Herd by Mark Earls

Author:Mark Earls
Language: eng
Format: mobi
Publisher: John Wiley & Sons, Ltd.
Published: 2010-05-10T21:00:00+00:00

4 Big word-of-mouth facts to tell your friends

Fact 1. WoM is more important than other purchase influences

Fact 2. WoM is getting more and more important over time

Fact 3. WoM operates in both B2B and B2C

Fact 4. WoM is a global - not just a US - phenomenon

WoM Fact 1. Word of mouth is more important than other influences on individual purchases

A number of studies over the years have shown that individuals claim that what other people say is more influential on their purchasing behaviour than more direct means deployed by firms trying to change that behaviour (such as advertising). A lot of the early work was done in the USA and reveals that even at the time we think of as the peak of mass media marketing, the USA was actually a word-of-mouth market. For example back in 1955, Columbia sociologists Lazarsfeld and Katz10 estimated that word of mouth was seven (!) times more powerful than newspaper or magazine ads in motivating brand-switching. Two decades later, the Roper Organization showed that word of mouth was mentioned as the best source of information about new products and services (67%) compared to advertising (53%) or editorial content (47%). A Cap Gemini study11 into the influences on automotive purchasing showed that 71% of the 700 respondents pointed towards WoM (compared to only 15% for TV advertising).

More recently in Europe, the same point has been made again and again - Mediaedge CIA’s data suggests the influence is acknowledged by UK consumers to be of the same order.

Even if we take into account the self-reporting effect (which self-respecting consumer will admit to dropping £20,000 on a car as a result of seeing a TV commercial? What would that say about them to the researcher?), the absolute power of word of mouth as the most immediate influence on purchase is difficult to argue with. The great and the good of the business world certainly think so: McKinsey have estimated that word of mouth drives two thirds of the US economy.

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