Jul. 26, 2007

The Facts on Word of Mouth

By John I. Todor, Ph.D., The Whetstone Edge, LLC

Word of Mouth is important to business—right?

But just how important?

McKinsey & Company says it drives two-third of industries.

The London School of Economics says strong customer advocacy on behalf of a company is one of the best predictor of top-line growth.

Recent research by the Keller Fay Group is producing some very interesting results about the dynamics of word of mouth. They use a single-day diary system called TrackTalk to collect data on word of mouth activities from consumers in the USA.

Here are three finding that will surprise some:

  • 70% of word of mouth occurs "face-to-face" and only 8% occurs online.

  • Overwhelmingly, consumers have positive things to say about brands by a margin of more than 6 to 1.
  • 78% of consumers rank word of mouth as credible at a level of 7 or higher on a 10 point scale.

Here's my spin on these findings.

Word of mouth is emotionally triggered and emotionally driven. Both the triggering and the emotional expression are harder to achieve online.

We like to help friends and associates have better experiences and therefore are more likely to passionately talk to them about it. Sure we like to vent about bad experiences but from a social interaction perspective, the negative is less appealing to the recipient.

We trust word of mouth because the person telling us puts the experience in a context that is meaningful to us. Since the peer-to-peer relationship is based on trust, the message is credible.

Word of mouth is a powerful source of influence. While businesses may not be able to manage it, they can stimulate, harness and amplify it.

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John I. Todor, Ph.D., is the managing partner of The Whetstone Edge, LLC, a customer-centric consulting firm that helps clients build customer equity by engaging customers online via social media and delivering compelling offline customer experiences. He is the author of Get with it! The Hands-on Guide to Using Web 2.0 in Your Business.
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