WORD OF MOUTH

Case Study:   NEW WORD OF MOUTH

Brushing aside the myth that ‘Word of Mouth (WOM) marketing is luck’, Procter & Gamble (P&G) explored the challenges and promises of WOM, and came up with a marketing division called ‘Tremor’. Tremor integrated WOM into a total marketing effort, executed plans in its entirety, and measured its impact after the campaign was complete. Tremor was created in 2001, targeting teens in the age group between 13 and 19, tapping their gossip factor. There are 24.3 million teenagers in US within this age group and they spend nearly $120 billion a year on various goods and services. Moreover, they have influence over another $485 billion of purchases that parents make on things such as groceries, computers and cars.The teenagers are independent and diversity seekers, so they are not loyal customers and can be easily influenced. Tremor, in a span of two years had built a national network of teenagers, 280,000 in number  who advocated from movies to milk, shampoos to motor oil, pushing products on friends and family and that too for free.. The success was evident from the fact that Tremor’s revenue for 2004 was projected to be $12 million. But WOM is a marketing tool and not a complete marketing effort. David Godes, a business professor at Harvard, said, “If it (WOM) gets too pervasive, there could be a consumer backlash. It needs to stay on the periphery.”

The Business Model

Tremor’s business was based on a research on how trends develop They identified that there are two types of people associated with trend, the ‘Trend Setters’ and the ‘Trend Spreaders’. Trend Setters are people who thrive on being different from others. They dislike being copied and once someone copies the style, they do not consider it trendy anymore. Though these people accept a trend early, they may not really advocate it.Where as the Trend Spreaders, as soon as they observe a trend, get into the act of getting all their friends to adopt the trend. These are the most valuable people for a brand. It just requires 1%of the trend spreaders to influence the company’s sales dramatically.

The other significant feature of Tremor’s research was the distinction made between the use of advocacy and amplification within WOM marketing .Advocacy implies that the new idea or product is worth talking about. While amplification are platforms, which makes it easy for teenagers to speak about the idea or the product. There are products that require high advocacy but low amplification.

P&G has successfully used Tremor for marketing its products. The point that Head &Shoulders dandruff shampoo kills germs that cause dandruff could not have survived in the mainstream ads.

But, such a sensitive point was successfully propagated through the Tremor teenagers. In some other campaigns for P&G, the connectors voted for the music for Pringles snacks commercial,selected the model for Pantene ads and also gave their opinion on which commercial should be aired for Herbal Essence’s new variant, the fruit fusion tropical showers. Tremor was also involved in marketing Old Spice deodorant, a new flavour of Pringles potato chips and Naxzema skin care products.

Why profiled on Startup Re P&G tested a new line of Cover Girl Outlast Lipcolor lipstick in Providence using product information and sample cards. Within eight weeks, the market witnessed an increase in sales by 14%. A study found that on an average a teenager spoke to nine people and two-third of those people intended to make a purchase. A successful Tremor campaign could boost sales by 10% to 30%.

Tremor is not the only WOM marketing initiative. There are other smaller players too. Brandport, an advertising company, has recruited a large pool of young people to watch their ads and to review them. But unlike Tremor, Brandport offers direct payment to people who render their services. Each of the viewers is asked a few questions after they watch a 30 second ad. In return Brandport pays them approximately $5 for every 10 ads. On an average, each member previews thousand ads per month. The company’s success is traced to the high recall rates for the ads created by them.

Boston-based company BzzAgent, a WOM marketing company, has 20,000 people to pitch products and services for their clients. Their offerings ranged from cosmetics to books to holiday packages. In return these people get personalized feedback on their activity fromBzzAgent’s clients like Anheuser-Busch (a company having interest in adventure park and packaging), Estee Lauder (world’s leading manufacturer and marketer of quality skin care, makeup, fragrance and hair care products), and Penguin group (publishers), but these initiatives are limited to their niche.

In the era of customer delight and ecstasy, where customers want something honest and believable, WOM seems to be the future (Annexure II). But,WOMis not ‘the’ marketing plan, and it has to be supported with other media. Teenagers may talk about the product but not necessarily push the products. And if the companies push more and more products, then the teenagers tend to get bored too easily. Most people just talk to a few friends or family members about the positive or negative experiences. Few are in a position to communicate and influence a large number of people.

Moreover, in the Tremor network, there is no check on the authenticity of the data provided by  the teenagers about themselves. There had been instances where the campaigns have gone amok.

The Valvoline products information and samples were passed on to 15 year olds, who did not even have driving learners permit. Tampax – feminine care learner’s kit went out to Tremor Teen girls who were much older for such campaign. A lot is hit or miss.

Questions

1          Discuss the concept of WOM communication

2.         Why was P&G successful in WOM

3.         Why WPM cannot be used as stand alone strategy