Word of Mouth

Word of Mouth is defined as product-talk between clients, customers or consumers, and is known to be a major factor influencing purchasing decisions.  In fact, recent research both in the US by Bain & Co, and in the UK at the London School of Economics by myself and Alain Samson, shows that word of mouth advocacy is so powerful it actually drives business growth.  For example, in the UK, a company that can boost word of mouth by 5% will add 1% to sales growth.

There are a number of ways to stimulate word of mouth advocacy rates, and these are covered in my forthcoming book, Connected Marketing.  For a useful introduction to word of mouth, see the WOMMA (Word of Mouth Marketing Association) introductory article.  In essence, however, word of mouth advocacy drives growth because it has what psychologists call 'source credibility' and source credibility is a key influence variable.  Unlike traditional marketing communications, word of mouth is perceived as trustworthy because it conveys first hand experience from someone who is seen to have nothing to gain by promoting the product or service in question.

As a market researcher, I am particularly interested in measuring word of mouth and its effects, and using market research to actually create positive word of mouth.  It is a little known fact that market research can be effectively harnessed to create word of mouth using a simple but powerful psychological phenomenon called the Hawthorne Effect.  The Hawthorne Effect is the effect of running seeding research trials on creating goodwill, adoption and advocacy amongst research participants.  Seeding research trials put new products or services in the hands of lead users in the name of research and give them a say in how the product will be commercialized.  Seeding research trials that harness the Hawthorne Effect have been scientifically proven to boost sales by 10-30%. 

For more on how to harness the Hawthorne Effect and use market research to drive sales, see the preview chapter Seed to Spread from my forthcoming book Connected Marketing.