Another session I attended at SXSW 2015 was the landmark study of the Return on Word of Mouth (you can get the study by filling out their form) by the Word of Mouth Marketing Association.
Yes, I know this is what they do and, of course, the study was probably pushing towards a good return but I was impressed with the results and the fact they used some major companies to prove their point.
Here are the five points from the Return on Word of Mouth Study.
Word of Mouth has a 13% increase in sales.
We always knew that WOM increases sales but we really didn’t know by how much. A 13% increase is nothing to sneeze at.
Paid marketing on the other hand account for 20% in sales.
Paid marketing is everything you are doing internally – even the stuff to get your Word of Mouth going. But then consumers take care of the rest. So 27% of your sales can be attributed to paid and WOM.
Word of Mouth amplifies the effect of paid media by 15%.
The good thing here is that if you want a boost to your paid marketing you need to incorporate social media. It’s worth the time and effort considering how much you would need to pay paid efforts to get that boost.
When you break down WOM into offline and online (and most WOM is offline – estimates are around 90%), online accounts for 1/3 of the boost to sales.
That’s a great statistic for online Word of Mouth especially when it’s only 10% of overall WOM.
Finally, WOM has an immediate effect.
A common myth of word of mouth marketing is that it takes forever for you to see the effects but this study shows that WOM after two weeks of exposure to a product, offline word of mouth has 65-80% of total impact while TV ads have only a 30-60% of total impact for the same time.
So what does this mean for the dairy industry?
When it comes to product marketing, you need to be tying all paid marketing with social media to get the boost you need.
For instance, instead of laying out my traditional buys for product marketing first, I would look at how I could drive word of mouth both online and offline and then use traditional marketing/advertising to drive awareness to the word of mouth campaigns.
Normally, we use in store samples. How about instead of thinking about in-store samples, we use online store samples – can we ship to customer’s homes and then ask them to share their experience online via social networks?
Can we use our TV advertising to drive people to online sign-ups to get the product to test?
Or maybe we decide to do the in store sample. Then if they like it, we offer them the whole product if we can get them to take their picture with the product and post it online? Or write a favorable review of the experience on our website?
Traditional advertising and paid marketing is a necessity but when combined with the interaction of social, we can drive some serious ROI.
And here’s a cool infographic they put together for it.