Download - WOM Report 10-26-07 final
measuring the role of word-
of-mouth marketing
October 2007
In a recent national online study among 600 adult men and women, novaQuant explored the relative influ-
ence of word of mouth on decision making across a wide variety of consumer products and services, rang-
ing from computers to cars, from dentists to mobile phone providers, from movies to soft drinks. The goal
was to quantify, on a relative basis, which categories are most likely to benefit from marketing efforts to gen-
erate word of mouth.
Report on Word-of-Mouth Marketing October 2007 Page 1 Copyright © novaQuant Inc.
180
171
162
162
157
155
149
142
133
133
131
131
120
106
103
97
93
86
80
79
73
73
71
67
54
51
49
46
41
3723
Computer
Movie
Digital camera
Sit-down restaurant
Dentist
Mobile phone service
Real estate agent
TV
Car or truck
Plumber
Auto insurance
Printer
Internet service
Hotel
Take-out food
Bank account
Book
Cold remedy
Clothing store
Airline flight
Denim jeans
Car rental
Athletic shoes
Online shopping
Coffee
Shampoo
Ice cream
Toothpaste
Grocery store
Website for news
Soft drink
The word-of-mouth index by category
Word-of-Mouth Influence Index
At first glance, the results showing which product or service decisions are most impacted by word of mouth
seem intuitive. Namely, claimed word-of-mouth influence indexes high for:
• High-tech and/or expensive products, such as computers, digital cameras, cars
• Local services which involve a personal relationship, such as dentists and real estate agents
• Decisions that are related to a new experience such as choosing a sit-down restaurant or seeing a
movie
Conversely, more everyday products and services, such as soft drinks and grocery stores, tend to be less
impacted by word of mouth on a day to day basis.
Note: Percent at least somewhat influenced by
other people’s opinions (top 3 box on 5-point scale)
divided by the average for all 31 items
Above average
Below average
Report on Word-of-Mouth Marketing October 2007 Page 2 Copyright © novaQuant Inc.
74%
67%
65%
67%
63%
62%
55%
55%
53%
55%
46%
45%
40%
29%
25%
56%
51%
49%
47%
42%
41%
38%
33%
31%
27%
25%
23%
15%
12%
7%
Computer
Digital camera
Mobile phone service
Real estate agent
Car or truck
Printer
Internet service
Hotel
Bank account
Cold remedy
Clothing store
Denim jeans
Ice cream
Website for news
Soft drink
First time
Most recent time
The products and services where word-of-mouth impact is low for the most recent brand purchase usually
registered significantly higher word-of-mouth impact the first time that same brand was chosen.
For example, only 7% claim that their most recent purchase of a soft drink was influenced by word of mouth.
However, there are still 25% of respondents who claim word of mouth had an impact the first time they
bought that particular brand of soft drink. So given that the first time a brand is purchased has an impact on
all future purchases for that same brand, the absolute effect of word of mouth on small everyday purchases
can still be substantial.
Cold remedies are another interesting example. Twenty-seven percent claim some word-of-mouth impact
on the brand they chose for their most recent purchase, but more than half (55%) say that word of mouth
had an influence the first time they purchased that brand.
need for word of mouth is linked to experience with
a brand/product category
Word-of-Mouth Influence for
First versus Most Recent Purchase
Note: Top 3 box on 5-point scale; asked
about 15 of the original 31 items; those
whose most recent decision was the first
time that decision was made are included
in both subgroups above.
Report on Word-of-Mouth Marketing October 2007 Page 3 Copyright © novaQuant Inc.
friends and families are most
common source of information People are more likely to be influenced by
product or service opinions from friends, family
and other people they know than from people that
they don’t know (such as experts, customers
online, etc.) The digital camera is the only
product where the influence of word of mouth
from people not known is actually higher. Brand
decisions regarding technology products tend to
be the most impacted by opinions from people
not previously known. Selecting a mobile phone
carrier seems to be somewhat of an anomaly –
which may have to do with local coverage/
performance issues and the growth of the friends
and family promotional packages being offered.
word of mouth can come from people you know
and people you don’t know
78%
77%
73%
71%
70%
70%
69%
68%
65%
63%
59%
58%
56%
53%
28%
34%
10%
14%
4%
25%
58%
53%
8%
26%
52%
35%
7%
62%
31%
56%
Real estate agent
Mobile phone service
Clothing store
Bank account
Ice cream
Internet service
Computer
Car or truck
Denim jeans
Cold remedy
Printer
Hotel
Soft drink
Digital camera
Website for news
People Know
People Don't Know
Word-of-Mouth Influence
but a clear need for expert and customer opinions for big deci-
sions still exists Even though people clearly place higher value on
the opinions of people they know and trust, the
impact of other people/sources is still often sub-
stantial across a wide range of categories. The
most notable exceptions are for personal-taste
items such as ice cream, soft drinks, and denim
jeans, where opinions from people not known are
clearly less influential.
