Interesting Statistics about the Impact Word-of-Mouth has on Your Business

From The Journal of Advertising Research, December 2007:

1.    Over the course of a typical week, the average American consumer participates in 121 word-of-mouth conversations, in which specific brand names are mentioned 92 times. This amounts to 3.5 billion word-of-mouth conversations every single day in this country. Brands are discussed 2.3 billion times per day. 

2. The leading categories for word-of-mouth are food and dining, media and entertainment, sports and hobbies, beverages, and shopping and retail, with about half (or more) of the American public talking about these categories each day. Telecom, technology, health and healthcare, and automotive all generate conversation by about 40-50% of Americans per day. The categories that generate the lowest volume of word-of-mouth are financial services, home products, personal care/beauty, travel, and household products. Even for these, between one-quarter and one-third of American have at least one conversation per day about these products and services. (Notice that most every consumer category is a part of American conversation in some way. Also notice that the categories that are not mentioned as frequently are also the ones that apply to a smaller - or more specific - demographic group. The numbers would certainly change if for example, we looked only at how many times women discussed personal and beauty products.)

3.    76% of these conversations are happening face-to-face. Followed by 17% on the phone, 10% online, 3% via email, 2% via text, 1% via blogs and chat rooms.

4.    When consumers talk about brands, it is most often positive – 63% positive, 9% negative, 16% mixed, 12% purely informational. (This probably reflects the fact that people want to be resources of great information for others. When we speak of a brand, it is often to legitimate our own choices. It is very important for marketers to perceive consumers as advocates – people who want to connect good brands with those around them. Most of us would certainly stop a friend from making a bad decision, but more importantly, we would also take pride in providing alternative solutions. )

5.    Not only is word-of-mouth content mostly positive, consumers find word-of-mouth information extremely credible. This is especially true of face-to-face conversations with family, friends and co-workers. In fact, on a scale of 0 – 10, with 10 being the highest, 80% of consumers ranked word-of-mouth advice as credible at a level of 7 or higher.  49% of all receivers of word-of-mouth product information say they are highly likely (9 or 10 on the 10-point scale) to relay the advice they have received to someone else.  And, nearly half of all receivers of word-of-mouth advice say they will likely make a purchase based on the conversation.

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Comments

[Peter Alexander]

I'm really surprised by point #4 - in all the research I had to do with my dissertation work, everything I found about word of mouth (WOM) communication indicated that negative WOM spreads much more rapidly than positive WOM.

Negative WOM communication also significantly reduces the perceived credibility of advertising, brand attitudes, and purchase intentions, and unfortunately for product and service providers, unsatisfied consumers have a high propensity to share their negative experiences — on average, with at least nine other people! This situation is amplified on the Internet because WOM providers can supplement their words with pictures, scanned documents, and supporting comments by other consumers. Moreover, this supplemented information is easily disseminated electronically like a “big megaphone”. Jeff Bezos, the President of Amazon.com, even claims that “if you have an unhappy customer on the Internet, he doesn’t tell his six friends, he tells his 6,000 friends”.