Supercharging the Path to Purchase via Word of Mouth - Ed Keller

How do we know word of mouth drives sales? An important answer to this question comes from a new study that demonstrates the increasing importance of word of mouth as consumers get closer to making a purchase decision.

Word of mouth advocacy has become a central objective for most marketers, and positive "WOM" is increasingly understood to be a leading contributor, ultimately, to sales. Separately, marketers and media planners use the concept of a "purchase funnel," or "path to purchase," as an organizing structure around which to craft messaging strategy.

Despite advertisers' intense focus both on word of mouth and on the path to purchase, there has been little focus on the relationship between these two "independent" marketing constructs: How does WOM dynamically change throughout the path to purchase? What stimuli triggers WOM events at different purchase funnel moments? How does all this vary by category?

The Keller Fay Group and Women@NBC Universal unveiled new research that provides insights into these questions. Online interviews were conducted with 5,000 women ages 18-54. The study identified women's position on the path to purchase for a dozen product categories, including automotive, electronics, telecom services, credit cards, insurance, and investment services. The study also collected details relating to word of mouth and media behaviors in these same categories, in order to link together, for the first time, word of mouth, media, and the purchase funnel.

Here are some of the key findings:

1. Word of mouth plays an increasingly important role as consumers get closer and closer to their final decision. At the point when consumers are finalizing a brand choice, 36% are talking every day about brands, on average.

2. Advertising plays a bigger role in helping to spark word of mouth than consumers themselves think, or will admit. Women "say" advertising plays an important role as they are seeking to learn about products, but they claim it plays a smaller and smaller role as they approach an actual decision. But in fact, as word of mouth levels increase the closer they get to a purchase decision, so does the importance of advertising as a part of that discussion.

3. There is an important relationship revealed between television and the internet. TV is often a spark for word of mouth, with conversations taking place immediately after TV advertising exposure. The internet often plays an important role as a follow-up to a word of mouth conversation for research and buying.

4. The relative importance of TV and the internet in sparking word of mouth varies by category. In telecomm, for example, TV advertising is a consistent "winner" versus internet advertising throughout the purchase funnel. When it comes to payment cards, however, TV "beats" the internet during the early purchase funnel stages, but at the "narrowing choices" phase the internet is a clear winner.

Word of mouth is a key marketing outcome that accelerates along the path to purchase. Conventionally, marketers think of consumers as "prospective buyers" before purchase and "prospective advocates" after purchase. This research reinforces a different vision, where prior to purchase, consumers represent two opportunities for advertisers - both as potential buyers and potential marketers. Television and internet can be used synergistically in later phases of the funnel, equipping the consumer with both the information they need to feel comfortable making a purchase decision, and with most effective stimulus to convert a consumer into a person-to-person marketer.

An advertiser cannot control where consumers are in the P2P. Even for launching brands, they most often will be launching into a category with an ongoing consumer process. Media and advertising strategies that recognize that purchase decisions are really conversations will be the most effective.

Ed Keller, CEO of the Keller Fay Group, has been called "one of the most recognized names in word of mouth." The publication of Keller's book,The Influentials, has been called the "seminal moment in the development of word of mouth." Ed can be contacted at ekeller@kellerfay.com.

Read all Ed’s MediaBizBloggers commentaries at WOM Matters.

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