1. Marketing Concepts:
Word Of Mouth Marketing

2. A little Introduction…
For centuries, word-of-mouth marketing (WOMM) has
influenced purchasing decisions on everything from buying a
new car to restaurant recommendations. It’s no coincidence
that you and your network share a few of the same favorite
things. Who doesn’t love hearing about a great product or
service from a trustworthy source?
The idea of “going viral” is often times the first thought to
enter the minds of marketers when it comes to strategizing
how to harness the power of WOMM. While it would be nice
for every single campaign to end up as a trend on SNS,
WOMM has invaluable impacts on your brand beyond one-
time viral marketing campaigns.

3. What Is Word-of-Mouth Marketing?
WOMM is when a consumer's interest in a
company's product or service is reflected in their
daily dialogues. Essentially, it is free advertising
triggered by customer experiences—and
usually, something that goes beyond what they
expected. Word-of-mouth marketing can be
encouraged through different publicity activities
set up by companies, or by having opportunities
to encourage consumer-to-consumer and
consumer-to-marketer communications. Also
referred to as "word-of-mouth advertising,"
WOM marketing includes buzz, trend, viral, blog,
emotional, and social media marketing.

4. Understanding Word-of-Mouth Marketing
Word-of-mouth marketing differs from
natural word-of-mouth references to a
company's products and services in how it
may come as the result of a promotion,
encouragement, or other influence by a
company, otherwise known as "seeding."

5. When a diner has a wonderful time at a restaurant because
their expectations were exceeded and later tells tweets
about it, or when someone had a great experience using a
product in a new way and tells everyone they know about it,
those are examples of word-of-mouth marketing.
The encouragement on the part of a company may take one
of several forms. The best way is to give them a reason to
talk, such as exceeding expectations or providing insider
skills or information about a product. Other strategies
include offering consumers new ways to share information
about a company's products and services, and engaging and
interacting with the consumer, such as through exemplary
customer service.
Understanding Word-of-Mouth Marketing

6. • Social shout-outs. This includes @mentions of your brand and tagged posts.
• Employee advocacy. In short, this is when employees or colleagues boost your promotions
and content on their own accounts.
• User-generated content and hashtags. When customers share photos of their photos,
experiences or purchases. Typically, these posts are attached to brand @mentions and
hashtags.
• Reviews. Either on-site, social media, Google or third-party review aggregators.
• Blog posts, press mentions and earned media. Coverage in industry publications is a
powerful form of word of mouth typically reserved for brands doing something truly
noteworthy.
• Brand ambassadors. In short, customers who consistently promote your products and
brand in exchange for discounts or products.
Examples of WOMM

7. • 92% of people around the world said they trust recommendations from
friends and family (earned media) above all other forms of advertising.
• 70% of people trust consumer reviews online.
• 72% of people get news from friends and family, making word-of-
mouth the most popular channel for sharing.
• 68% of people trust online opinions from other consumers, which places
online opinions as the third most trusted source of product information.
• 88% of people trust online reviews written by other consumers as much
as they trust recommendations from personal contacts.
• 32% of consumers trust online reviews only if there are multiple
customer reviews.
• 26% of people trust online reviews depending on the type of business.
• 28% prefer to learn about new brands or products via word of mouth
(note that social media close behind at 23%).
• Word-of-mouth has been shown to improve marketing effectiveness by
up to 54%.
• 49% of people say they rely on recommendations from influencers when
making purchase decisions.
Important WOMM Statistics

8. Important WOMM Statistics

9. Code of Ethics
There is a significant temptation to fabricate word-of-mouth
marketing. Accordingly, the Word of Mouth Marketing
Association (WOMMA) has crafted a code of ethics for the
industry, the best word-of-mouth marketing strategies are
"credible, social, repeatable, measurable, and respectful"
WOM marketing expert Andy Sernovitz has boiled down
WOMMA's code of ethics into three key rules to avoid issues:
• Say who you are representing (always disclose a
relationship)
• Say only what you believe (be honest with an opinion)
• Never lie about who you are (be honest about your
identity)

10. 1. Free-of-Cost Advertising
The significant part about WOM marketing is that you
don’t have to make any investments in the advertising. It
is all free-of-cost marketing that is organically generated
by the users for your brand.
2. Develop Brand Loyalty
If the customers are happy and satisfied with the services
provided by your brand, then only they will contribute to
word-of-mouth marketing. Happy and satisfied customers
will become loyal to your brands as well and will stay with
the brand for the long-term.
Advantages of WOMM

11. 3. Online Community
You can build an excellent online brand community
through WOM marketing. These members of your brand
community can act as your brand advocates on digital
mediums.
The disadvantage of word of mouth marketing here can
be that negative word-of-mouth about the brand can
cause an adverse impact on community & results.
4. Build Brand’s Social Proof
When customers become your brand advocates, they will
help you build trustworthiness, reliability, proof of
authenticity, and credibility for your brand. It is crucial to
have social proof to grow your brand and conversions.
Advantages of WOMM

