eMedia Daily

Effective Word-Of-Mouth Marketing Means Listening, Too

Diamond Management & Technology Consultants’ Latest Whitepaper Tells How to Harness the Power of Consumer Influence

CHICAGO, July 9 /PRNewswire/ — From “Lost” and Legos(TM) to Amazon.com(sm) book sellers and Nike(R), marketers are using word-of-mouth marketing methods to get customers talking about their products. But while companies are building all that buzz they may miss out on actually learning from their most passionate customers.

According to Diamond Management & Technology Consultants, Inc. capturing “voice of the customer” feedback is often lacking when companies launch word-of-mouth marketing campaigns. That is significant because analyzing the feedback from those campaigns can provide valuable insights into the design of future products and services.

Word-of-mouth marketing, in the form of buzz building, viral marketing, grass roots campaigns, and brand blogging, among other techniques, is defined as enabling the process of an individual initiating a communication about a brand, product, or service with another individual or group. Seller feedback posted on Amazon is a classic example. Apple’s ability to create a huge amount of online conversation about the iPhone(TM) is a recent success.

“Technology is a huge accelerator and amplifier,” said Paul D’Alessandro, a partner at Diamond. “In the past, a dissatisfied customer might influence a few friends and family members. Today a single person with an influential blog can bring a product to its knees in mere hours or days.”

In its latest whitepaper on the subject Diamond contends that in constructing an effective two-way word-of-mouth strategy companies must consider the overlaps between the disciplines of marketing and technology. A complete copy of the report, “Word-of-Mouth Marketing: How to Harness the Power of Consumer Influence,” is available upon request by sending an email to wordofmouth@diamondconsultants.com.

“Word-of-mouth campaigns should be opening new two-way channels of communication,” D’Alessando added. “But the marketing department can’t do that alone. It takes the combined power of a company’s marketing and technology teams to influence what’s being said about their brands and products and to learn more about customer preferences.”

It’s impossible for the marketing team to read and evaluate everything written in message boards, blogs, forums and user review sites. Technology should be used to measure, synthesize and extract intelligence from online consumer conversations. Advanced text mining and analytics tools can automate the scanning process and help marketers make sense of all the online chatter. The Word-of-Mouth Marketing Association is now trying to standardize WOM measurement terminology.

Don’t Start with the Creative Process

Word-of-mouth marketing campaigns can measurably improve product trials, generate sales and engender customer loyalty, D’Alessandro said, but starting with the creative process is a mistake.

“Creating an effective word-of-mouth campaign is not a linear process,” said D’Alessandro. “You’ve got to approach it from two directions, both business and technology. Collaboration between the two disciplines will yield the most impactful results.”

The business side of the house typically sets objectives. Word-of-mouth campaigns can be proactive, building awareness or capturing consumer reaction to a product introduction, or reactive, responding to misinformation or pre-empting negative publicity. In either case, the campaign should include means of measuring campaign success.

Targets and methods should be considered in terms of both the product lifecycle and the customer lifecycle. For example, giving away too much information about a new product during the development phase might create a risk of imitation from competitors. If customers who are disappointed with the product experience start sharing their negative views, marketers should have a strategy for countering detractors.

“Technology will have a huge influence on which methods to deploy,” said D’Alessandro. “High definition TV, for example, offered the television program ‘Lost’ the means to present a clue, called ‘TiVo moments’, to one of its mysteries that prompted a massive spike in activity in online forums. Lego used digital design and animation, an online catalog, and other enabling technologies to create a Lego Digital Designer that attracted new customers and generated greater sales.”

On the flip side, technology enables some marketers to gain unfair advantage by gaming online Word-of-mouth programs. For example, an anonymous service known as User/Submitter will — for a fee — promote online stories on news recommendation site Digg(sm). Although Digg will attempt to close loopholes by refining its ranking algorithm, abusers will always attempt to stay one step ahead.

“Because the playing field keeps shifting, marketing and technology team members need an ongoing relationship, not just periodic interaction,” said D’Alessandro. “This way unfair practices such as algorithm gaming and manipulation of implied consumer sentiment can be better understood and effectively mitigated when necessary.”

D’Alessandro suggests that every marketer considering word-of-mouth marketing start by asking six questions.

1. Can I track not only the conversations about my brand and products but
also the relationships between conversations, their individual growth
rates and the underlying drivers of consumer-generated conversations?
2. Why is my ROI from traditional advertising decreasing and how are
other companies reversing this trend?
3. How can I leverage word-of-mouth in my outbound marketing mix to
promote our positioning, amplify our messages and elevate our value
proposition?
4. How will I share the voice of the consumer with the right parts of my
organization’s product development lifecycle?
5. Do I understand the role of technology in enabling and measuring
word-of-mouth impact?
6. Do I have an appropriate approach to identify, launch and manage
word-of-mouth campaigns for maximum effect?

About Diamond

Margaret Boyce
Investor Relations
+1.312-255-5784
margaret.boyce@diamondconsultants.com