A New Way to Measure Word-of-Mouth Marketing
Published 4/5/2010
Author: Jacques Bughin, Jonathan Doogan, and Ole Jørgen Vetvik
Jacques Bughin is a director in McKinsey’s Brussels office, Jonathan Doogan is an associate principal in the London office, and Ole Jørgen Vetvik is a principal in the Oslo office.
Summary
Consumers have always valued opinions expressed directly to them. Marketers may spend millions of dollars on elaborately conceived advertising campaigns, yet often what really makes up a consumer’s mind is not only simple but also free: a word-of-mouth recommendation from a trusted source. As consumers overwhelmed by product choices tune out the ever-growing barrage of traditional marketing, word of mouth cuts through the noise quickly and effectively.
As online communities increase in size, number, and character, marketers have come to recognize word of mouth’s growing importance. But measuring and managing it is far from easy. Learn how word of mouth can be dissected to understand exactly what makes it effective via “word-of-mouth equity”—an index of a brand’s power to generate messages that influence the consumer’s decision to purchase. Understanding how and why messages work allows marketers to craft a coordinated, consistent response that reaches the right people with the right content in the right setting. That generates an exponentially greater impact on the products consumers recommend, buy, and become loyal to.
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Caroline Andreolle wrote:
This paper promises to talk about *measuring* word of mouth and doesn't even come close to delivering on that promise. Here's a big shocker for you: word of mouth is important. There. I've just saved you 15mn.
Posted on : 4/27/2010
Jay Moore wrote:
Not bad at all. Accounting for ROI of word of mouth marketing is difficult at best if not almost impossible in most cases. However, I think this article does a nice job of trying to give some guidance as to how one can at least start trying to quantify WoM returns.
Posted on : 6/9/2010