WOM ROI begins with education
By Molly FlattMeasuring the value of a word of mouth strategy always involves two elements: getting some reassuring metrics to execs who think in terms of reach, eyeballs and direct sales; and educating companies about the new and different ways in which WOM brings long-term value to them.
The metrics can in fact be more precise than traditional measurements such as vague print circulation figures or possible viewers of a TV ad. We can track the volume of WOM directly stimulated by a project; measure the wider engagements with that content to show how the WOM ripple has spread; calculte the financial value of a positive unit of conversation (and the cost of a negative unit of conversation) for a brand using sales data and industry research; collect statements of intent from those who have come into contact with those conversations and been influenced by them; and overlay internal sales and marketing figures to show correlations between their activity and WOM.
The second type of measurement is a little more tricky, as it asks companies to question some of their entrenched beliefs about ‘value’ and move away from a reassuring but possibly misleading reliance on numbers. It includes demonstrating the power of quality engagement with fewer, more passionate and vocal advocates rather than ‘viral’ spread to a large number of disinterested people; examining how word of mouth has impact on all areas of a business, not just in marketing but internally; and - something we are particularly evangelical about at the moment - demonstrating how an effective WOM strategy can shift the emotions that adhere to a brand in social media, stimulating a range of positive emotions that are key in securing long-term loyalty and sales.
Jay Deragon has been posting some great stuff on this subject onThe Relationship Economy blog; particularly good recent articles include last week’s examination of the NPV (net present value) of social media and yesterday’s piece on investing in knowledge. As he says:
Each day more businesses are awakening to the power of the social web and there is one thing separating the successful from the unsuccessful: Knowledge. Without knowledge a business can quickly get lost in the “sea of social technology” losing precious time doing unproductive activities without achieving a desired result. Money is a derivative of knowledge. The lack of knowledge is a derivative of cost.
Deragon’s belief that brands need to cultivate this learning internally is spot on - internal knowledge and skills transfer is an essential part of our work. It not only ensures that a WOM strategy has longevity and cut-through within a company, but helps execs and employees alike understand the sometimes unfamiliar yardsticks of value that a WOM strategy should be measured against.
