Landmark Study Proves Word of Mouth Drives Significant Sales Volume

IN OTHER NEWS

Driving Loyalty for EasyJet - The need to consider WOM

Interesting article last week from dunnhumby’s Naomi Kasolowsky about EasyJet’s new loyalty programme. Unlike many other programmes, EasyJet appears to offer real customer value, and more importantly, delivers strong emotional impact and benefit. And it thereby answers key questions posed in the article: “How do you want customers to feel as members of the programme? What do you want them to say about it?”

Loyalty rewards have strong viral impact, and these programmes have the added benefit of being able to identify and target the more influential and socially-active customers , in order to maximise the social impact.

Hall of Fame Honour for Ed Keller

We are proud to announce Ed Keller’s induction into the inaugural class of the Word of Mouth Marketing Hall of Fame. The award was made this month by the Word of Mouth Marketing Association (WOMMA). The WOMM Hall of Fame “celebrates the true spirit and power of word of mouth marketing and honors those who are leaders, pioneers, innovators, mentors and collaborators who have given considerable time, effort and energy to the industry.”

December 1st, 2014

Landmark Study Proves Word of Mouth Drives Significant Sales Volume - and the Majority of Social Impact Comes from Offline WOM.

Multiple research studies have shown that consumers trust word of mouth recommendations more than any other form of information about brands; and that word of mouth is the primary way people make decisions about what to buy.

But to what degree are word of mouth and social media linked to sales? What is the relationship between word of mouth and paid media? Can we put a value on word of mouth impressions? And how much of WOM’s impact comes from offline conversation versus social media? The answers to these questions have been harder to come by...until now.

The Value of Consumer Conversation is Huge

According to a new landmark study, including word of mouth data from Keller Fay Group and social media data from Converseon, consumer conversations (online and offline) account for a very significant 13% of consumer sales across a diverse range of categories. Applied to the universe of consumer spending, that translates into $6 trillion in economic value. In certain higher consideration categories, the sales impact of word of mouth is closer to 20% of sales.

Further, the study finds offline word of mouth accounts for the two-thirds of the sales impact of WOM, while online social media in all its forms (including blogs, online reviews, Tweets and other posts) accounts for one-third.

These and other new and important findings about the impact of word of mouth were released at last week’s Word of Mouth Marketing Association (WOMMA) Summit. The research was organized by WOMMA, and supported by agency and brand sponsors, including AT&T, Discovery Communications, Intuit, PepsiCo, and Weight Watchers.

Among the other key findings of the research:

About one-third of the sales impact of word of mouth is attributable to word of mouth acting as an amplifier to paid media, such as television, with consumers spreading advertised messages, confirming the important, symbiotic relationship between paid and earned media.
An offline word-of-mouth impression drives at least 5 times more sales than a paid advertising impression, and much more (as much as 100 times more) for higher-consideration categories.
Word of mouth’s impact happens closer to the time of purchase than traditional media.

We believe that similar dynamics are likely to apply in the UK. We know that the scale of WOM is equally large, and our TalkTrack research indicates that WOM has high impact and credibility on British consumers.

About the Return on WOM Study

The WOMMA Return on WOM study was based on sophisticated econometric modelling of sales and marketing data provided by the participating brands on a confidential basis. Analysis was conducted by Analytic Partners, an independent analytics consultancy and recognized leader in marketing analytics, with guidance provided by the Sequent Partners consultancy. Keller Fay donated offline word of mouth data from our TalkTrack study, the only study that provides an ongoing measure of all word of mouth including offline conversation. Converseon provided the social media data use in the modelling.

To learn more

Additional results from this landmark research can be found here. And we encourage you to contact us to better understand how word of mouth drives sales in your category and for your brands, and to discuss ways in which we can help you can unleash the power of word of mouth advocacy.