It’s no secret: Word-of-mouth (WOM) marketing is the holy grail of influencing a consumer’s purchasing decision.  Until now, there has been no definitive measurement of WOM’s success.  Well, the folks at the Word Of Mouth Marketing Association, with the help of brands like AT&T, Discovery Communications, Intuit, PepsiCo, and Weight Watchers; and agencies like House Party, Ogilvy, Zocalo Group, and Brains on Fire, worked together to fund and produce a study to quantify WOM.  Yes, they actually did that.

Peter Stork, SVP research and analytics, at House Party; Greg Pharo, director of market research and analysis, at AT&T Mobile; Edward Wild, senior director of analytics, at Pepsi Beverages; and, Beth Rockwood, senior vice president of market resources, at Discovery Communications, said their ambition was to answer key questions like:

  • How much of a brand’s sales (or rating points) are driven by WOM?
  • Does WOM amplify marketing?
  • How do the impacts of online and offline WOM compare?
  • How do WOM and paid impressions compare in their effectiveness at driving sales?

Well, unsurprisingly, the numbers were impressive for WOM.  The biggest surprise to me were the distinctions between online and offline WOM.  Here are their key findings:

  • WOM accounts for 13 percent of consumer sales, on average, which represents six trillion dollars in annual consumer spending.  WOM’s impact is almost 20 percent of sales in higher price-point categories.
  • Most WOM happens two-thirds offline and one-third happens online.
  • Offline WOM drives at least five times more sales than a paid advertising impression, and as much as 100 times more for higher-consideration categories. 

  • Two-thirds of WOM’s impact is direct, and one-third is an amplifier of paid media.
  • WOM has a more immediate impact than traditional media, happening closer to the time of purchase and, oftentimes, within two weeks.

So, if you are selling gold bars, diamonds, or, say, Kate Spade bags or BMWs, launch an offline influencer campaign that can extend online.  Here at CJRW, we have seen great success with mobilizing influencers offline at events or who are a part of a strong club or organization, and who have a strong reach online.  It is a one-two punch.

Read the full study at womma.org/returnonWOM.