When buying a tablet, choosing a restaurant or investing in a new car, what do you consider to be the most trustworthy advice: a review site, a slick advertising campaign, or a suggestion that a close friend or family member gives you?

Even with the use of elaborate and targeted marketing campaigns, various platforms and review sites, the probability is that you will give more weight to a friendly word of advice.

Word of mouth has been around since time immemorial: it’s the original social media platform. Even our earliest ancestors probably made recommendations to others. Just picture it: one homo sapiens tells his neighbour about a particularly fertile hunting ground and soon, that area becomes the most popular.

And yet, despite its deep roots, word of mouth has lost none of its effectiveness. According to global management consulting firm McKinsey & Company, word of mouth is the primary factor behind 20 to 50 per cent of all purchasing decisions. What has changed is that word of mouth is no longer a one-to-one conversation: rather, with the proliferation of review sites, social media platforms and comparative sites, word of mouth has been amplified to a one-to-many status.

There are various factors that fuel the success of word of mouth marketing. First of all, word of mouth is based on trust. While consumers might be sceptical about traditional company-driven marketing, word of mouth gives them the comfort of unbiased advice. Word of mouth is also very effective in cutting through the noise: as consumers become more overloaded with information and messages, they are giving more value to what is perceived as trustworthy advice given by another consumer who has had a similar experience to theirs.

Moreover, word of mouth builds on its own success. The right message can be shared and passed on, thus expanding within other networks and communities. This, of course, can have both positive and negative effects: while a positive message can help a company attract more customers, a negative message will potentially lead to a loss in a company’s market share.

Yet word of mouth isn’t some sporadic message that expands or contracts uncontrollably. Rather, word of mouth can – and has to be – managed.

First of all, to manage word of mouth a company has to create conversation. It’s all well to have hundreds of social media fans: however, if a company doesn’t engage and converse with them, then most of the effect is lost.

To create conversation, a company needs to focus on the three E’s: engage, equip and empower.

Engaging with consumers means giving them valuable content but also listening to what they have to say. As a company, you need to be a presence in consumers’ lives. Companies that appreciate word of mouth respond to followers on Facebook and Twitter to create ongoing conversation.

To create conversation, a company needs to give its followers reasons to talk. Equip consumers with knowledge about services and products, insider information, humorous or engaging stories. A well-planned message will be shared by thousands and even millions on social media. It’s like with secrets: if a secret is juicy enough, it will be whispered about, shared and discussed until it’s no longer a secret but a news item. The same goes for messages: if a message has value, then consumers will want to tell others about it.

Empowerment means giving consumers different ways to talk and share. A company needs to give consumers ways and means to share content within their circles. Moreover, consumers need to be involved in the development of new pro-ducts and services; that way they feel they really matter to a company.

As with anything else, what isn’t measured cannot be maintained. In the case of word of mouth, if its impact is not measured, then a conversation cannot be ongoing and consumer loyalty will not be maintained.

To measure word of mouth equity, a company needs to count the number of recommendations, shares and likes that its products and services generate. Moreover, different weight needs to be given to various recommendations: the advice of a trusted friend is more likely to lead to a sale than a share by someone on Facebook. Moreover, a company needs to recognise which of its consumers are the most influential: it is messages driven by these consumers which are most likely to be shared, trusted and have the biggest impact. Finally, the context in which a message is shared needs to be given due consideration: a recommendation given over a family dinner is more valuable than one which is shared in an open Facebook group.

It is this understanding and analysis that helps companies harness the power of word of mouth.

Generating word of mouth

Provide great service

For consumers to talk about your company, you must provide excellent products, services and overall experience. Otherwise, why should they talk about you? It takes a little extra something to get the conversation going. On the other hand, what also creates conversation is a bad product or an appalling service. Avoid at all costs.

The right people

All consumers are equal, but some are more equal than others. If a well-known personality talks about how great your products or services are, the impact will be greater. Moreover, such endorsements are more likely to influence others. Connect with these influencers by contacting them directly and mentioning them in your conversations.

Encouragement

If you want consumers to talk about you, then you need to show them appreciation. Such appreciation will act as an incentive for further conversation. Offer discounts to people who review your products or services and give them rewards for referring your products or services to other consumers.