The Growing Importance of Word of Mouth
Because of the increased role of sharing – or online “word of mouth” – the way many products and services are marketed has changed.
Define the growing role of word-of-mouth in integrated marketing communications
- Marketing was once seen as a one way relationship, with firms broadcasting their offerings and value proposition.
- The goal of an organization is to create and maintain communication with its own employees and customers.
- To understand new forms of word of mouth marketing involves knowing the right touch points to use to reach consumers and understanding how and where they consume different types of media.
- Regression analysis: a statistical technique for estimating the relationships among variables.
The Growing Importance of Word of Mouth
The Internet has changed the way business is done. The variables of segmentation, targeting, and positioning are addressed differently. Because of the increased role of sharing – or online “word of mouth” – the way new products and services are marketed has changed, even though the aim of business in bringing economic and social values remain the same. Indeed, the bottom line of increasing revenue and profit are still the same. Marketing has evolved to include more connectedness, due to the new characteristics brought in by the Internet. Marketing was once seen as a one way relationship, with firms broadcasting their offerings and value proposition. Now it is seen more as a conversation between marketers and customers.
The starting point of the integrated marketing communications (IMC) process is the marketing mix that includes different types of marketing, advertising, and sales efforts. Without a complete IMC plan, there is no integration or harmony between client and customers. The goal of an organization is to create and maintain communication with its own employees and customers. Using outside-in thinking, integrated marketing communications is a data -driven approach that focuses on identifying consumer insights and developing a strategy with the right online and offline combination of channels to forge a stronger brand to consumer relationship. This involves knowing the right touch points to use to reach consumers and understanding how and where they consume different types of media. Regression analysis and customer lifetime value are key data elements in this approach.
Several shifts in the advertising and media industry have caused IMC to develop into a primary strategy for marketers:
- From media advertising to multiple forms of communication
- From mass media to more specialized media, which are centered on specific target audiences
- From a manufacturer-dominated market to a retailer-dominated, consumer-controlled market
- From general-focus advertising and marketing to data-based marketing
- From low agency accountability to greater agency accountability, particularly in advertising
- From traditional compensation to performance-based compensation
- From limited Internet access to 24/7 Internet availability and access to goods and services
Moreover, this new “word of mouth” form of marketing can bring benefits to a company; such as:
- It can create competitive advantages, boost sales and profits, while saving money, time, and stress.
- IMC wraps communications around customers and helps them move through the various stages of the buying process. The organization simultaneously consolidates its image, develops a dialogue, and nurtures its relationship with customers.
- This “relationship marketing” cements a bond of loyalty with customers which can protect them from the inevitable onslaught of competition. The ability to keep a customer for life is a powerful competitive advantage.
- IMC also increases profits through increased effectiveness.
- Carefully linked messages also help buyers by giving timely reminders, updated information and special offers which, when presented in a planned sequence, help them move comfortably through the stages of their buying process.
- IMC also makes messages more consistent and therefore more credible. This reduces risk in the mind of the buyer which, in turn, shortens the search process and helps to dictate the outcome of brand comparisons.
- Finally, IMC saves money as it eliminates duplication in areas such as graphics and photography since they can be shared and used in say, advertising, exhibitions, and sales literature.