Why are so many brand categories woefully bad at word-of-mouth?

Dec 12, 2017
Tom Ryan

According to a new study from Engagement Labs, an estimated 19 percent of consumer sales are now driven by offline and online social conversations. But many retail categories are failing to capture much WOM (word-of-mouth) buzz.

The study, conducted in conjunction with Koen Pauwels, professor of marketing at Northeastern University and BI Oslo, determined that 10 percent of consumer sales are attributed to offline conversations (face-to-face) versus nine percent to online conversations (social media).

However, the study of 170 brands, as well as more detailed analytics on 21, found that certain categories benefited much more from WOM. Tech products were far in front with 29 percent of sales in that category driven by WOM, made up of 15 percent offline conversations and 14 percent online.

Overall, Engagement Labs said that despite the widespread adoption of social media platforms among consumers, many brands are failing to break through, particularly in consumer categories that include beauty, household products, food and beverages. While the study shows that these categories gain sales through social media conversation, their actual performance is well behind that of other categories such as media, entertainment, technology and telecom.

The study didn’t explore why the tech product category scored notably higher but past studies concluded that some brands are facing challenges posting relevant, shareable content online that gains traction among key influencers.

An analysis of the food category, for instance, found that food brands in general had high sentiment scores both online and offline. But many food brands are “Whisper Brands,” performing below average among the 500 brands Engagement Labs tracks, due to low online and offline volume.

Another study found WOM scores by beverage brands, including Coke, improving because they’ve been better at engaging “everyday influencers.”

Both big box retailers and teen retailers earlier this year were found to perform better in offline WOM than on social media, notably Costco and Old Navy. Engagement Labs concluded that discussions around low prices and deals seem to be strong drivers of positive face-to-face WOM.

DISCUSSION QUESTIONS: Why do tech products rank particularly high among retail categories in driving both offline and online word of mouth? Are certain retail categories as well as retailers themselves inherently challenged generating online conversations?

"Tech products are more exciting than most and that’s why there is WOM buzz around them."
"Lots of brands fail with WOM because they haven’t learned how to act like a human."
"Tech products usually come with a higher price tag which makes customers more risk-adverse."

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21 Comments on "Why are so many brand categories woefully bad at word-of-mouth?"

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Shep Hyken

Many tech products are sizable investments — hundreds and sometimes thousands of dollars. Consumers research and look at reviews much more than other products (such as food). I’ll take a chance on a new food item that costs less than $10 without looking at consumer reviews. But I want to research and read what others think of that new 70″ TV I’m considering for our home.

Phil Chang

Tech is a hot category and always has fancy things to say about how it will change the world. This lends itself to a compelling word-of-mouth campaign. As exciting as pain relief can be, the folks that are talking about the benefits of Naproxen vs. Ibuprofen just aren’t going to be as exciting or compelling as those saying how the iPhone can now recognize your face. Tech also reaches the young and the old, and makes for compelling dinner party conversation.

Having said that, the encouraging parts of this are that unconventional marketing is on the rise and marketers are breaking out of traditional mediums to meet the consumer. Technology has changed how retailers and brands can reach the consumer, so it’s important for marketers to continue to reach out and build those ties.

Health and OTC categories are probably going to be fairly challenged in building online conversations because of the context required to clarify and talk about the benefits of medicinal properties.

Lee Peterson

Tech categories have an inherent advantage because they understand the attention economy better than traditional brick-and-mortar retailers to say the least.

That aside, you need to look no further than Amazon for the best in class at WOM. We used to call what they do “fake controversy” or “fake sensationalism.” You know; drone towers, floating blimps, second HQs, spaceships, etc. All that crazy stuff generates amazing WOM to say nothing of incredible press buzz. If you noticed, Walmart is now doing the same. It doesn’t matter that these things will never actually happen, what matters is that people talk about them. Again, the attention economy.

Bob Amster

Tech products are more exciting than most and that’s why there is WOM buzz around them. Similarly, foods appeal to the very powerful sense of taste and, therefore, word travels fast by mouth. All of this makes sense. A good question to ask is: are these brands that are not getting a lot of traction through WOM worth talking about in the first place? Are they as interesting as a new electronics gadget? Are they as alluring as Talent ice cream is tasty?

