As consumers become more impervious to traditional marketing tactics, companies are
increasingly turning to word of mouth (WOM) campaigns to engineer conversations--or
buzz--among customers. Researchers at the Yale School of Management and Harvard
Business School have conducted the first study that examines the effectiveness of
firm-sponsored WOM with a surprising result:
consumers with no loyalty to the
firm or product create more powerful WOM than loyal customers.
The study,
"Firm-Created Word of Mouth Communication" by Dina Mayzlin of the Yale School of
Management and David Godes of Harvard Business School, demonstrates that firms can
create incremental word of mouth (over and above what may have existed outside the
program) to increase sales. In a quasi-experiment, Godes and Mayzlin studied a
campaign to create WOM for a national retail chain. Over 13 weeks, loyal customers
of the chain and "agents"
enlisted by a small promotion agency that specializes
in creating WOM communication for its clients, engaged in a word of mouth campaign
to promote the product.
Among the study's findings: word of mouth was found to
be most powerful when it occurred between acquaintances, and the most powerful
incremental word of mouth may come from those less-loyal to the firm. The study can
be downloaded
at:
https://www.som.yale.edu/faculty/dm324/firmcreatedwommktgsci.pdf.
"It may seem surprising that the loyal customers are not the most effective word of
mouth agents," said Mayzlin. "But it's quite intuitive when you consider that it's
incremental word of mouth--the buzz over and above what the customer has already
created--that increases sales. Loyal customers have already told their friends about
the products they like, perhaps a number of times. Their networks are tapped out. On
the other hand, the non-loyals' untouched networks represent a fertile ground for
incremental sales. It is precisely the less loyal customers who should be the target
of WOM campaigns."
Mayzlin and Godes tried to identify whom among the non-loyal
customers would be the best at spreading WOM to their acquaintances since this is
where the sales impact is highest. While opinion leaders--those who have expertise
and communicate it--are typically seen as key communicators in marketing efforts,
this does not hold true for non-loyal customers, where opinion leadership does not
appear to be correlated with propensity to create incremental word of mouth.
The
authors suggest that a measure of one's network density--how many people one
knows--is a more effective way to find the key communicators among non-loyals.
"This suggests that in WOM campaigns, it is crucial for the non-loyal word of mouth
agents to have large social networks," said Mayzlin.
The Yale Center for
Customer Insights at the Yale School of Management is a research center devoted to
studying the behavior of customers. The Center welcomes inquiries from organizations
interested in research partnership and sponsorship opportunities. For more
information visit:
https://www.cci.som.yale.edu.
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