By George Silverman
President, Market Navigation, Inc.
Note: This article was written in the early 1990's, over a decade before I wrote first edition of my book, The Secrets of Word-of-Mouth Marketing. It was pretty prophetic. It's included here not only for its historical interest, but because it still remains a pretty good summary of word-of-mouth marketing.
Marketers are overlooking the obvious. Word of mouth is far and away the most powerful force in the marketplace. Yet, it is the most neglected. Companies have vice presidents of sales, advertising, and marketing. But there is not a single vice president of word of mouth in any corporation in the country. Why? [Note: there are now some people with titles pretty close!]
Presumably, because most people think that they cannot do much about word of mouth. Most marketers believe that word of mouth is out of their control. They believe that it can be influenced, to be sure, by advertising and other marketing media, but cannot be influenced directly.
The obvious thing that they are overlooking is that word of mouth can be harnessed. It can be directly influenced, causing — under the right circumstances — a stampede of customers to your products that cannot be stopped by your competitors.
Chances are, your product is more influenced by word of mouth than anything else. You and your competitors put huge amounts of information into the marketplace in the form of marketing materials, events, and salespeople. The illusion is that these things directly influence sales. The reality is that all the while, your customers are talking over that information and helping each other decide what to do. Word of mouth is the reality that intervenes between your communication and sales.
Word of mouth is more credible than your most sincere salesperson. It is able to reach more people, faster, then advertising, direct-mail, and even the Internet, because it can spread like wildfire. It breaks through the clutter better than anything:
“Even those deaf to the bragging cries of the marketplace will listen to a friend,” as one highly successful marketer put it.
Even more important than its credibility, reach, speed and ability to break through the clutter, is its ability to get people to act. In study after study, with almost every category of buyer, word of mouth has been shown to be what is known as the proximal cause of purchase — the most recent thing that happened just before purchase. In other words, the purchase trigger.
People tend to make purchases on the advice of trusted peers or experts.
Even more amazingly, word of mouth happens spontaneously, without you having to be there, and, unlike your other media, it doesn’t cost you a dime.
If you could only harness it..
How to harness word of mouth
The idea that word of mouth cannot be controlled as one of the biggest marketing oversights. It will surprise most marketers to find out that word of mouth can be controlled at least as much as advertising, salespeople, public relations, coupons, samples, promotions, and other marketing media and tactics. (Most things in life cannot be completely controlled!)
So how then do we harness word of mouth?
First, there is a lot more about this strange and powerful force than is generally understood about it. We have to know the nature of the beast before there is any chance of taming it, harnessing it, and directing its power. Then we have to have a way to monitor and track it, to sneak up on it and observe it. Then, and only then, can we learn how to speed up, change its direction, and turn it into a stampede toward our product.
Stalking the beast: what is this strange creature?
Word of mouth is one of those things that everybody thinks they understand, yet realize soon that they are talking about a different part of the elephant.
By “word of mouth” I mean informal communications about products, services or ideas between people who are independent of the company providing the product or service, in a medium independent of the company.
In contrast, advertising is a communication of a message that you originate, in a medium that you own or rent. A sales message is a “company line” delivered by representative of the company. Word of mouth is originated by a third party, transmitted spontaneously in a way that is somehow independent of the party being talked about. So in word of mouth, both the message and a medium are independent. In that sense, public relations is actually one form – by no means the only form – of word of mouth.
What makes word of mouth so powerful?
It is this independence that gives it much—though, as we will see later, by no means all—of its power. If you ask most people why word of mouth is so powerful, they will tell you that it is because of its objective, independent, “no axe to grind” nature. Why is that so important? Because a decision maker is more likely to get the whole, undistorted truth from an independent third party then someone who has a vested interest in promoting your point of view. It is this unique credibility that gives word of mouth much of its power.
That explains why word of mouth is often negative. It is the only place where the decision maker is likely to hear about the negatives of the product. So when people ask someone about a product, they are likely to ask, “Had any trouble with X?” Because they know that it is the only source of information where they are likely to get a straight answer.
