What is Word of Mouth Marketing?
Each year, organizations waste millions of dollars using traditional marketing on millennials. Instead, companies should focus on word of mouth (WOM) marketing, defined by Dr. David Stokes and Dr. Wendy Lomax as “all interpersonal communication regarding products or services where the receiver regards the communicator as impartial.” Once initiated, WOM marketing is essentially free and according to Dr. Christy M.K. Cheung, WOM marketing is the most effective way to reach millennials.
People trust other consumers. Cognitive costs, such as the fear of spending money on a product they will not like, keep consumers from purchasing a product. When people see or hear positive reviews for products, their cognitive costs are likely to decrease, as they feel that if others like them enjoy a product, they probably will too. By reducing cognitive costs, WOM marketing makes consumers more likely to purchase an item.
Why Word of Mouth is Important Today
The rise of the Internet and the millennial generation in the United States changed the way companies market their products. Millennials are skeptical of information that comes from companies. Instead, their peers influence them the most.
In April 2016, they officially surpassed baby boomers as the largest generation in the United States meaning that the buying power will soon shift from baby boomers to millennials. If organizations who rely on millennial purchases do not reach millennials, they could go out of business.
Born between 1981-1997, millennials were the first generation to grow up with the Internet. Because of this, they turn to social media to gather and give information. They are more willing to review products, give feedback, and promote brands.
In a recent study W. Glynn Mangold and Katherine Taken Smith asked millennials how often online reviews influence them. On a scale of zero, meaning never, to ten, meaning very frequently, the mean score was 8.45, with 28% answering with a ten, showing the importance of WOM marketing.
How to Initiate Word of Mouth Marketing
In order to use WOM marketing, organizations have to get the conversation started. While it is important that WOM marketing comes from a source independent of the organization, there are many ways to get millennials talking.
- Provide Incentives
Because millennials are easily influenced by rewards, offering something small, such as a coupon, increases the chance that they will write a review. A small 3-star hotel utilized this tactic to get customers to fill out comment cards. The hotel then sent the cards to the travel agencies that those customers booked from. Because the feedback came from customers who used the same agency, the comment cards gained credibility. Without a reward, people would have been less likely to write a review.
2. Utilize Unintentional Word of Mouth
When Hotmail users send an email, a message on the bottom says “Get your private, free e-mail at htpp://www.hotmail.com.” If the receiver needs a new email address, this short, free message might persuade them to use a Hotmail account. The senders do not intentionally spread the word, but it is just as credible for their peers to see.
3. Personalization is Key
Millennials respond well to personalized messages, which contribute to their brand loyalty and, in turn, increases the likelihood that they will talk about the brand. If millennials feel that the company cares about them, they will engage in WOM marketing, as seen in Coca-Cola’s Share a Coke campaign. Coca-Cola printed common names on their products, which made millennials feel like the brand cared about them. Consumers shared Coca-Colas with their friends and the Share a Coke hashtag has been used over 600,000 times on Instagram, as of April 2016. By making the product personal, Coca-Cola earned free marketing.
4. Utilize Search Engine Optimization
Review websites such as Yelp can help the WOM marketing process. However, if the organization does not come up on the first page, millennials are less likely to review or even view the page. By using search engine optimization, companies can get on the first page, increasing the likelihood WOM marketing.
5. Create Shareable Content
According to researchers Henry Jenkins, Sam Ford and Joshua Green, millennials share funny, inspiring, and emotional content. If organizations create this content, millennials will share it with their friends. The Honest Company, founded by actress Jessica Alba to make healthy products for babies and mothers, is a great example of this. Their Instagram showcases funny sayings that new moms send their friends, providing more exposure for the company.
Andrews, T. M. (2016, April 26). It’s official: Millennials have surpassed baby boomers to become America’s largest living generation. The Washington Post. Retrieved April 27, 2016.
Bruyn, A. D., & Lilien, G. L. (2008). A multi-stage model of word-of-mouth influence through viral marketing. International Journal of Research in Marketing, 25(3), 151-163. doi:10.1016/j.ijresmar.2008.03.004
Cheung, C. M., Lee, M. K., & Rabjohn, N. (2008). The impact of electronic word‐of‐mouth. Internet Research, 18(3), 229-247. doi:10.1108/10662240810883290