You are here

BEST PRACTICE: Word of mouth marketing

As customers' increasingly control the marketing messages they are exposed to through preference services and email filtering, the marketing industry has turned its focus to word-of-mouth marketing on the basis that recipients will allow content from a trusted source. Indeed, figures from research company NVision suggest that 70 per cent of people are more likely to buy a product if it has been recommended by someone they know.

While this revelation is far from new, this kind of marketing is fast becoming a science that includes more than simply generating case studies from happy customers. It is about encouraging customers to evangelise on a business's behalf, a discipline which now has its own vocabulary and means of measurement. Fundamental to the current word-of-mouth marketing (WMM) movement has been the pioneering work of US-based management consultant Bain & Co, which looked at the relationship between customer satisfaction, recommendation rates and company growth.

The work resulted in a metric, the Net Promoter Score, which measures how likely customers are to proactively recommend a company, product or service. The beauty of the formula is its simplicity, enabling companies, however small and frugal in their marketing spend, to quickly assess the word-of-mouth impact they are having on their customer base so they can do something about it.