Another reason that word of mouth is so often negative is that people are three to ten times more likely to tell others about a negative experience than a positive one. Many studies have shown that a satisfied customer is likely to tell approximately three people, while a dissatisfied customer is likely to tell approximately 11 people. This is because the positive experiences are expected and soon forgotten, but the unresolved negatives get people angry and frustrated, energizing word of mouth. Studies have also shown that unexpected extraordinary service also causes strong positive word of mouth. In fact, some of the strongest and most frequent word of mouth results when a dissatisfied customer is turned around by an extraordinary response to their expression of dissatisfaction.
So, as we have seen, word of mouth can be a positive force because of its credibility, but often destructive because of its negativity.
The unknown reason why word of mouth is so powerful
But there is another reason why word of mouth so powerful. This reason is even more important and useful than word of mouth’s independent credibility. It takes some explanation.
When the person is deliberating about purchasing a product, he reaches a point where he wants to try the product. Why? He wants to get real world, but low risk, experience in his situation. Up until then, everything is informal, abstract, somewhat removed from the real world. He has to know how the product “will actually work out in the real world.” He needs experience.
There are only two ways to get experience: directly or indirectly. Now you would think that direct experience—actually trying the product—is the best teacher. But it is the most costly in time, money, and risk of failure. Also, you cannot afford the time and money to try a new product directly too much, so your sample tends to be small.
Indirect experience—that is, hearing about other people’s experience—is actually much better in many ways: someone else is footing the bill and spending the time. You can pool the experiences of several people so as to have a greater sample. If the trial fizzles, their reputations are damaged, not yours.
All in all, indirect, vicarious experience is the better deal. Of course, it is not an either/or situation. You might try the product a little yourself and also talk with others.
By now, you probably see where I'm going with this. Talking with others about the product, comparing experiences and helping each other sort it out is one form of word of mouth. In fact, it is the most powerful form of this most powerful marketing force. It happens just at the point of maximum involvement, just when they are thinking about trying the product, just when they are making their crucial decisions about the product: Will it work? In my situation? Should I make a major commitment here? How should I interpret any negative experiences?
To summarize: the thing that gives word of mouth most of its power is the fact that it is an experience delivery mechanism. And it is successful experience that triggers full adoption behavior more than anything else.
Let me give you a quick example. Let us say a new drug comes out which holds considerable promise for helping to alleviate the symptoms of a disease. Physicians read the studies and talk to the salespeople from the company. That is how they know that the drug holds promise. But how do they know it will work out in actual practice? They try it on a few patients who have not responded well to existing drugs. These, of course, are the patients on whom the drug is least likely to be effective, but it is easiest to justify trial in these cases. Physicians typically try a drug on five of these refractory patients. One gets better, one stays the same, one gets worse, one has other possibly unrelated complications, and one moves to Florida. These results are uninterpretable, so he has to wait for five more low risk situations in which to try the drug. This typically goes on for years, until enough experience accumulates so that physicians can talk with each other and share success stories, tips, and suggestions for coping with problems, and other experiences that make the pool large enough for physicians to form reliable opinions. Then, and only then—after a few years have elapsed—the chain reaction reaches critical mass and explodes into enough word of mouth to cause to drug to grow rapidly into full usage, sometimes in a matter of months.
This pattern of acceptance is similar for most business-to-business, industrial, high-tech, and professional products. It is even true for many consumer products, especially those that are not easily tried. The time frame and other details may be different. But what is the same is the fact that it is the time it takes to accumulate enough favorable experience—and to communicate that experience—to make a reasonable decision is what determines a product’s success and the speed with which it is accepted. It is the content, speed, and sources of word of mouth that mediate the process and act as the accelerator or brake on the speed of adoption.
So, to summarize: speed of experience gathering determines the speed of product adoption. Word of mouth determines speed of experience gathering. Therefore, word of mouth determines speed of product adoption.