12. 5. Increase Your Conversions & Sales
Most important of all, you can increase eCommerce
conversions and sales through positive WOM marketing.
So, the facts prove that 9 out of 10 people turn to their
friends & peers for a recommendation that influences
their online purchase behavior.
Advantages of WOMM

13. How to Build a Word of Mouth Marketing Strategy?
• Highlight Your USP
• Boost positive social comments and customer
stories
• Create Interesting “Viral” Campaigns
• Extend your brand’s reach through employee
advocacy
• Monitor mentions and respond ASAP to keep
conversations rolling
• Reap in Influencers
• Provide customer service that over delivers
• Rewards Program

14. Knowing both customer lifetime value (CLV), the worth of your
customers’ purchases, and customer referral value (CRV), the
value of their referrals, enables you to segment your
customers into four constituent parts:
Those that buy a lot but are poor marketers (which they term
Affluents); those that don’t buy much but are very strong
salespeople for your firm (Advocates); those that do both well
(Champions); and those that do neither well (Misers).
How Valuable Is Word of Mouth? CLV vs. CRV

15. How Valuable Is Word of Mouth? CLV vs. CRV

16. How Valuable Is Word of Mouth? CLV vs. CRV

17. This helps marketers decide where to focus their efforts. Rather
than waste funds encouraging big spenders to spend slightly
more while overlooking the power of customer evangelists who
don’t buy enough to seem important, you can reap much higher
rewards by nudging big spenders to make referrals and urging
enthusiastic proponents of your wares to buy a bit more.
How Valuable Is Word of Mouth? CLV vs. CRV

18. Case Study: NETFLIX
Netflix has a solid strategy that has proved to be successful, along with
creating WOMM. They have invested in smart software that allows it
to track the users’ preferences and unlike other streaming services,
Netflix releases all the episodes at once so anyone can enjoy the show
in one go! For example, Breaking Bad was the most binge-watched
show globally. AMC, the original Breaking Bad network, said the only
reason the show got a big exposure was that people could binge
watch it on Netflix.

19. Case Study: NETFLIX
So Netflix got customer satisfaction and users’
preferences in their bag. What else is part of their
game plan for WOMM? Lastly, Netflix knows people
like to watch contemporary issues, so it offers a
diverse genre for users. For example, Netflix’s recent
documentary The Social Dilemma has caused quite a
chaos. As a result, people automatically talked about
it on various platforms.

20. Negative word-of-mouth (NWOM) is a consumer response to
dissatisfaction. It is defined as: interpersonal communication
among consumers concerning a marketing organization or
product which denigrates the object of the communication.
There are 2 types of NWOM:
Random: occasional lapses in product quality control or
customer relations
Systematic: when large numbers of customers experience the
same problem with a product or company. Such NWOM will
normally not be offset by positive word-of-mouth. Systematic
NWOM indicates potentially serious problems for a marketing
organization. In such cases current customers may defect to
competitors and potential new customers may avoid the firm.
Clearly, systematic NWOM can have a serious impact on a
marketing organization.
Negative Word of Mouth (NWOM)

21. • Offer traditional avenues of support: Customers are still 11 times more likely to complain
by phone than online, and 70% of people who complain online do so as a result of a failure
in traditional customer service.
• Take responsibility for the experience: 37% of your complaining customers will feel
satisfied if you correct the situation with a conventional remedy. Apologize, admit to the
mistake, and thank them for their feedback.
• Add some love to your customer’s journey: If they connect with the experience on a more
personal level, customers will be more forgiving when they encounter a situation that’s not
so great.
How to prevent NWOM?

22. Ultimately the success of your WOM marketing campaign
relies on the experiences and intentions of the consumers.
So your goal should be to deliver an excellent consumer
experience through maximum touchpoints that fulfill the
needs and requirements of the consumers.
What turns a business into a BRAND is when its customers
are willing to take credibility and responsibility for its
products/services. That is when the magic of word-of-mouth
marketing happens.
Have a Consumer-focused approach, and your customers
will build your brand for you.
Final Words!

23. 1- How Valuable Is Word of Mouth?
by V. Kumar, J. Andrew Petersen, and Robert P. Leone
https://hbr.org/2007/10/how-valuable-is-word-of-mouth
2- Investopedia
https://www.investopedia.com/terms/w/word-of-mouth-marketing.asp
3- Business2Comunity
https://www.business2community.com/marketing/40-word-of-mouth-marketing-statistics-that-
you-should-know-02151673
4- https://wpmanageninja.com/word-of-mouth-marketing-strategies/
5- Word of Mouth Communication As Negative Information
https://www.acrwebsite.org/volumes/6334/volumes/v11/NA-11
References