The results also reinforce that people rely heavily
on friends and family for insights on local ser-
vices such as real estate agents and banks. Pre-
sumably the fact that these services are local and
may require a more personal touch suggests that
opinions from friends and family are highly rele-
vant.
Note: Among those who received opinions
about that decision; Asked of “short list” of
15 products/services only.
Report on Word-of-Mouth Marketing October 2007 Page 4 Copyright © novaQuant Inc.
Despite the prevalence of e-mail and instant messaging usage, the vast majority of opinions are from
people personally known, such as family and friends, and are received verbally - in-person or over the
phone (98%). Opinions from people not known, on the other hand, are primarily received on the Internet
(78%), especially from online customer reviews and surfing the web.
traditional, personal forms of word of mouth are still
the most common forms
People They Know People They Don’t Know
In-Person/By Phone (net) 98% In-Person/By Phone (net) 28%
In-person 94% In-person 24%
By phone 51% By phone 8%
Net: Internet/Text 36% Internet/Text (net) 78%
E-mail 32% Customer reviews online 51%
Instant message 9% Surfing the web 42%
Text message 4% Expert websites 37%
Online publications 27%
E-mail 19%
Online discussion boards 16%
Blogs 7%
Instant message 1%
Text message 1%
Traditional Media (net) 45%
Newspapers or magazines 33%
TV or radio 29%
How Received Opinions
Report on Word-of-Mouth Marketing October 2007 Page 5 Copyright © novaQuant Inc.
There are essentially two kinds of “unknown” people who influence product and service decisions: Pros
(experts and other professionals in relevant fields) and Joes (regular individuals such as those who write
customer reviews online). Pros have more influence on almost all products and services in the survey,
especially the higher ticket items (such as a vehicle or computer) or where health is concerned (such as a
cold remedy). Joes are more influential when it comes to hotels and clothing stores.
a key segment of experts: “The Pros”
50%
49%
47%
44%
22%
20%
29%
33%
22%
19%
6%
17%
13%
11%
16%
2%
19%
27%
11%
18%
20%
2%
3%
4%
24%
6%
3%
8%
5%
5%
Car or truck
Computer
Digital camera
Printer
Mobile phone service
Cold remedy
Website for news
Internet service
Real estate agent
Hotel
Bank account
Denim jeans
Clothing store
Ice cream
Soft drink
Pros
Joes
Word-of-Mouth Influence from People They Don’t Know:
Professionals (Pros) versus Individuals (Joes)
Note: Among those who received
opinions about that decision
Report on Word-of-Mouth Marketing October 2007 Page 6 Copyright © novaQuant Inc.
Word-of-Mouth Influence by Age
While this study focuses on the relative importance of word of mouth across categories, the results also
highlight the key differences by age in terms of the influence of word of mouth.
Younger respondents (ages 18-34) are consistently more influenced by word of mouth than their older
counterparts (ages 35-64) – especially for cars/trucks and auto insurance. This could be due to the fact that
they have less experience with certain types of purchases given their life stage. Interestingly, they were
equally influenced for items like computers and printers.
a key demographic: consumers age 18-34
63%
61%
60%
59%
58%
56%
56%
54%
53%
52%
50%
47%
45%
44%
43%
41%
40%
40%
38%
35%
35%
34%
31%
28%
26%
26%
26%
24%
20%
17%
14%
32%
50%
33%
46%
56%
44%
48%
49%
46%
41%
40%
33%
27%
28%
25%
41%
21%
18%
25%
17%
16%
21%
20%
10%
6%
12%
19%
11%
12%
9%
4%
Car or truck
Movie
Auto insurance
Dentist
Computer
Real estate agent
Digital camera
Sit-down restaurant
Mobile phone service
TV
Plumber
Internet service
Take-out food
Hotel
Bank account
Printer
Cold remedy
Clothing store
Book
Denim jeans
Athletic shoes
Airline flight
Car rental
Shampoo
Grocery store
Coffee
Online shopping
Ice cream
Toothpaste
Website for news
Soft drink
18-34
35-64
Note: Top 3 box on 5-point scale
Report on Word-of-Mouth Marketing October 2007 Page 7 Copyright © novaQuant Inc.
