Word-of-Mouse vs. Word-of-Mouth Advertising

The unwritten rules of marketing have changed in recent years, as inbound marketing methods have become a desired option for businesses over traditional methods such as direct mail, telemarketing, etc.  There has been debate on whether this new way of marketing is here to stay, and if it is positively or negatively affecting consumers’ buying decisions.

One of the primary stages of the buyer decision process is the information search stage, which may include actively using public sources, such as the Internet, or personal sources; i.e., consulting with friends, co-workers, and family members.  While recommendations from a trusted source can certainly influence a buyer’s decision to purchase (or what to purchase), this type of word-of-mouth influence is now rivaled by “word-of-mouse,” or “word-of-Web,” influence.  A number of growing websites, for example Yelp, Twitter, Urbanspoon, and Zagat serve as online guides that post customers’ reviews of businesses and professionals, ranging from very small to large businesses such as restaurants, clothing stores, and spas, to medical and healthcare professionals, academic professors, lawyers, etc.  While both types of sources can aid in expanding a business and building a brand, word-of-mouse can lead to greater consequences for businesses receiving poor reviews.  The reliability and quality of information is also an issue that divides the two types of sources.

Word-of-mouth, as we all know, is a form of personal communication channel that can have considerable effect in many product areas.  Personal influence carries great weight especially for consumers in the market for products that are expensive, risky, or highly visible1.  Few consumers today are buying a big-ticket item without knowing exactly what existing users have to say about the product.  The same goes for restaurant goers, gadget-lovers, bargain shoppers, you name it.  Surveys of purchasing influences support that buyers tend to trust recommendations by a relative or friend; “one study found that 90 percent of customers trust recommendations from people they know and 70 percent trust consumer opinions posted online”1.  All that being said, it is clear that buyers can be influenced heavily by word-of-mouth reviews and recommendations, either positive or negative.  From a business perspective, customers with positive experiences will spread the ‘word’ to their network of friends and family members, which can be good for business.  Folks who have had bad experiences can share their story as well, but will be limited by their personal network—a plus for businesses looking to avoid the “kiss-of-death” associated with bad reviews circulated online.

Word-of-mouse, on the other hand, is not only a play on words, but also a source of communication publicly-available online that can make or break a business given its far-reaching and lasting consequences.  While word-of-mouse advertising can be categorized as a key trend driving business, capable of creating fast connections with customers and building ongoing relationships, negative reviews posted online can quickly end customer relationships before they’re even established!  Businesses don’t typically post or manage the posting of online reviews, and those with poor online ratings (generally, about 40 percent of all reviews are negative1) can suffer losses in sales and goodwill as a result.  It can be frustrating for business owners (especially small, local business owners) who have no control over the filtering of subpar reviews, especially from critical shoppers who require a seemingly unobtainable level of service.  From a customer standpoint, the ability to find reviews of a local business or popular brand can be a useful when making purchasing decisions; however, finding reliable information online can be difficult, which is consistent with customers’ tendencies to trust recommendations from known sources.  Also, one could argue that businesses have upped their service levels in recent years, as they are now at the mercy of their customers’ reviews—again, a plus for customers.

In terms of the quality of information, word-of-mouth is a better option given that the source is presumably a reliable one who is perhaps concerned with the review seeker’s personal benefit.  For example, it is unlikely that someone would recommend a subpar physician to a friend (I’m not referring to your ‘Facebook-only’ friends here, people). Conversely, an online review of a physician may be unwarranted and could be lined by ulterior motives, but might be true.  The point is, the variability associated with word-of-mouse reviews diminishes its validity.  On the flip-side, word-of-mouse is capable of spreading a good idea or business concept quickly, and provides an opportunity for businesses to establish and sustain long-distance relationships with its customers.  For instance, Panasonic and other businesses in the tech-world have had success in the past taking advantage of using Internet bloggers as a technology-based marketing tool.  Said one Panasonic spokesperson, “When you give bloggers equipment and they love it, just like any other consumer they’ll evangelize it”1.  Word-of-mouth communication, on the other hand, is limited by personal networks; i.e., friends, family members, and co-workers.  For businesses receiving consistently positive feedback from its customers, word-of-mouth may limit the ‘buzz’ surrounding their products or services.

Both word-of-mouth and word-of-mouse sources can assist businesses in spreading positive ‘buzz’ surrounding their products, but word-of-mouse communication can lead to greater consequences given its far-reaching capabilities.  Buyers using word-of-mouth as a source for information tend to trust recommendations, as they are coming from a known source; on the other hand, word-of-mouse communication can be unreliable in nature given its anonymity.  From a customer perspective, finding reliable information is key to maximizing the benefits of either information-gathering methods.  For businesses looking to engage its customers, the Internet is a powerful tool that can create brand conversations and involvement; harnessing it as a technology-based marketing tool is key to combatting the negative effects of word-of-mouse.  Failing to do so may result in a missed opportunity for creating a competitive advantage.  The unwritten rules of marketing have not only changed, but will continue to evolve; as they say, “Adapt, or die!”

1 Kotler, Philip. Principles of Marketing. 14th ed., 2011. Print.

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