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Peer-to-Peer Marketing Word-of-Mouth is Top Purchasing Influencer

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If you want to influence a consumer’s purchasing decisions, then it’s almost always best to get to their family and friends first. If you can convince family and friends to recommend a product or service, then you’re a long way down the road to making the sale.

But how, just exactly, do you get friends and family to make a recommendation? That is the grail that most marketers seek and few find.

According to ZenithOptimedia, word-of-mouth (WOM), specifically those recommendations from family and friends, ranked highest in purchasing influences in the firm’s Touchpoints ROI Tracker study.

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Scored on a grade of one to 100, recommendations graded out to an average of 84. The next closest influencers were TV ads (69) and internet searches (67). Magazine (60) and newspaper ads (55) were next followed by outdoor (45), radio ads (42) and banner ads online (41).

Bruce Goerlich, ZenithOptimedia’s president of strategic resources, North America, told AdAge.com that marketers understand the importance of WOM but haven’t figured out to make it scalable.

“Word of mouth is incredibly powerful, but we as an industry are not doing as good a job as we could do in generating it,” he said.

Lawrence Feick, professor of business administration in the University of Pittsburgh’s Katz Graduate School of Business, told BizReport, “The sea change is that for 40 years marketers knew that word of mouth was important, influential, and pervasive. But they saw it as something to be described and hoped for.”

“It is only in the last 10 or 15 [years] that they have thought about it as a communication tool that can (at least in part) be managed,” he added.

Focus on Quality and Recommendations Will Follow

RetailWire’s BrainTrust of industry experts added further insights to this report on the site’s discussion board, encouraging retailers to focus on product quality and excellent customer service:

“This is simple,” says Joel Warady, principal, Joel Warady Group. “Brands and companies can’t and shouldn’t worry about generating word of mouth for their products. If companies force or try to generate word of mouth, it will most likely backfire on the brand. It is okay for them to ENABLE the word of mouth opportunity, and provide tools to do so (widgets on web sites, friends and family coupon programs, etc.), but if they try and implement a WOM strategy that starts with the company being the first communicator, consumers will see right through it.”

Doron Levy, president, Captus Business Consulting says It boils down to quality and service. “If the shopping experience was positive and the product worked, there is a greater chance of word of mouth referral. If either of those is missing, the buyer may not recall the product as being worthy of a recommendation. Customers highly value their own reputations when it comes to word of mouth. So the entire experience must be positive. Vendors should make more of a connection with floor staff by providing product in services and allowing feedback.”

M. Jericho Banks, Ph.D., & Partner-Owner, Select Marketing, LLC, says merchants must first convince their own employees that their product or service is the best. “Nothing is more demoralizing than learning your employees are shopping elsewhere, and it’s the most powerful anti-business testimony extant. This happens all the time among grocery store employees, and their employers rarely if ever take steps to stop it. It would be so easy, simply providing employee discounts. But retailers often cannot manage to get out of their own way. So, it occurs to me that the first step in any successful WOM effort should be reversing off-the-reservation purchase behavior among employees. Everything else flows from that.”

Some experts say word of mouth is key. “Happy consumers tell their family and friends about the experience. Whether it is a brand or a retailer, the customer must come first. This must be the mantra and practice inside the company from the top down,” says Max Goldberg, Founding Partner of The Radical Group

“Word-of-mouth has a first cousin: great publicity,” says Mark Lilien, Consultant with Retail Technology Group. “What those two have in common: both are unpaid endorsements from trusted sources. Most retailers have little or no publicity budget. Some actively shun publicity. How many retailer web sites don’t mention who’s in charge of press relations? How many folks in charge of press relations don’t answer their voice mails or e-mails? “

Editor’s Note: This article is an excerpt from one of RetailWire’s recent online discussions. Each business morning on RetailWire.com, retail industry execs get plugged in to the latest news and issues with key insights from a “BrainTrust” of retail industry experts. “Get Plugged in with RetailWire. Membership in RetailWire.com is free to all retail and related industry professionals. Simply go to www.retailwire.com and click the FREE REGISTRATION button.”

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