Other reasons why word of mouth is the most powerful persuader in the marketplace
There are some other reasons why word of mouth is so powerful. Even though you already know most of them, seeing them all summarized in one place will probably make you realize why word of mouth is even more powerful than most people recognize.
It is more relevant and complete. Word of mouth is “live,” not canned like most company communication. That means it is custom tailored to the people who are participating in it. People are not giving a pitch, they are responding to questions, though most important questions, the ones the decision-makers themselves are asking. Therefore, customers pay more attention to what because it is perceived as more relevant and more complete than any other form of communication.
It is the most honest medium. Because it is custom tailored, and because people are independent of the company, it is the most honest medium. And customers know it. Advertising and salespeople are notoriously biased and not fully truthful. The inherent honesty of word of mouth further adds to its credibility.
It is customer driven. Closely related to the above, word of mouth is the most customer driven of all communication channels. The customer determines who she will talk to, what she will ask, whether she will continue to listen or politely change the subject, etc.
It is a mysterious, invisible force. Despite all of its overwhelming power, like the wind of a hurricane or the neutrons of a nuclear chain reaction, it is invisible. It is sometimes called “underground” communication, or the grapevine. You see its effects all right, much more than likely it is due to your (or your competitors’) active promotional efforts. For instance, you take a bunch of actions, such as sending out a load of materials and ads launching a product. You see an effect in the marketplace. What could be more natural than to think that your action caused the effect? Actually, it is more than likely that your actions sparked a word-of-mouth chain reaction, and it was the word of mouth that caused the effects. Why should you care, as long as you get the desired effect? Because many products succeed despite the marketing supporting it, for different reasons than the product’s most-emphasized benefits. If the advertising and sales force were aligned with the word of mouth, you could have had a faster launch, at a much lower cost. It is what will go down the word of mouth channel—and be amplified by it—that should drive advertising and sales, not the other way around. This is a paradigm shift. It is the Copernican Revolution of marketing: Traditional marketing revolves around word of mouth, not the other way around.
It feeds on itself. Word of mouth is like a breeder reactor. It is self generating, it feeds on itself. It does not use up anything. If 10 people have 10 experiences, that is 100 direct experiences. If they each tell 10 people about their own experiences, that is an additional 1000 (indirect) experiences, which can be just as powerful as the direct experiences. If they each tell ten people, that is an additional 1,000 people who now have 10,000 experiences in their heads. And so on.
It does not take much time for everyone to hear about the wonders of the product, often several times each, which provides additional confirmation (“Everybody’s talking about.”).
Word of mouth is unlimited. A magazine ad, in contrast, may be seen by two or three people who read each copy. So, you have to use mass media to hit a lot of people, because it is limited to just the direct and pass-along readers. Word of mouth is unlimited. In theory, you could tell just the right fountainhead influencer, she would tell 10, who would tell 10, who would tell 10, who would tell 10, who would tell 10, who would tell 10, who would tell 10, who would tell 10. That is 100 million hits! Some topical jokes — I am thinking of some particularly tasteless O.J. Simpson and Hillary Clinton jokes — made the rounds like this (yes, actually starting from one person!) in a matter of a day or two.
It sometimes takes only one influencer to start a stampede. I call this the law of the fountainhead influencer. Of course, in real life, you would try to tell and convince dozens to hundreds of leveraged influencers, thereby increasing the chances of reaching critical mass to sustain the word of mouth chain and explosion. But more about this later.
Why are these fountainhead and leveraged influencers powerful enough to spark a chain reaction? Why don't they tell a few people about the product only to have the whole process peter out? Because they are luminaries, experts, gurus, and mavens. They each have a sphere of influence that may be worldwide, national, or local in nature. Their sphere of influence may number in the dozens up to the hundreds of millions.
These experts have one overriding attribute that gives them their influence: trust. People trust them to filter, distill, and objectively evaluate the overwhelming amount of information, make sense of it, and present it in a recommendation that is most likely to be right.
These tiers of experts and influencers tend to initiate word of mouth, sustain it, give it more credibility and supply the initial bang that can start the chain reaction of word of mouth.
