Measuring ROI Of WOM Marketing

AT&T’s Greg Pharo recently joined Ed Keller of the Keller Fay Group for a webinar on the Return-On-Investment of Word-Of-Mouth (WOM) marketing. He shared insightful information on AT&T’s research into WOM and the significant role it plays in driving new customer acquisition.

Keller stated at the beginning of the webinar that in a recent study, approximately 85% of marketers in the US couldn’t show the ROI of WOM marketing, despite plans to increase their budget spend in the category. A McKinsey article also noted WOM as being the most ‘disruptive’ marketing factor, adding that WOM is responsible for 2.1 billion daily brand impressions in the US and 440 million in the UK.

One particularly interesting statistic was that of the 90% of WOM marketing that happens offline (which is interesting in itself), over half of this was driven by one or another form of marketing or media. Of particular importance is the fact that 26% was driven by paid advertising. Targeted advertising is obviously a vital factor in driving sales through WOM and on the back of that, identifying who to target remains an increasingly important challenge. Being specialists in advanced and predictive analytics, Idiro can identify propitious customer segments so that marketers can better target their campaigns, in order to capitalise on these new figures emerging from AT&T’s research.

Although paid media remains the primary driver of sales for AT&T at 30%, WOM is a close second. Pharo elaborated on this by saying that WOM explained over 10% of sales through positive comments, but also over 10% of lost sales through negative comments.

 
ROI Of WOM

He concluded his thought-provoking presentation by saying that WOM metrics belonged on a CMO dashboard as a KPI and that WOM is ‘an impactful, relevant variable for influencing sales in the Wireless industry’. He believes that conversation should be a marketing objective for all marketers and Ed Keller went on to explain the best ways for those marketers to stimulate WOM:

1. Focus on ‘talk-worthy’ messages, i.e. ‘triggers

2. Target consumers who can carry messages, i.e. ‘influencers

3. Favour marketing/media that maximises WOM, i.e. paid advertising

He also added an interesting point at the end that maybe all media should be thought of as ‘social’.

Idiro’s expertise in predictive analytics can provide marketers with a thorough analysis of their target audience, identifying the key influencers amongst communities and even amongst families and households. Using the SNA Plus platform, marketers can really take full advantage of the power of WOM, which, if this webinar is anything to go by, will remain a key sales driver for years to come.