Studies have gone back as far as the 1960s and WOM is the most powerful form of marketing and rightfully so! Think how powerful it is when a friend who actually uses a product evangelizes or gives his or her endorsement of the product. Trust is a big key.
92% of consumers believe in WOM making it the most important form of marketing. On that note, only 6% of marketers feel they are experts in WOM marketing and feel they need “more proof” since its very difficult to measure offline. Even if they may need proof for their own particular brand, WOM is responsible for $6 trillion of consumer spending each year.
WOM on average drives 13% of sales where all paid marketing is on average between 20-30%. Two-thirds of WOM is offline and is difficult to measure but can be tied to something that they saw online on social or in an email. Think of how often you talk to a co-worker or family member about an ad or post you saw in your news feed or Tweeted. You need to supplement your WOM marketing with paid ads because its likely that someone sees a paid ad and talks about it our tells a friend who goes to visit the site (both direct and indirect conversions).
WOM amplifies the affect of paid media by 15% and had a stronger and more immediate impact on the consumer. It appeared that conversions happened within two weeks of the recommendation, even for higher consideration items.
A WOM impression has more impact than a paid media impression but the increase is a wide gap (between 5x to 200x) depending on the pricing point, influence of the person who recommended, and budget. High consideration products and services are impacted more by WOM than a lower consideration product service.
Just starting your business? Make sure to work WOM into your marketing plan! New and smaller brands have a larger percentage of WOM marketing since they can dedicate the time to cultivating the relationship between the consumer and the brand. Lastly, we need to avoid the Paid vs. Earned silo because they work so closely together that it’s impossible to separate.
I want to thank Brad Fay, Lee Hurley, Beth Rockwood, Nancy Smith, Peter Storck, Erin Tavgac, and Jim Totten for a really great panel discussion. They really addressed a lot of concerns with measuring WOM and cutting through the noise.