It's possible to infer a word-of-mouth campaign's value without having a loyalty program, but the math tends to be fuzzy at best. Colloquy's editorial director Rick Ferguson cites the example of Dunkin' Donuts, which hired a buzz-marketing firm to help introduce a latte coffee drink.
According to Ferguson, the agency used a network of paid reps who went into four markets, had conversations about the drink and handed out coupons. For comparison purposes, Dunkin' Donuts promoted the latte drink via radio commercials in four other markets.
Three of the four markets where the word-of-mouth program ran showed higher lifts in the espresso drinks category (which is how Dunkin' Donuts' point-of-sale machines classified the drink) than in the radio advertising markets.
Did this mean word of mouth worked?
Not necessarily. “You could argue it was a successful campaign that had a problem with measurement,” Ferguson says. The problem was that the chain had no way of identifying these customers, no way of being certain the espresso drinks were the new latte and no way of further stimulating either the customers' behavior or their advocacy.
If the goal was for Dunkin' Donuts to make its numbers, that's fine, Ferguson says. But assume these customers had to sign up for an e-mail newsletter or a rewards program. The chain would then have a database allowing it to track and measure customer behavior over time and determine the worth of future word-of-mouth campaigns.