younger consumers take to technology for word-of-
mouth communication
98%
93%
58%
45%
36%
18%
9%
98%
94%
48%
31%
30%
4%
2%
Net: In-Person/By
Phone
In-person
By phone
Net: Internet/Text
Instant message
Text message
18-34
35-64
82%
56%
50%
43%
33%
19%
27%
14%
1%
1%
37%
28%
24%
30%
27%
7%
77%
48%
39%
34%
24%
19%
11%
4%
1%
0%
48%
36%
31%
27%
22%
9%
Net: Internet/Text
Customer reviews online
Surfing the web
Expert websites
Online publications
Online discussion boards
Blogs
Instant message
Text message
Net: Traditional Media
Newspapers or magazines
TV or radio
Net: In-Person/By Phone
In-person
By phone
18-34
35-64
How Received Word of Mouth from People Know – by Age
How Received Word of Mouth from People Don’t Know – by Age
Younger consumers (ages 18-34), who we assume to be generally more tech savvy than their older
counterparts, are more likely to use technology to solicit word-of-mouth recommendations. Instant
messaging with friends and family for word-of-mouth information is the most noteworthy gap.
Report on Word-of-Mouth Marketing October 2007 Page 8 Copyright © novaQuant Inc.
highlights for marketers
personal, one-to-one methods still dominate the communication of
word of mouth Even amidst the exploding presence of social networking, blogs and user-generated content and even for
decisions where expert opinions are clearly needed, most word of mouth comes from friends and family or
other known people and most of it is done in-person. Giving consumers easy ways to spread the word to
their friends and family, both in-person and online, will be an increasingly important element of fueling word
of mouth.
categories where purchases are costly and infrequent should
command more word-of-mouth marketing efforts Brand decisions for high tech and/or big tickets products like cars, computers, digital cameras and printers
are among the most influenced by word of mouth, both the first and most recent time the brand is selected.
Since these types of products are continually being updated and purchases are not made that often,
consumers need education and will seek it out from many sources – both from people they know and don’t
know and from both professionals/experts and other consumers.
professional “experts” are especially sought for advice on high
ticket items This underscores the importance of having a good brand story to tell these potential influencers in certain
categories such as automotive or home technology.
local and/or personal services are highly influenced by friends and
family Choosing a mobile phone service provider, real estate agent or dentist are also decisions that are highly
influenced by word of mouth. However, in these cases, the word of mouth is much more likely to come
from friends and family. Perhaps both the personal and sometimes local nature of these services makes
the advice from people they know and trust far more relevant and valuable. It’s also possible that people
feel they will get a better deal or enhanced service if they “know” someone that is already connected to the
service provider.
Report on Word-of-Mouth Marketing October 2007 Page 9 Copyright © novaQuant Inc.
highlights for marketers (continued)
decisions of personal style and taste are less influenced by the
opinions of others, except for the first time! When it comes to choosing a brand for items driven by personal taste or style, such as ice cream, a soft
drink, jeans or a clothing store, the impact of word of mouth is markedly lower than for other categories.
However, there is much more impact on these decisions for the first time the particular brand is selected (in
some cases, more than twice as much), suggesting that the “first time” word of mouth is critical for these
products. Understandably, when consumers do get word of mouth for these decisions, it is primarily
coming from people they know, likely those whose taste or style matches their own.
Word-of-mouth opinions are more highly sought by younger
consumers who are also active users of communication technology Younger consumers (18-34 years old) are typically more influenced by word of mouth than older
consumers (age 35-64) and are more likely to turn to online methods to get that information. Greater
interest in the opinions of others may be a general characteristic of the more youthful segment, many of
whom will have had less experience with some types of purchases. High interest in word of mouth among
younger consumers may also derive from more access to and greater comfort with a wider range of
sources such as the Internet, emailing, and text messaging.
Report on Word-of-Mouth Marketing October 2007 Page 10 Copyright © novaQuant Inc.
Data in this summary are from an online survey
fielded by novaQuant Inc. Respondents age 18-
64 were asked to rate a random subset of 31
product or service decisions that they have made
in terms of how much other people’s opinions
influenced their most recent decision.
Respondents are considered to have been
influenced by word of mouth for a given product
or service if they report being at least “somewhat”
influenced by other people’s opinions for a given
decision (top 3 box on a 5-point scale).
Some key questions were limited to a total of 15
product or service decisions for a more detailed
exploration of the word-of-mouth experience.
Respondents were specifically instructed to
include both positive and negative opinions from
people such as friends and family, people online,
and experts (however they define them) – but to
NOT include opinions from sales people or the
company selling the product or service.
methodology and additional insights
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