Sales & Marketing

It's all about word of mouth

2 min read

09 December 2007

Can one person's opinion about your product really affect your business? Word on the street says it can...

Crispin Manners is director of service innovation for Kaizo, an award-winning PR firm that advocates the use of word-of-mouth (WoM) marketing. It sounds a bit airy-fairy, but Proctor & Gamble, one of the most successful marketing organisations in the US, is a convert, so it’s well worth listening to.

“Word-of-mouth is all about people making recommendations to friends and colleagues,” Manners says. “It is synonymous with trust, and works because the person making the recommendation is trusted by the person receiving it.”

Retailers in the US, UK and Europe say the following happened after putting customer-created reviews on their websites:

• 77 per cent reported site traffic increases • 56 per cent reported improved conversion rates (rate of site visits to actual purchases) • 42 per cent reported higher average-order values.

“Some e-commerce businesses hesitate to put customer reviews on their site due to a fear of negative WoM about their products,” Manners says. “But the advantages of customer reviews clearly outweigh the disadvantages.

"Plus, research by Northeastern University in the US has proven that a single opinion from an advocate of a product or service can stimulate up to 40 conversations or recommendations. So, a panel of 2,500 could prompt up to 100,000 conversations.”

In practice, Kaizo creates online forums for views and recommendations to be shared. Working with skincare firm Simple, it has created a website that now attracts around 4,000 active advocates for the brand (www.simplycity.me.uk), and the company has exceeded its aims for the year in three months.

Jamie Oliver runs The Star Entrepreneur, a series of events on PR and the media aimed at entrepreneurs and SME owners. For more details go to: www.candoevents.co.uk/thestarentrepreneur or call 020 7274 8648.