research, which examines the impact of social media on investment-related decisions, reveals the following primary trends:

• Women investors are highly engaged in social media;
• WOM influences a majority of investment decisions;
• One out of every four U.S. online adult is engaged in WOM that deals specifically with personal finance and investing;
• Social media leads investors to question the accuracy of information delivered by official sources (advisors and  investment firms)

Social media offers financial services companies the opportunity to engage online, connect with women in a personal manner and subsequently become their trusted resource. Many financial services companies are missing opportunities to an leverage  social media to educate, inform and engage women. To remain relevant,  financial services companies  need to create lasting, valuable relationships with women by responding and engaging through WOM.