Stuart Jackson

Lots of brands fail with WOM because they haven’t learned how to act like a human. They still see customer engagement as a mechanical one-way street. When brands do take on human-like qualities in their social media engagement and value the kinds of things we do in all our relationships, then they are more successful at generating WOM.

Let’s be honest, creating brand advocates is not just about great products and services these days. It’s about making customers feel good about themselves, making it worth their while, making them feel smart and clever for discovering or being loyal to a brand. People want companies to be open, honest and, most of all, human. Every type of company can do this — there are no retail categories where it’s impossible.

Tom Dougherty

The answer is easy: brand clarity.

Word of mouth recommendation requires a focused story; a simple and easy means of conveying brand value. Because most brands are poor at this, it means rather than a single brand there are a thousand interpretations. This is fertile ground for lack of meaning.

Retailers have a particularly difficult time with brand clarity. Unless you are Walmart (cheap). Target has not figured it out. Macy’s CERTAINLY has not. A brand mythology based upon an experience is much more challenging than the value proposition of a product.

Is this an easy fix? Nope. Napoleon once said (about strategy), “If this were easy, it would be the product of mediocre minds.”

Kim Garretson

As a former Best Buy staffer, I believe tech products rank high not just because of high cost, but also because of crazy short cycles of rolling out new products, versions, upgrades, etc. Unless the consumer consumes all of the tech blogs and media they can’t keep up, and often they don’t know when the next launch is and if they should wait, if they should go for the retiring model, if they will regret that and so on. So they turn to trusted friends who do stay on top of the tech product news.

Cathy Hotka

I agree with my colleagues. I’ll also offer that customer engagement isn’t in the “muscle memory” of many brands, so it’s a new skill they’ll have to acquire. Expect some interesting experiments as brands come up with new ways to build buzz.

Adrian Weidmann

It all comes down to financial exposure and risk mitigation. The higher the financial cost, the higher the risk. Consumers will do far more search, research and investigation (Google’s ZMOT) for products and services that cost more and are viewed as an investment. Commodity items simply don’t warrant the time to investigate. Consumers of these commodities will simply buy and try. If they don’t like it, they just won’t buy it again.

Investment, on the other hand, will demand far more research and validation. That validation will come from customer reviews and WOM. These have far more value than promises (typically inflated and misleading, if not downright false) made by the brands themselves. Can your product or service go viral? That is a lofty goal and one brands should aspire to!

Joan Treistman
I agree with others about the tech category. I’ll add that consumers acknowledge greater risk with tech products and wish to mitigate that risk. It’s not just about the actual dollars spent but also the desire to learn more about how the product will benefit the customer. There are so many aspects of a tech product to discuss and digest so it makes perfect sense to me that they would rank highest with regard to offline and word of mouth. I think food products, unless revolutionary and contributing to a person’s overall health or appearance, are not that risky for purchase, trial and consumption. So yes, I think there are categories that are not as likely as others to generate WOM. My experience with online conversation makes me skeptical. And I’m interested in the experience of others. One of the first clients who asked me to use their “fans” for a survey led me to people who were fans but were not users/buyers in the category. It was a disaster. So I’m reluctant to think… Read more »
Ian Percy

In a university lecture many years ago I heard Canadian philosopher Marshall McLuhan say that “You can’t preach the Gospel over a microphone.” That, of course, is a metaphor for his famous “The medium is the message” philosophy.

I wonder if, in our obsession for avoiding direct human relationships in favor of conveying information through technology, we are supporting McLuhan’s supposition or overturning it. Of course technology outsells other items … it’s technology! That’s like asking why water in the desert is a bestseller.

We’re hitting a spiritual watershed, I think. We have no reason to trust online “WOM” (a euphemism if there ever was one) about a product. As we heard in the net neutrality discussion, literally tens of millions of online comments were totally phony. Shocking I know, but not even Amazon reviews are squeaky clean.

We need to get back to Word of MOUTH, not word of clicks. And yes, I know how obsolete that sounds.

Joy Chen

Tech categories rely heavily on WOM. It provides authentic feedback on product performance. When the product is more expensive, WOM is more important in driving sales. For example when I buy a cleaning product, I make a decision at the shelf, not because of WOM. As for other categories like beauty, the key driver to sales is influencer marketing — having products recommended by beauty experts.

