Offline WOM Still Where It’s At
By Tom Ryan
Despite all the attention
given to social networks, the medium doesn’t appear to be driving consumer
purchases yet. According to a survey of consumers by Mintel,
only five percent bought something based on the recommendation of a blogger or
a chat room. Leading was the referral from a friend or relative (34 percent)
or spouse/partner (25 percent).
"People aren’t going
online to get a recommendation from a blogger or
a social network," Chris Haack, senior analyst at Mintel,
told MediaPost’s Marketing Daily. "It’s
probably a bit of a trust issue. You can’t have the same level of intimacy
online as you can in person."
The study found that
young adults who are more likely to use social networks are not surprisingly
more likely to use the internet for advice and referrals. It also found that Asian
and Hispanic consumers – also more active in social networks – were
more influenced by bloggers to purchase a product
or service, at 14 percent and 10 percent, respectively. But personal recommendations
still held more influence across demographics by a wide margin.
"The sheer number
of people that purchase based on recommendations proves marketers need
to pay attention to word of mouth," Mr. Haack said
in a statement. "It’s becoming easier for businesses to lose control
of their marketing messages, so companies need to carefully monitor and
respond to consumer conversations about their brands."
Despite the power of
person-to-person recommendations, Mr. Haack told Marketing
Daily that the internet’s social tools shouldn’t
be ignored. The most active people in the social networks tend to also
be the
"influentials," who are
more likely to recommend products and services, Mr. Haack noted.
"It’s definitely
worth reaching out to them," he said. "For the first time in
history, marketers can have a real-time tracking of their dialogue with
consumers. It would be [foolish] not to take advantage of it."
Discussion Question:
Given the trust issues, are marketers overestimating the potential of
consumer blogs and social media to drive purchases
and build brands? What can retailers do to drive more offline WOM?
Facebook is the essence of word-of-mouth. A person becomes a fan of a brand, a store, a group, what have you. That immediately shows on their status to all of their friends who may click to see what it is. That word-of-mouth via social media helps drive intent which may not be the same as looking to purchase searches but is much easier to measure and influence than ever before. With nearly 23 million FB users and 30% of US households using it as their home page, marketers deride it, I believe, at their own peril.
In trying to measure the effectiveness of product recommendations via bloggers and online forums, Mintel’s analysis is somewhat flawed. They have asked consumers whether or not they are influenced by these online recommendations, and the consumers respond that they are more influenced by face to face WOM, from people with whom they know and trust. But the follow-up research would need to ask the influencers where they are getting THEIR information.
Research indicates that influencers tend to be more apt to try new products, and the new products are selected based upon research that is done online prior to purchase. When the research is executed by these influencers, it has been shown that bloggers and forums are one of the sources that influencers use in choosing their product selection for trial.
Retailers and manufacturers should be cautious about putting too much stock in Mintel’s findings. Knowing that there are over 200 million Facebook users sharing personal preferences online, not focusing on the online WOM would be a strategic error.
Two points:
1) This will change over time as consumers who grew up with these media become a larger percentage of the market.
2) I don’t really see how online WOM is any different from offline WOM. It is still all about trust. If I trust a recommender, I will value that person’s opinion. If anything, the trust is even harder to gain online. I either need to know the person from the real world, or it needs to be someone who I believe for other reasons, such as the “Stuff we aren’t paid to endorse” section of the Freakonomics blog (and whatever the equivalent blogs are for consumers in other interest groups).
Social media marketing is the same as word-of-mouth. It’s difficult to accurately measure its results. Intuitively, it seems like the way to go, however, once viral marketing starts to look too much like masked advertising the concept will become less effective.
I read the findings in the press release to mean that we prefer taking recommendations from people we know than from people we don’t know. That’s not surprising, but still important to consider in the face of Facebook fervor. Everybody is not linked on online social networks to everybody else with equal strength.
Still, as far as I can tell from the sparse details in the Mintel press release, the findings don’t reflect the relative importance of face-to-face versus online recommendations. We might very well be getting our most powerful “referrals from a friend/relative,” etc. online rather than face-to-face.
I recently completed a research project focusing on the food shopping attitudes and behaviors of the older members of Generation Y (23 to 32 years old). When it comes to social networks usage by this group the results are as follows:
Facebook = 63.4%
MySpace = 46.6%
LinkedIn = 16.8%
Twitter = 8.8%
Do not participate = 22.7%
Further when asked how they are using these networks, they responded as follows:
Keep in touch with family and friends = 96.1%
Share pictures = 61.9%
Develop new relationships = 26.0%
Complain about faulty products or bad service = 11.4%
Get advice on products or services = 10.7%
Find a job = 8.2%
These results seem to underscore the potential influence of social networks and their influence on attitudes as well as behavior.
In essence, the Internet, in general, and these social networks, in particular, have allowed every user to engage in “best practices sharing” when it comes to buying goods and/or services. The “wired” food retailer who monitors these sites is in the position to strengthen and in many cases, to develop a relationship as a caring, responsive marketer.
I agree with the comments made so far. What I would add is the perspective of the categories that are most impacted by recommendations. For example, the consumer deciding about a new TV will probably seek out more opinions and reviews than the person buying salad dressing. If your friends haven’t bought a Kindle you might look on line for a review.
Social media is evolving. Word of mouth has been around a long time. As the two intersect their influence on purchase decisions has to be examined by marketers.
Years ago when Corona established itself through word of mouth, marketers around the country tried to replicate the phenomenon. They were not successful.
