The Word Of Mouth Company

4

We often equate word of mouth development with marketing-, PR- and
advertising-related activities.

However, it seems WOM is the result of early company decisions around
product, employees and culture
.

Under this hypothesis, perhaps WOM shouldn’t even be contrasted to
advertising.
Certainly a good company with a good product can feed WOM with
marketing-related initiatives. But real WOM is the result of strategies and
decisions regarding capital expense, product development, process improvement,
cultural direction, and hiring.

Consider the following conceptual model:

Consider Company X. They invest and/or focus on the right
things…preferably in their formative stages (although a company can
‘reinvent’ themselves and products). I say focus, because there are cases of
huge WOM companies which have little up front investment (ex: Craig’s List).
For those companies you can trade capital/costs with a cultural focus on
customer-centricity and hiring the right employees.

For them, perhaps WOM "initiatives" aren’t even discussed or
employed. These companies make the decisions and investments that create a
value customers appreciate enough to spread the word.

For Company Y, the employees aren’t right, the product isn’t right,
and internal processes aren’t right. In fact, starting at the top and
beginning, the culture isn’t right. Any late-stage WOM "initiatives"
won’t produce much for Company Y. They will be forced to spend more money on
advertising in an attempt to shape perception…which may be voided by negative
WOM. As time goes on for Company Y, they will increase costs, leading to
increased prices, leading to lower demand and lost market share (i.e. failure).

Now, this model is conceptual and has no official substantiation vis-a-vis a
formal "study" or "statistics". But it feels right. That’s
my WOM on the topic.

4 Responses

  1. Drey says:

    口碑

    今天看到国外有人提出了一个模型,从资金投入和运作成本方面比较了有口碑的公司和没口碑的公司的情况。大意是有口碑的公司在前期投入多,后期投入少,而没口碑的公司则相反。

  2. Digressions says:

    http://montysbox.typepad.com/excuse_me_while_i_digress/2006/05/word_of_mouth_m.html

    Word of mouth marketing – this is the essence of Sam Decker these days. Sam Decker has spent his career as a marketing leader maximizing technology and online business results. Sam is now bringing his expertise into the market as

  3. Digressions says:

    3 Questions with BazaarVoice VP Sam Decker

    Word of mouth marketing – this is the essence of Sam Decker these days. Sam has spent his career as a marketing leader maximizing technology and online business results. Sam is now bringing his expertise into the market as the

  4. ziggy1703 says:

    The new distributed viral forum/blog/wiki/classified/etc viral advertising engine is here. Spread the word about your product or service in short amount of time to millions of people. Get residual traffic and increase search engine visibility by using long lasting backlinks. Low cost, no pay per click fraud issues and great ROI. http://widecircles.com?imt=3

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