Ricardo Belmar

Tech products are inherently interesting and have a built-in “wow” factor for most consumers. That makes it difficult to duplicate the word-of-mouth effect in other categories based solely on the product. Retailers that focus on the experience of using the product in other categories rather than the product itself will capitalize on word-of-mouth better than others both online and offline. For example, just look at Sephora and Ulta Beauty in the beauty products category. Consumers crave interesting experiences to talk about products rather than just the product itself!

Cate Trotter

Tech products usually come with a higher price tag which makes customers more risk-adverse. It’s easy to risk a new flavour of crisps and to form your own opinion because they only cost a very small amount. If you’re going to spend hundreds of pounds on a tech item that you may have for a number of years, you’re going to want to do your research and word-of-mouth — whether from friends or online — is part of that.

What’s interesting to consider are the categories that have both luxury and discount offering, such as beauty. Again, you might not think anything of trying another high street mascara, but you’re likely to turn to reviews or word of mouth for a luxury version at a higher price. Generally though getting better at word-of-mouth comes down to understanding your brand and your positioning. For some categories, even if customers strongly recognise your brand they just don’t need word-of-mouth to make their buying decision because it’s based on something else (price, offers, past experiences etc).

Brian Kelly
1 month 9 days ago

Perhaps its not the category marketing miss but rather consumer category behavior or the methodology.

Offline/WOM + Online/Social = Buzz, is the Engagement Lab methodology. YouGuv is different.

Consultative sell or infrequent purchase categories over index. (Tech, automotive.) New categories, at life stage shifts, also over index. At this time, leading edge Millennials (marriage, first child, home ownership).

The difference between paid social vs earned social might be good to better understand.

I always want to know how methodology within the “black box” creates these data. Category behavior is different than retail behavior and that difference is often times missed by those who create the “black box.”

Ralph Jacobson

Why do people talk about tech products? Because aspirin is boring. This is all about human nature. Right now, tech is still exciting to most, so it it more prevalent in WoM advertising. Just like certain categories are slower to be adopted into online commerce, so will those be lower in WoM presence.

Brian Kelly
1 month 9 days ago

Here is a very different take on engagement and retailers in particular.

Doug Garnett

Studies show an interesting truth about word of mouth. The biggest driver of word of mouth is television advertising. The above chart may reflect ad spend more than anything.

And that makes sense. People have to know why they would care to share. Advertising adds an extra advantage: Advertising lets you explain to people what it is that’s important enough to share.

Sometimes word of mouth is viral — but usually it’s not. These days, the only viral successes are set up with extensive paid placement to get them started.

So the more critical question seems to be this: WHAT is the role of WOM in retailer marketing and what other spending is most critical for creating WOM pass along?

Carlos Arambula

It’s a lack of evolution from decades old marketing practices. Technology companies by nature have to constantly evolve and that permeates the company mentality — especially marketing.

Min-Jee Hwang
Word of mouth has a lot to do with emotion. A product that makes you feel something is one you’re much more likely to talk about, whether that be on social media or in person conversations. Tech excites consumers. The capabilities and hacks are something that potential buyers want to know about. Online chatter needs to be genuine, so brands must think about what makes their products stand out to customers. One brand that broke the mold is Hamburger Helper. It used to be a food brand that most consumers didn’t pay much attention to, but they had the perfect (and definitely unexpected) April Fools joke a few years back. They dropped an album “by” their mascot and social media went wild for this branded and novel content. This got consumers talking about them. Even if they weren’t going out to the store to buy a few boxes, all of that online press showed that they could create buzz in such a social media focused era. My advice to brands: find a timely and original… Read more »
Seth Nagle

Tech does an amazing job of creating messaging around their products such as reviews, specs, and comparisons. All the consumer has to do is click a few buttons and their experience can be shared across a variety of digital channels.

CPG brands don’t really have the same type of messaging. When was the last time you looked up reviews for a Chobani Yogurt?

With the review/socially engaged guru Amazon in the mix though, this could change across the CPG/retail grocer industries.

"Tech products are more exciting than most and that’s why there is WOM buzz around them."
"Lots of brands fail with WOM because they haven’t learned how to act like a human."
"Tech products usually come with a higher price tag which makes customers more risk-adverse."

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