All Things WOM

It’s reported that 60% of online retailers are using consumer generated ratings and reviews to help customers make more informed purchased decisions. It’s also reported 61% of consumers rely on online ratings and reviews before making a purchase. Clearly, online ratings and reviews are changing the buying process by bringing forth authentic consumer voices and transparent business practices.

For the WOMMA Measurement & Metrics Guidebook, Melissa Douglas, Manager of Social Analytics at Bazaarvoice, contributed an in-depth article about measuring the impact of consumer generated ratings and reviews on a business.

I asked Melissa a few pointed questions about her article. Her responses make for good reading for every marketer and product manager.

1. Besides increasing conversion rates, what are some other benefits to a brand sharing Ratings & Reviews of products online?
“There are various benefits to bringing user-generated content (UGC) to your brand. User-generated content not only influences your top line numbers, such as increasing sales, but also impacts your bottom line. Metrics such as conversion, product abandonment, customer service interactions, and return rates can impact both your top and bottom lines. For example, by taking action on poorly rated products or assuring these reviews stay live on your site, you can easily decrease customer service support and return rates. Negative reviews help set proper expectations with your customers and give internal teams the necessary information to optimize the product catalog and improve products. And featuring highly-rated products in marketing campaigns can directly impact conversion rates and call attention to those products that your community considers the best.”

2. What types of businesses can benefit most from Ratings & Reviews? Conversely, what businesses would benefit least?
“All types of industries benefit from UGC. Most obviously, retailers benefit when customer-contributed content helps shoppers find the right products for them on ecommerce sites. But we’ve seen UGC benefit our clients across all verticals. Manufacturers can syndicate their UGC through the channel to numerous retailer sites, helping potential customers wherever they shop. Our clients in the travel industry receive the highest average user contributions per day, as travelers often book online and are eager to share their experiences. Shoppers on financial services sites click to “Read Reviews” even more often than most other verticals – for these highly researched purchase decisions, UGC satisfies the increased demand for information. And UGC helps entertainment providers attract highly-engaged contributors, as customers are eager to share their experiences from shows and artists they are passionate about. In short, any industry would benefit from authentic word of mouth.”

3. What’s the most important Ratings & Reviews metric for a business to measure if its goal is to increase sales?
“Some of the key metrics to take into consideration when measuring ROI include review volume and the percentage of products that contain reviews. Looking at depth and breadth of your review content is critical for success. Keeping your review content evergreen is important, and it’s key to continuously encourage reviews for new products as they are released and sold.”

Recently I spoke with Jay Ehret, small business marketing pro with The Marketing Spot about how everything Word of Mouth has become online Social Media-centric. That was the starting point of our discussion. We covered lots of other territory. Paul Williams from the Idea Sandbox added in another perspective on the podcast.

One question Jay asked me was:
Is WOM diminished as a marketing discipline?

My reply:
“Absolutely not. A word of mouth recommendation from a friend or an acquaintance is and will always be trusted more than traditional advertising. Friends trust what friends say more than people trust what companies say. That isn’t going to change.

As a marketing discipline, WOM is now more important than ever because we have so many ways to connect with people besides a phone call or a face-to-face visit. Being able to have a conversation with someone using computers and smart phones increases the opportunity for WOM to happen.

>>> Have a listen to the podcast <<<.

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Key quotes from the podcast include:
“In the past, we just felt word of mouth would happen serendipitously…We’ve now learned through The Tipping Point…more people are trying to think about getting people to talk, not serendipitously, but strategically.” | John Moore

“The key of it is, people passing the word about you. …It just boils down to ‘what does it mean to be remarkable?’ So remarkable, that people remark.” | Paul Williams

“My advice is to be 100% confident in how you deliver a customer experience before you start to try to strike up conversations online. Because if you are not confident, you will not want to listen to some of the negative feedback online about how you are doing business.” | John Moore

“Word of mouth, to do it properly, it’s not just a department head; it’s not just one person. It’s the way you run a company.” | Paul Williams

“It doesn’t matter how many fans you have online. But we get caught up in that as a measurement of success, and frankly the real measure of success is; is a company making money. Are they turning conversations into transactions?” | John Moore

“I sort of see word of mouth as how do companies, and businesses and people give a script to the people who might talk about you. That way you can guide the discussion. So, ‘how can I give you bullet points to talk about my brand?’” | Paul Williams

According to a recent survey from Synovate for PostRelease.com, the most common word of mouth (WOM) activity is helping someone, either a friend or family member, with making a purchase decision.

