Word of mouth marketing measurement and analytics

By tids

Determining the success of word of mouth marketing activities, like measuring social media campaign success, is best done on a case-by-case basis. Importantly, it needs to integrated with the measurement of other marketing activities, particularly since so much word of mouth activity happens offline.

Having said that, there are a few general guidelines to follow when attempting to measure word of mouth. Larry Freed from US website satisfaction agency Foresee Results has identified what he calls the six truths of word of mouth measurement:

forsee

    larryfreed
  1. Word of mouth can’t be bought. Companies should focus on “earned recommendations,” which follow a satisfying interaction with the company.
  2. More questions are better. Don’t just ask “Would you recommend us to a friend or colleague?” Also ask how likely they are to communicate about their experiences.
  3. Measure good and bad comments. Don’t just ask about the likelihood of recommendation; find out how favourable (or not) that recommendation would be.
  4. Use a precise measurement scale. Reducing an indexed scale to detractors, passives and promoters is an oversimplification and makes data significantly less accurate.
  5. Use a holistic approach. If you include questions about what is and isn’t satisfying customers, you’ll be able to act on that data because you’ll know what’s driving them.
  6. Satisfaction drives word of mouth, every time. Measuring satisfaction can help you better predict word of mouth behaviour.

John Bell, head of Ogilvy PR’s global digital practice, says that, “Measuring and reporting on ‘engagement’ may be its own trap. While no one would ever say that engagement is bad - that’s like being against ‘mom’ - what it exactly means and how we should value it remains unclear.”

    johnbell

He adds that, “Word of mouth marketing is being held to a higher standard than other disciplines in terms of measuring effectiveness. The entire reach and frequency model is completely suspect in this day and age of marketing chaos. Still, I think we live up to that higher standard.”

Putting a value on word of mouth

So what is a word of mouth conversation worth? Interestingly, two separate marketing/research agencies, BzzAgent and ChatThreads (coincidentally, both based in Boston), tried to come up with a scientific measure of the value of each conversation by a consumer about a brand, and they both came up with a figure of US50 cents.

BzzAgent came up with the figure by dividing sales by total conversations, while ChatThread’s formula takes into accout reach, purchase behaviour and other factors such as marketing program costs.

The Word of Mouth Marketing Association recently released a guidebook on word of mouth marketing metrics which looks at a number of different types of metrics:

  • Advocacy: The intent and/ or behavior of making recommendations using approaches offline surveys or online network and content analysis.
  • Conversation share: The volume and share of conversation using ongoing online buzz monitoring and offline syndicated research, and campaign specific custom research.
  • Cost per conversion: The cost of getting one person (prospect) to perform the desired action (purchase), factoring in conversion value, conversion attribution and incremental conversions.
  • Conversational reach: The cumulative penetration of a brand message within a given target audience through conversations, by using a multi-generational approach.
  • The influencer factor: Word of mouth activity by identified influencers measured by self-report surveys, online buzz monitoring and sociometric network analysis.
  • Cost deflection: The decrease in R&D, time to market and customer support costs through customer feedback and peer-to-peer support.
  • Value of a conversation: How much a positive or negative conversation is worth to the brand’s bottom line, measured by customer lifetime value, WOM referral value and media mix models.
  • Sentiment analysis: Customer attitude to the company/brand and its products/services
  • Overall ROI

Whichever metric you use, it’s important to choose ones that match your business goals for the brand. Set a benchmark level and measure progress against that benchmark rather than focusing on overall numbers.

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