It’s great when people say nice things about our brand, but many marketers are unclear about how much it really matters whether they pay attention to WOM and buzz.
This is potentially a serious oversight. Conversation and content sharing are proven to drive hard business outcomes, including sales, search and web traffic. Marketers should be monitoring buzz volume and quality (social media posts and real-world conversation) and seeking to maximize brand performance. The business case is clear, and the ROI payback is proven.
We felt it would be timely to recap some of the best evidence which underlines the power of consumer advocacy and peer-to-peer influence.
WOMMA – Return on WOM
In 2014, we were part of a groundbreaking study by the Word of Mouth Marketing Association which proved that word of mouth drives sales – 13% of sales, on average. For high consideration categories (think technology products, for example) the impact on sales is above 20%. The study also revealed that offline conversations drive two-thirds of the sales impact, while online social drives a third.
Boston Consulting – Fuelling Growth Through Word of Mouth
BCG conducted extensive analysis across a number of markets (including the UK) to assess the relationship between consumer advocacy levels and profitability. It found that that brands with high levels of advocacy significantly outperform heavily criticised companies. In the sample of brands studied, BCG found the average difference between the top-line growth of the highest- and lowest-scoring brands was 27 percentage points.
IPA & Warc Effectiveness Programmes
Ad effectiveness guru Peter Field has mined UK brand data over the past decade and consistently provided evidence that social factors help build brands and deliver long-term growth. In his analysis of the IPA effectiveness databank, Peter noted the importance of brand fame in driving volume and price robustness, and recommended that brands “measure buzz and advocacy”.
More research with Warc showed how UK brands are usual social-based campaigns to deliver tangible business benefits.
Our Own R&D
We at Engagement Labs continue to see the importance of WOM and have expanded the analysis of the relationship between conversation and sales to a much larger group of brands – already over 150 brands (compared to 6 in the WOMMA study, and extended to the UK), and the number of brands being added to our analytic model is still expanding.
What have we found so far? This increased brand-level data consistently reaffirms that there is a meaningful relationship between word-of-mouth marketing (whether offline or online) and sales. It also further demonstrates clearly that offline conversation is still the bigger driver of sales impact.
We’ll have more to say on ROI and effectiveness as the year progresses, so watch this space. And if you would like your brand to be included in our R&D programme, get in touch.
And if you want to learn more through some brand case studies, download our latest UK ebook, called Social Misfits.