Talking to friends and family about a new product or opportunity is not new. Researchers have looked at word of mouth advertising since the 1950s. Further, word of mouth marketing has been used in direct selling, at least, since the 1940s. Corporations have started (or restarted) the use of “viral” or “buzz” marketing by encouraging or rewarding consumers for talking to friends about products they like. One of the more notorious companies using social networks was Walmart and their roving (undercover) recreational vehicle families where RVers were paid by Walmart to go across the country camping out in parking lots and blogging about their experiences. Other companies like Proctor & Gamble have asked teenagers to create a buzz among their peers (Wells, 2004). The practice is becoming so prevalent that we now have a word of mouth marketing association (womma.org). This article summarizes how word of mouth marketing is used, and what direct sellers may learn from what the companies are doing today. Why does word of mouth (WOM) work? What are the risks of WOM?
Buyers use WOM with known relationships of family, friends, coworkers, and acquaintances (your social network). We know and trust these people because they have given us good advice in the past. We also know which of these people have led us astray in the past. Asking people we know about a product or service saves us time and reduces the perceived risk of purchases. We often believe that our peers are unbiased and willing to share the positive and negative about a product or service. Asking a random person at a bus stop often leaves us as uncertain as when we started.
What happens when you are the seller? When you sell to someone in your social network, you have the advantage of knowing the likes, dislikes, needs and financial situation of the person. You can target your message specifically to the friend or family member. Research on WOM in traditional businesses suggests that most recommendations happen face-to-face and occur within the normal conversation of the day (Carl 2006). You might wonder if family and friends might be suspicious of attempts to recommend a product. Again here the research suggests that if you are up front about the financial gain for yourself, those friends and family will have a better feeling about the product and rate you as more credible as a salesperson (Carl 2008).
So why can’t or don’t we have success with everyone we present a product or opportunity to? The same reasons you succeed with family and friends can also create the failure. The buyer knows you. If you present every product or opportunity that comes along and have given bad advice in the past, then you will have to build trust.
Many of us watch what others purchase either consciously or unconsciously. When my neighbor purchases a new plant variety and beats me to the first tomato of the season, I take notice. Research on who has the most influence in terms of word of mouth suggests that we are not all created equal. Some consumers have special expertise which allows them to have more influence when it comes to product recommendation. I certainly trust my mechanic to give me a good recommendation on the next car I buy. Others have political, social, or religious prominence and therefore some look to them for product recommendations (even when they don’t want to give one). The person who develops expertise in herbs, essential oils, or chocolate is more likely to be approached for your opinion on products in those areas.
WOM marketing is not new to direct selling. You already know that there are advantages and disadvantages to using your social network. The research in other industries appears to provide a validation to the process that many of you have used for years. A couple of ideas to consider from this research are first: more companies are using WOM marketing by paying customers to spread the word about a product or service, and second: the current research seems to favor face to face recommendation to online formats. The increase in WOM marketing by traditional companies like WalMart and Proctor and Gamble creates new competition for you and increases the exposure to such marketing tactics. This is good and bad. When traditional companies use similar tactics it is because they work. Good news for you. The increase in social network sales means that a potential for saturation may occur. We may get sick of hearing about the new products our friends and family have tried. Overall, the use of WOM continues to provide a powerful method of sharing products and services.
Carl, W. J. (2006). What’s All The Buzz about?: Everyday Communication and the Relational Basis of Word-of-Mouth and Buzz Marketing Practices. Management Communication Quarterly, 19(4), 601-634.