Recruiting Less-Loyal Customers for Word-of-Mouth Campaigns May Be Most Effective According to Study
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.
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.