Also, 40% of the survey respondents said they shared advice with friends and family offline (in-person or via phone) about something they read online.

This is strong evidence to support the 90/10 split of offline WOM to online WOM.

Learn more from this emarketer article.

In presentations I give on word of mouth marketing for WOMMA, this slide always causes debate. It shares research findings from the Keller Fay Group on where conversations about companies take place. People are shocked to see the online percentage so low.

People are further shocked to learn, according to more Keller Fay statistics, about 1.3% of word of mouth conversations about brands happen on social media websites. Given the reported widespread usage of Facebook, Twitter, blogs, etc, how could that number be so low?

At the recent WOMMA Creating Talkable Brands conference, I heard Brad Fay, coo of Keller Fay, address this issue head-on. Fay explained, “It’s not that the online conversation is so small. It’s the other is so big.”

The big number Brad refers to is … 3,000,000,000. (Ahem, we’re talking three billion here.) That’s the number of word of mouth conversations Keller Fay estimates take place on a typical day in America. If 1.3% of word of mouth conversations about companies happen on social media websites, then that’s 43-million daily conversations. A VERY sizeable number.

In an email exchange with Ed Keller, ceo of Keller Fay, I asked him to support his company’s offline/online word of mouth findings.

“At Keller Fay we are measuring word of mouth conversation, not readership of consumer generate content. Lots of people might read information on social networking sites, but contribute infrequently. Especially when it comes to brands. There is recent research cited in the attached from digital agency Razorfish that says about 2% of online Americans post something online “daily” relating to brands.

People read statistics about the huge growth in social media and the numbers are impressive. There are fewer stats generally reported about the ~3 billion brand impressions created each day via offline WOM. The social media stats do not come close to that number. So the disconnect is that the offline number is so large, but not generally reported, so there is no point of reference from which to compare the social media stats.”

Ed Keller shares more explanation in this editorial piece. WOM Marketers … pay special attention where Ed says,

“… social media alone is not going to be the pathway to word of mouth success for most brands. It is a pillar, an avenue for conversation. The role of social media for consumers is, for now at least, more about connections with other people than connections with brands.”

Last month I joined Zuberance ceo/founder Rob Fuggetta for a webinar on creating and energizing brand advocates through word of mouth marketing.

Rob presented his company’s recent work for Symantec’s Norton anti-virus software where 10,000 Norton brand fans were energized to post online reviews. The result was significant: average online ratings increased from two-stars to four-stars and Norton’s “net promoter” score doubled. This online word of mouth program from Zuberance was recently awarded a 2009 Groundswell award.

I opened the webinar with some general information about the impact of word of mouth and a unique way to look at creating on-going word of mouth.

Watch and listen to this archived webinar…

When you return from a conference chock-full of insights, it’s difficult to share everything you learned. Sure, you can transcribe your notes but your notes are bound to have some holes. You can also pull insights from summaries other attendees have posted on their blogs.

Or … you whittle through the thousands of tweets from attendees to carve out a more complete list of insights. That’s the path I’ve chosen to take after returning from WOMMA’s Creating Talkable Brands conference.

Over 470 attendees shared 3,600+ tweets (.pdf download) with the #WOMMA hashtag during the three-day conference. I’ve whittled down the 3,600+ tweets to a more digestible collection of 165 tweets and compiled them into this SlideShare presentation. Enjoy.

NOTE: I’ll also be sharing video snippets and more in-depth summaries after the Thanksgiving holiday.

Did you see this? PQ Media has released its second Word of Mouth Marketing Forecast Report. The report offers a deep dive into the size, scope, and growth of the Word of Mouth Marketing industry.

It’s a hefty read at 115 pages. But the information is worth digging into for marketers at both brands and agencies.

WOM spend is on the rise, even in today’s recessionary times. In this report you’ll find out where money being spent, why it is being spent, and how companies are benefitting from their strategic WOM spend.

WOMMA members get this report free. (Membership perk.) Others must pay.

However, I’ve compiled a few highlights from the report into this short video. (Hopefully this video will whet your marketing appetite to learn more from reading the full report.)

Not that any of us should be surprised, but “Recommendations by Friends” tops the list of most trusted information sources as measured by eMarketer.

However, the disparity in the trustiness of “Recommendations by Friends” as compared to other forms of media from Western European and Asia Pacific countries may surprise us.