What’s New About Word of Mouth? (If you are reading this you probably know)

by Marianne Richmond on March 9, 2006

Jack Trout, writing in Forbes, asked the question, “Is Word Of Mouth All Its Cracked Up to Be?” Well, he wasn’t really asking…he went on to write that word of mouth was out of hand because there was an asssociation, WOMMA; and the association had a Conference attended by over 400 people.

Further, he wrote, in support of his out of control premise, there is a new vocabularly  for  word of mouth which includes  but is not limited to buzz, viral, evangelist, and blogs. And of course we all know the Forbes take on blogs, “Web logs are the prized platform of an online lynch mob spouting liberty but spewing lies, libel, and invective.”

His remaining points were, not new, just another 3rd party Holy Grail endorsement by early adapters….yes, we know he means adopters; he acknowledges the internet but only by way of saying its raised the noise level and then writes that nobody talks about products anyway. Next thought from Jack? Well, even if they were talking, the talk would be negative if you had a bad product. Last thought…he wants his message that he’s work so hard on to be delivered and he is not going to give up control of his arsenal.

There were lots of really great responses to Mr. Trout’s fisheye interpretation of word of mouth: George Silverman, JohnMoore (check out his post about trying to share Gil Scott-Heron videos on YouTube.…..then check out Gil Scott-Heron!). JohnMoore and George Silverman pointed out the fallacies in Jack Trout’s attack which can best be summarized with “Jack, it’s not about you.
Jack, you don’t have control so you can’t give up control.

Now, so we know that the consumer is in control. That is not a new new concept. The consumer ultimately makes the buying decision. And the so called volume of information noise has gone up to such a level that the customer has to control what information gets in…there is simply too much information. Again, not new new…but because the consumer controls the information, marketing has to be kinder and gentler. As George Silverman said at WOMMA, “embrace the customer…make love not war.” War was the Trout Reis way and that was the ’80s. Their focus was on destroying the competition.

So…there has been a shift in control based upon the sheer availability and magnitiude of information as well as the speed and noise level of the onslaught of messages. This is a result of technology. Technology has also developed the noise filters. Comsumers seek information about products and services…before, during and after the purchase. Marketing and advertising are part of the information process not just the sales process. This is a shift.

But…..what is new new about word of mouth that makes Jack Trout’s article completely old school?
Peter Kim talks about it in terms of the efficacy of technology and a reference to Charlene Li’s at Forrester’s report on Social Computing:

 “Easy connections brought about by cheap devices, modular content, and shared computing devices are having a profound impact on our global economy and social structure. Individuals increasingly take cues from one another rather than from institutional sources like corporations, media outlets, religions and political bodies. To thrive in a era of social computing, companies must abandon top down management and communication tactics weave communities into their products and services and use employees as partners, and become part of a living fabris of brand loyalists.”

Simply put….the technology has put tools in the hands of consumers such as blogs, wikis, mobile, on-line social networks, and given the consumer a voice never available before. Consumers care more about what other consumers think than they do about advertising…not new; but, one consumer no longer just tells one consumer who tells another consumer. Now, one consumer can reach an unlimited number of consumers and speak with the authority and credibility of a friend. It’s about the technology but, it is the relationship, stupid.

Two more points. One, regarding why we know that this version of word of mouth is new AND all that it is cracked up to be…in other words, a paradigm shift.

What is the scientific definition of a paradigm shift? According to Kuhn
“when scientists encounter anomalies which cannot be explained by the universally accepted paradigm within which scientific progress has thereto been made. The paradigm according to Kuhn’s view, is not cimply the current theory, but the entire worldview in which it exists. and all the implications which come with it.”

Think about social computing and the speed and the volume of information that people have and then think about the speed at which the information is passed and the number of people that it can be passed to that belong to a community of practice and you will see paradigm shifting in action.

Second point….Knowledge at Wharton had an article yesterday about customer disatisfaction with the title, Beware of Dissatisfied Consumers: They Like to Blab. They were referring to a study of retail establishments but I think the numbers are most likely directionally accurate for any dissatisfied customer: Overerall, it says for every 100 customers that say they had a bad experience  a retailer will lose between 32 and 44 of them as customers.

“The complaints have an even greater impact on shoppers who were not
directly involved as the story spreads and is embellished, researchers
found. Almost half those surveyed, 48%, reported they have avoided a
store in the past because of someone else’s negative experience. For
those who had encountered a problem themselves, 33% said they would
“definitely not” or “probably not” return. “This storytelling has even
more impact on the people the story is told to than the people who told
the story,” says Hoch. The data is based on a survey of 1,186 shoppers”

 These are numbers from plain, old fashioned word of mouth. Put them into the social computer and it is obvious what is new about word of mouth. Imagine if the social computer was a mobile device how immediately the bad experience would start to travel….one could still be angry.

 

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