For instance, I have several friends who like to discover new restaurants in the New York area. They read reviews of reviewers (one form of expert) who share their tastes, then fax my wife and I reviews of restaurants that seem to be worth trying. Often, they have already sampled the restaurant, so they can add a recommendation of their own. I know a few people who have never steered me wrong. So, when I need a restaurant in a particular area, I call them. They are my local influencers. The same with movies, novels, business books, computers, cars and so on. This phenomenon of people trying to review things and engage in word of mouth is the basis of the phenomenally popular (and wonderful) Zagat guides to restaurants and hotels. Notice the word of mouth endorsement in the previous sentence. The Zagat guides are an example of the rare phenomenon of word of mouth which is itself sold primarily by word of mouth.
Word of mouth becomes one of the product’s attributes
It is important to also notice that the recommendation by experts becomes part of the product’s attributes. Your favorite movie star or director may come out with a new movie. That is one plus. But is now it is recommended by one of your favorite reviewers, that becomes part of the product. It is now “two sums up” by Siskel and Ebert and four stars by Leonard Maltin. These endorsements and testimonials may be even more important than who is in the movie. Now, if three friends also loved it who share your tastes – especially if they have successfully recommended the movies you have liked in the past – you are going to see it. Notice that testimonials are a major part of almost all movie and book ads.
The important thing to remember here is that the “recommended by” becomes one of the product attributes, often the most important one.
Experts Like To Influence
It should be obvious by now that the source of the word of mouth is critically important. But there are some consequences of the importance of the source that are not so obvious:
One of the reasons that the initial stages of word of mouth are sustained and can be spread so rapidly is that influencers like to influence. That is one of the reasons that they are influencers. If they did not enjoy the process, they would keep their mouths shut and their keyboards still.
They like to talk with each other (and almost always report that they do not get enough of it), they like to influence non-experts, and they like to teach.
So, they are surprisingly willing and even eager to participate in the various kinds of word-of-mouth programs that I will describe later.
Word of mouth saves time and money
Another attribute of word of mouth is that it can be extremely efficient. If you want to buy a product that you do not know too much about, the best way is often to find a few people who have investigated the products, and piggyback on what they have found out.
Example: when I was looking for a supplier to put up my Website, I decided to “ask around.” The first person I asked was a friend and business colleagues who I have known for about 30 years. He has extremely high standards and is even more demanding that I am likely to be of this type of supplier. He told me that he had spent two weeks investigating Internet service suppliers. Prices were similar, but there were wide differences in service, particularly willingness to work along with customers who wanted to do things that no one had ever done before. He had found such a supplier and opened up an account. Since I was thinking about some innovative Web services, this sounded perfect for my needs. My friend warned me that the supplier had a lower level communication link that could potentially cause some bottlenecks, but recommended that I take the chance that they would upgrade soon.
To me it was a “no-brainer.” I called the supplier, verified the prices, and asked when they were going to upgrade their telephone lines. They informed me that it was about two weeks away. I signed up immediately, and had my WebSite up a few days later. They walked me through everything and could not have been better. The point here is that my friend saved me at least a few days (he had taken two weeks) of investigation. If a savvy friend with high standards thoroughly investigated and then had direct positive experience, why should I waste my time looking further? I could not go too far wrong (I can always which are my domain name to a different supplier), and I was extremely unlikely to find anyone better. Even if I could find a “better” supplier, it would only be marginally better. That would not have been worth even an extra minute of my time.
Examples of word of mouth programs and campaigns
There are ways of researching, causing, delivering, amplifying, and steering word of mouth in many different industries, with many different products, and many different kinds of people. Word of mouth works differently in every industry, but—as we will see—there are basic principles that can be modified and adapted for your industry.
Products are routinely made or destroyed by word of mouth. Some examples:
Lexus automobiles regularly conducts open houses for its customers. During a recall, the company contacted each customer individually and arranged to fix the car in the customer’s driveway or the parking lot of the customer’s business. This is an extraordinary customer satisfaction program that directly clauses word of mouth. In addition, the company sends multipage questionnaires to its customers, which not only assess customer satisfaction, but also cause customers to realize how satisfied they are.
