My Take on "Trust Word-of-Mouth" by eMarketer Digital Intelligence

From June 8, 2009 article in eMarketer Digital Intelligence

Look who’s talking

In a poll of chief marketing officers from the Duke University Fuqua School of Business and the American Marketing Association (AMA), the top overall customer priority named was service excellence, followed by building a trusting relationship.

Unfortunately, building trust can be difficult.

A 2007 Myers Publishing study found only 17% of people trusted advertisers. And things got worse in 2008, when respondents to a Gallup poll said that only 10% of ad practitioners were trustworthy.

According to BIGresearch, however, word-of-mouth recommendations have different effects depending on the type of purchase.

Over one-half of consumers believed that word-of-mouth influenced the restaurants they went to. Slightly more than one-third felt word-of-mouth had some impact on home improvement purchases.

Leveraging word-of-mouth marketing initiatives might matter more to some retailers and product sellers than to others—but whether to a greater or lesser extent, word-of-mouth matters, always.

My Take

"Unfortunately, building trust can be difficult." That's the power of word-of-mouth - the trust is already there.

WOM is a powerful and growing consumer force. Social media is an effective facilitator of WOM because it uses the Web to help consumers cut through advertising clutter and connect with trusted businesses.

BIGResearch's findings re: the percentage of consumers who use WOM looks off. It's difficult to compare the purchase of groceries to the hiring of a home repair contractor - the costs and the frequency of use are on completely different scales.

I doubt grocery shoppers vary supermarkets each week based on what their friends say. It'd be a stretch to accept that 40.7% of the items they place in their carts is due to a word-of-mouth referral.

Whereas our members tells us they hire 8 out of 10 of their home repair contractors based on recommendation of friends and neighbors. Most contractors rely on WOM for their business's survival and 80% of their revenues.

Placing dissimilar categories next to each other in such a summarized table merits a note on the survey methodology.