As the old expression goes, it doesn't matter what they say as long as they spell your name right.
But in word-of-mouth marketing that isn't necessarily the truth, according to David Godes, associate professor of business administration at Harvard Business School.
As Godes told attendees at the Direct Marketing Association's recent annual Catalog on the Road conference in Cambridge, MA, more chatter about a brand within a single social group doesn't always translate to success.
One case Godes researched involved looking at new television shows and gauging whether conversations about the programs led to increased viewership. He found that a lot of comments about a particular show in one online forum didn't mean more eyes were watching. It turned out that two different people talking about a show on two different communities was better than 10 people talking within the same community.
“It's easy to get information to flow within one community,” he said. “It's more difficult to get information to flow between different communities.”
Godes' research also has shown that loyal customers aren't always the best prospects when it comes to generating word-of-mouth buzz.
For example, a Massachusetts restaurant chain got two groups of people to talk up the business — half the folks were members of the company's loyalty club while the others were hired from BzzAgent, a Boston firm that hires individuals to create chatter about a product.
Sales were tracked weekly by market, and more impact was felt from the pros-for-hire's work than the (one would think) more heartfelt efforts of happy customers. This could be, said Godes, because on a personal level people tend to stay within their own circle.
Of course, he noted, there is the concern that consumers would disregard the opinions of someone they discovered was a company's paid advocate. The information still would be considered by consumers, but they might mentally downgrade its value.
Companies should be aware that there's a degree of self-motivation to word of mouth, he added.
“Everyone has an infinite amount of information in their heads,” explained Godes, whose work has focused on word of mouth and sales management. “How do we chose what to talk about? We want to make ourselves look good.”
People who consider themselves experts on a given topic want to say things that will further their reputation and the way people view them, he said. Thus their interest and comments will be more selfish.
In contrast, he noted, people who don't think of themselves as authorities won't skew their comments in either a negative or positive way.
Small businesses can effectively use word of mouth without spending a lot of money. Companies need to consider what kind of information they want transmitted and how to facilitate its flow as well as how they can best appeal to their audience. Godes said one way to analyze word of mouth is to observe what people are saying — for example, by looking at online communities and noting what kind of chatter there is about your brand.
As for the time frame companies should allot to measure word-of-mouth marketing efforts, Godes indicated that businesses have to let campaigns run for a bit to pick up steam. Lee Jeans (see “Blue Jean Buzz” above) gave its online gaming effort 12 weeks.
Naturally, firms want to avoid negative word of mouth at all costs. An encounter with a rude salesperson or problems returning an item can lead to customers telling friends their not-so-friendly feelings about a business. How a company handles such situations can tune down the negative buzz, he said.