Do you think that only a luxury, high profit car company can afford this? Then, how do explain…
Harley-Davidson conducts events around the country, often with the top executives of Harley attending, of course on their own “hogs.”
Netscape Navigator was built entirely upon word of mouth. They initially captured about 90 percent of the Web browser market before they took their first ad. They did it with a combination of giving away the first versions of their product and word of mouth, primarily on the Internet. The market was subsequently taken away from them by Internet Explorer.
Celestial Seasonings Herbal Tea: during their first years, their president, Mo Siegel, enclosed a note each box of tea with words to the effect that they are a small company that cannot afford to advertise. He asked people to tell their friends about his wonderful herbal teas or, better yet, to serve it to all their friends.
PackRat: (how word of mouth destroyed a product.) PackRat was probably the best personal information management software on the market. However, when they released their version 5, it did not work very well. Their loyal customers, many of whom were participating in a forum on CompuServe, tried to help each other through the problems, but then quickly turned against the product when many of them felt that they were not being dealt with in a straightforward manner. They started asking each other what the best product to switch to was, and most decided it was a product called Ecco. Many switched, told their friends, and PackRat was virtually dead while Ecco took off.
The Internet: probably the most important communication advance in human history—even more important than the printing press. It took off almost entirely on its own through word of mouth. No one owns it, it is no one’s product. People told people, who told people. An amazing phenomenon, especially when you think about it from the point of view of marketing. It took off with no marketing, not even a product!
Same thing with Google, Amazon, Firefox, Wikipedia, open source movement, etc.
Apple Computer: its customers became almost a cult. Apple computer is another example of companies—like Noxzema and Hershey—which did not advertise until very late in the game, and relied almost entirely upon word of mouth in the form of dealer recommendations and friends telling friends. [Added: Same with the iPod]
Laradopa: the story of L-Dopa had enough drama to inspire a film, Awakenings. No surprise then, that it stands as an extremely powerful word of mouth case study.
At its inception, Laradopa was viewed with high hopes by the medical community. It promised to remedy dopamine deficiency that was causing devastating effects in the brains of Parkinson’s disease sufferers. As with many “miracle drugs” however, there was the problematic issue of side effects.
Word of mouth threatened to tank this product before it had barely gotten off the ground: the scuttlebutt among physicians was that the side effects of L-Dopa were far worse than the symptoms it was meant to treat. Sales plummeted to one-fifth of their previous level.
Hoffman La Roche engaged me to develop a program teaching physicians how to use the drug effectively. Physicians’ negative word of mouth was revealed through focus groups. Then, group sessions with a prominent neurologist determined how physicians could learn to put L-Dopa to good use.
Through teleconferenced seminars, doctors were taught that all they needed to do was fine-tune the dosage and the promise of the drug would be fulfilled. Sales of L-Dopa jumped more than tenfold. There had been four competing manufacturers in the market, prior to my sessions. Two of them pulled their product off the market, reeling from the aftershocks of the powerful seminars.
Ocuflox: in this case, teleconferenced word-of-mouth sessions were used to transform a superior, but unheralded product, into a dominant market force.
In 1995, a new class of antibiotics was introduced for the treatment and prevention of eye infection. The first version of this antibiotic to reach the market was extremely successful. It seems that ophthalmologists were simply too comfortable with the existing drug to bother switching to Ocuflox, taking an “if it ain’t broke, don’t fix it” attitude. They had not been swayed by the improvements offered in Ocuflox.
That all changed when we implemented word-of-mouth sessions and doctors listened to four clinical investigators who explained the new frontiers in antibiotic use, and why the benefits of Ocuflox were so important. One of the more persuasive advantages was the greater penetration that Ocuflox achieves. It took the word of the mouth of respected professionals to move the doctors into action, and the product into his rightful position as the market leader.
