Word of mouth marketing is claimed to be the coming thing, but can this powerful tool do as much ill as good?

Acronyms are marvellous things. If done well they capture a complete idea or set of ideas and act as a form of shorthand for what could otherwise be a ponderous process. They are only good, however, if they are common currency and this only happens when something is widely accepted.

WOM is one of the less well-known acronyms knocking around at the moment, but it is important for retailers, shoppers and almost anyone else you might care to mention. It stands for Word of Mouth and is, at its most elemental, nothing more than a recommendation of a product or service by a disinterested party.

Sounds straightforward and it’s been around since the dawn of time, but now it is seen as a new and relevant tool in the battle to engage and retain shoppers. The term word of mouth should actually not be taken too literally. In the digital world, it can mean anything from an endorsement by a mate in the pub, to carefully targeted use of social media such as Twitter, Facebook and YouTube. And, given that visits to the pub are declining, it seems rather more likely that retailers will benefit from the strategic use of web-based ‘word of mouth’ than anything else.

Tim Denyer, business development director at online consultancy 1000Heads, comments: “Social media and word of mouth are fantastic because they reinforce peer-to-peer conversations. It’s a discipline in its own right.”

A word in your ear

Before ploughing ahead and diving into the WOM world, there are a number of semi-rules that retailers in particular should be aware of if they want to be effective in using the available media. Robin Jaffray, head of planning at advertising agency Inferno, says the first task is to “identify an activation platform”. Loosely, this means giving shoppers a reason to engage with a retail brand.

He instances Jack Wills, the casual fashion retailer, as an example of the process at work. Instead of going to the web direct, the marketing team opted to leave felt tip pens lying around its shops to allow customers to write graffiti on the walls of the fitting rooms. Overtime, this has built up into something that is considered picture-worthy by shoppers, who then post the images onto their Facebook pages. In effect, the “activation platform” is the fitting room itself and the casual nature of the impartial recommendation provided by shoppers is perfectly in tune with the nature of the brand.

Authentic voice

The most cunning element of this particular form of seemingly random word of mouth endorsement is that it happens to be just that: random. In being so, it carries with it the two words that recur whenever you spend time talking to a word of mouth evangelist: honesty and authenticity. The very fact that this particular initiative appears to have happened in spite of, rather than because of, the efforts of the marketing department goes a long way towards explaining its success and how it might appeal even to those of a cynical bent.

Which segues neatly into Jaffray’s other substantial point, which is that if you seek success from word of mouth marketing, you have to face up to the fact that things may not always go the way you might wish. “You’re not in social media to control the conversation. People may say things that you don’t like, but you have to be part of the conversation and you can’t just sit there and let things be said about you.”

Vicki Ansell, social media strategist at consultancy Happen Factory, offers an example of how this unpalatable fact can be turned to an advantage. Earlier this year, US fashion retailer Ann Taylor advertised silk ‘cargo pants’ under its Loft brand on its Facebook page, accompanied by pictures of a winsome model wearing the product. The response from site visitors was not flattering, with many saying that Loft

had lost its way and that the trousers would be fine providing you were a ‘stick-like’ model, as depicted in the images on view, but that for everybody else they wouldn’t work. The retailer responded by photographing Loft staff wearing the cargo pants and then posting these images on its Facebook page. There were still those who branded the style as “ugly”, but the corner had been turned and a crisis turned into a sales drive.

The story serves to show that while there are certainly perils when using word of mouth marketing, handled appropriately there are advantages too. Yet many retailers still baulk at the prospect of poor third-party comment. “Brand owners torture themselves thinking about the negative things that may be said about them online,” says Ansell. She points out that the 55 to 65 age group is the fastest growing sector on Facebook and that this represents a “huge opportunity for companies to move into social marketing and reach a group that has traditionally been difficult to engage”.

Is talk cheap?

The real issue, however, is what is the probable investment required to be a social marketing player and can the return on that investment be measured. The answer to the first point is that like all forms of advertising it depends on the activity undertaken.

If, for instance, you decided that the best way to raise awareness is to build a battle bus containing your product and then take it around the country to reach a new audience, the cost might be quite high and there would be little certainty that brand endorsement would follow.

Yet recently, Puma opted to do this using a truck with a version of a Chinese puzzle along its side that can be taken apart to reveal a lot of training shoes in boxes. The sportswear brand blogged about the truck on its Pumatalk website, which proved sufficient for the brand to be picked up and written about in this context in a wide variety of magazines and online journals. The truck was also mentioned on the brand’s Facebook page…with mixed results, but there was certainly awareness of what was being done.

At a more basic level, providing updates of what your brand or store is doing via Facebook is a useful and highly cost-effective way to keep in touch with a community, generally young, for whom this is a normal means of communication. And if Twitter is the chosen medium, then the efficacy of an online social media word of mouth campaign can be measured via Hootsuite.com, an online facility that allows users to “review success in real time”. It has the considerable selling point of being free.

And just in case the impression has been created that social media usage is restricted to niche retailers and brands, it’s worth bearing in mind Tesco. The appearance of Polish drinks and comestibles at the grocer’s larger branches is reputed to be, in part, the result of the retailer having noticed that small independent retailers were selling the category. It began stocking Polish items and continues to do so. This might be seen as word of mouth working against the interests of independent retailers, but it does serve to illustrate how widely understood and trusted word of mouth is.

So should retailers who aren’t already doing so in a meaningful way invest time and (some) money in raising their word of mouth profile? It might be worth considering consultancy Rubicon’s 2009 Influence Study in which more than 3,000 people were asked about the influence of various sources of information on their purchasing habits. More than a third said they were “influenced very strongly” by word of mouth information - by far the highest decision-making factor.

It’s a view confirmed by Brett Hurt, chief executive of online and social media consultancy Bazaarvoice, who notes: “We’re wired as human beings to help each other and to recommend things. The reality is that adding word of mouth to your website is the most powerful thing you can do to drive your sales.” Word of mouth takes a little understanding, but with a positive attitude and knowledge of the channel chosen, it is one of the most powerful tools available to a retailer.