Understanding the dynamics of the marketplace is what helps marketers made wise decisions. As long as they pay attention to what works and what doesn’t, where promotion can be effective and where it can’t they are building a foundation for effective strategy.
Grabbing on and not letting go to the latest new possibility in social media without understanding how it can impact your business seems like a waste of time and money. The transparency and speed of communication in social media doesn’t forgive false starts or false positioning.
Mintel’s PR is provocative, but misleading. It is correct that more credibility is put in people we know. However, a look at Social Networking and demographics show that as the demographic get younger, Social Networking is much greater related to people we know. The Millennium Generation puts great credibility in their online social networks. They see no difference with in-person or online connection. They are more likely to seek information from their broad social network than from one-on-one connections.
I am sure there are marketers out there that read the Mintel study with a sigh of relief. But, to accept it with any value would be a grave marketing error, unless you were marketing uniquely to an older, i.e. Baby Boomer demographic.
Lots of great comments already and I agree that trying to segregate online from offline is fairly specious–as people we take our experiences, opinions, friendships and relationships cross channel without thinking about where they originated.
The point I take away from all of this is consistent with our research–personal experience and the experience of friends and family is most salient. Ratings and reviews from people come next–probably in part because I can usually read more than one and form my own opinions by reading between the lines.
Over time, I may develop relationships with outside bloggers and other influencers I trust and then their opinions will have even more sway. Every influencers has his or her circle of people with whom he has developed a trusting relationship but looking to the influencers to provide instant scale is in most cases, not a realistic expectation.
Positive word of mouth online or offline is an outcome of doing a lot of other things in your business right–Retailers should focus on delivering valued products and services, giving their customers tools to share it online and offline and should measure it to understand where they’re delivering and where they’re falling short.
Social media, like any viral marketing, doesn’t just happen because you blog or twit. It’s what the conversation is all about that’s key. Word-of-mouth works when people have something compelling that they want to talk about. For me it goes back to passion and personal relationships. Those retailers who are able to connect personally with customers on the basis of a shared passion will experience the buzz from social media, just as they experience the buzz from word-of-mouth.
“People aren’t going online to get a recommendation from a blogger or a social network.” I could not disagree with this more.
The press release states, “a survey of consumers”–consumers from where? Were they gathered online? Was it phone survey? What was the demographic of the respondents? If the respondents were using web technology then I guess that makes their findings more credible. But if the survey was given to those over 50 years of age, with no online shopping history or connections to social networking–then the results are not surprising.
People DO get recommendations from social networks. Every day. Most web-savvy consumers who make the majority of their purchases online, and in even in bricks and mortar, research first online. They ask their networks on Facebook to see what someone else has bought or recommends. They do read their favourite bloggers, daily for heavily involved participants in online activity, and feel just as close to these bloggers (whom they may have not even met in person) as they do to their friends down the street or coworkers whose opinions they would trust to support a purchase. I believe the whole Mommy-blogger phenomenon is built and supported by this premise.
I would argue that those who use social networking and chat rooms probably get most of their initial recommendations this way and then use in-person, informal WOM to support their purchase. I will go further and suggest that we as consumers might not even be aware of how much we are influenced by online commentary and therefore when asked to recall where we received a recommendation for something we purchased, we cite the in-person exchange rather than the online nudge we may have received early in our search for knowledge about said product or service.
My thanks to Richard George for enriching this discussion with some quantitative data that goes beyond the speculative ramblings in posts like some of mine. I don’t know that I agree with his conclusion, though. The data seem to reflect a relatively minor role of the social networks for getting advice on products and services. Perhaps Richard is saying there is a potential opportunity for the population targeted in his survey because the current usage is now at only about 11% for complaining and for getting advice for purchases.
On a related note: I’d be interested in a crosstab of service by purpose. My guess is that LinkedIn is used much more often for finding a job than is Twitter, for example.
Let’s face it, as marketers we like what’s hot and sexy. We don’t want management or clients to think that we aren’t up on and working with the latest and greatest. Blogs, Facebook and Twitter are new, plain old in-person word of mouth and its influences on buying is not.
To ignore ‘Word of Mouse’ and its growing impact would be foolish, but so would forgetting about the tremendous credibility delivered in the face-to-face comments from a friend or co-worker about a product of service.
If we are really going to more than just debate, what we need to do is focus on the source that’s driving all customer opinions and comments: the TOTAL Customer Experience. If we understand the customers’ rational and emotional reactions to the product, the servicing, the image, the store design, etc. at each interaction customers have with our brand, then we can better communicate and more efficiently improve what’s most important. More positive online and in-person comments and recommendations should follow.
Recent research indicates that 90% of all Twitter messages are sent by 10% of users. Thousands of those who join use it once and never again. Millions more refuse to wade in the sewer of vicious, non-credible, uninformed, ranting, poorly-communicated blogs, forums, and chat rooms that by their very nature encourage negative input. Individuals endorsing brands on Facebook lower their level of trustworthy commentary to that experienced on eBay, Craigslist, Amway, or from a personal injury attorney.
The argument in one comment today that endorsements from online contacts whom they don’t know (but for some reason trust anyway) is no more than a thin rationalization for being lazy in one’s research. And, the argument that as current Tweeters, bloggers, and Facebookers grow older, online personal recommendations from strangers will grow more influential is specious and shortsighted. Let these youngsters get a job, take on responsibility, and start families–resulting in a steady exodus from Slackerville. Social media marketing quickly ceases to be the equivalent of WOM (if it ever was). Think about it: The main characteristic of (or validation for) social media marketing seems to be the immaturity of its users. When people mature (and gain greater purchasing power), influences change drastically.