Prilosec: Gastroenterologists were favorable towards this superior anti-ulcer and heartburn medicine. They knew it worked well, but a prominent FDA warning in the prescribing information gave them cold feet. What they needed was a positive signal from the most influential experts in the field, giving them the green light to use Prilosec.
We conducted a series of teleconferences with several of the most respected specialists in the country, together with expert clinical investigators. The information that came from these sessions convinced enough physicians to set into motion the largest sales jump in pharmaceutical history. The numbers exploded from 300 million dollars to 1.3 billion dollars.
What word of mouth can teach us about the rest of direct marketing
As you can see, I tend to approach all marketing from the perspective of word of mouth and how it can accelerate the decision process.
Let me take you on a very useful tangent for a few moments. The word of mouth orientation is just one perspective or viewpoint. There are many other places from which to view marketing, such as from the point of view of advertising, sales, promotion, etc. No particular viewpoint is more valid than any other. Orientations, viewpoints, perspectives, angles, and standpoints are just places from which to look at things from a particular perspective. On the other hand, the ideas and beliefs that come from looking at things from another angle, may be right or wrong, but the place from which you look is just that, only a place.
However, orientations differ greatly in how fruitful they are in helping us know and organize the world. Some are highly illuminating, such as “how would this look to a child, or someone who didn’t understand the field?” “How does this look from my customer’s point of view?” Some are singularly unfruitful lines of approach, or viewpoints: “how can I sell my product?” “How can I get people to use my product?” Unfortunately, these last two are the usual approaches to marketing, but they are narcissistic points of view. They are not wrong, but if they are our only perspectives, they tend to lead us to neglect the customer’s viewpoint, and therefore lead us into ineffective ways of marketing. They can be an invitation to put on blunders.
It is also worth pointing out that the only way to look beyond superficialities, to see through illusion and to create anything worthwhile is to look at it from more than one perspective. Walk around it, look from above and below, get inside it, imagine it differently, reinvented it, etc.
What does this have to do with my word of mouth orientation?
I am suggesting that you keep whenever orientations and perspectives have worked for you in the past, such as advertising and/or sales perspectives. In addition, however, I urge you to look at all of your marketing as a word of mouth generating system. If, for most products, it is the word of mouth that triggers the sales, is it not important to look at what triggers the word of mouth? What if all elements of marketing, such as sales, advertising, direct mail, etc., were not oriented toward directly persuading people to use the product? Instead, what if all your marketing elements were organized around causing people to talk about the product in a way that would get them to use more, and get their friends and colleagues to use more?
Sometimes the “long way ‘round” can be the fastest. In fact, some would argue that going after word of mouth directly is not the long way around. It is what happens anyway: marketing leads to word of mouth, which leads to sales. Why not try organizing everything around word of mouth, since it is the central part of the mix?
There are many ways to accomplish this, such as testimonial ads, materials that describe case studies of how customers use the product successfully, endorsements, product seminars and the like. These are usually very effective, which is why these methods are often overused.
But these techniques, and dozens of others that can trigger massive amounts of word of mouth, are usually used piecemeal. They need to be organized into a campaign, so that each element supports and amplifies each other.
That's what we do in our word of mouth campaign consulting.
What I am urging you to do is to consider a total approach. What if all parts of your marketing were focused singlemindedly on one goal: getting people to talk favorably about your product? I know this is extreme, because you’ll always need things like closing pieces, order forms, etc., but it is very productive to consider marketing from this orientation. When you look at a marketing system from this perspective—as a word of mouth generation system—you will see it in a whole different light that reveals many opportunities.
[For instance, if you look at the marketing communications, you will almost always see elements that could not possibly generate word of mouth. Or, if generated could not survive from one person to another. You will typically see communications that are asserting facts that are unproven, in a brute force attempt to convince skeptics, instead of simple quotes that will remove all doubt.]
I cannot even begin to give you a flavor for how many opportunities are lost, how much more effective most marketing mixes could be made if they were viewed from the perspective of word of mouth. It is routine to be able to increase sales multi-fold (yes, 2-5 times!) by tuning your marketing to the word of mouth note.