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The Rumors of WOM’s Demise Are Greatly Exaggerated

Author: Kim Sheehan   |   March 21st, 2010

Public Relations giant Edelman recently published a study that starts the tolling of the death knell for social media and word of mouth. In their report, the Trust Barometer, the agency found that  the number of people whose friends and peers as credible sources of information about a company dropped from 45% in 2008 to 25% in  2010.

Also declining in credibility were consumer and customer employee testimonials. The credibility of CEOs, Academics and Financial Analysts all increased.

Some argue that these results suggest that marketing investments in word of mouth, both online and through traditional channels, could become all for not. In fact, word of mouth buzzAdvertising Age suggests that the growth in the use of online social networks like Facebook and Twitter have created such large networks of casual acquaintances that trust in word of mouth is eroded.

The study has some lessons for small businesses, which I’ll go into in a moment. However, I have to say, with all due respect, that the study’s findings are problematic.  Here are a few of my concerns:

  • The finding that only 25% of people find friends and peers credible is questionable given the sample size Edelman used for this study. The firm surveyed only 500 adults, and didn’t provide any demographic information that would show how the sample represents Americans as a whole (which is standard in many survey reports).  It also doesn’t say whether this was a random sample or not (and statistical evidence is only appropriate in random samples.
  • The study asked about credible sources of information about a company. That phrase, ‘a company’ probably means very different things to different people. To many people I know, it means companies like Exxon, General Motors, and General Foods. It doesn’t mean Cheerios, Ace Hardware, or New Seasons Market. A company can be, but isn’t necessarily, a brand that people talk about regularly. I wonder how asking about ‘credible information about products or services” would change the answers.
  • Edelman’s President and CEO, Richard Edelman, says that the lesson of the study for marketers is that people have to see message in different places and from different people before they believe it. In fact, they need to see it in five different places. There is nothing mathematical in the study to back this up, and it could be seen as a blatant shill to get advertisers to return to traditional media as part of the ‘big five.’

However, there are some lessons for small business. People are looking for…and using…information to make decisions.  Every decision is not an emotional one. You can become a great source of information for decisions. To do this:

  • Make sure you, and your employees, are experts about what you sell.
  • Have access to industry reports to share with customers who are making important decisions. This can be kept in a ‘resource area’ at your store which could simply be behind a counter.
  • Print out relative ‘consumer reports’ to give customers added confidence in their decisions.
  • Ask for customer testimonials and post them in your store, on your website, and/or in your newsletters.
  • Have access to experts you can call when customers have questions you can’t answer (your salespeople, manufacturers, etcetera).
  • If you can’t answer the customer’s question right away, get their contact information and call them back when you find out. It’s a great way to reach out and build a personal connection.

And I guess the final recommendation: take every piece of research that you didn’t conduct with a grain of salt.


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