The history of word of mouth marketing.
Word of Mouth (WOM) Marketing strategies recently have gained momentum as positive results accumulate. Word of Mouth Marketing pioneer George Silverman created his word of mouth model with what he called "teleconferenced peer influence groups" as he engaged physicians in dialogue about new pharmaceutical products. While conducting focus groups with physicians in the early '70s, Silverman noticed an interesting phenomenon. "One or two physicians who were having good experiences with a drug would sway an entire group of skeptics. They would even sway a dissatisfied group of ex-prescribers who had had negative experiences!"
THE EXPLANATION In "The Anatomy of Buzz" (Doubleday 2000) Emanuel Rosen explains that learning from the experiences of others can actually reduce the risk and uncertainty associated with adopting a new product. Through the 1980s and '90s more than a dozen firms found WOM strategies to be most effective in engaging physicians about new products.
EARLY SUCCESS IN AG In an early WOM strategy, Ciba-Geigy used peer influence selling teleconference programs to accelerate adoption of Dual[R] herbicide in 1979. The following results were documented in a 1981 Harvard Business Review Case Study:
* 33 percent of program participants used Dual compared to 6 percent of Control group
* 36 percent of program participants intended to use Dual the following year vs. 8 percent of Control group
* Average acres treated by participants were 20 percent higher than Control group and average rate used by participants was 10 percent higher than rate used by Control group
DuPont Agricultural Products Database Manager--Relationship Marketing, Tim Kantor, conducted a peer influence selling conference call initiative in early 1992. Kantor said program participants not only adopted the product faster than non-participants did, but their reuse rate was significantly higher. He added, "Teleconference selling was by far the most successful tactic we utilized. We measured a 3:1 ROI in the first year and greater than 7:1 ROI in the second year of using this marketing tactic."
INTERACTING PEER TO PEER AgCall President Gordon Butcher was an early pioneer in bringing WOM Marketing to agriculture with an emphasis on peer-to-peer interaction.
Butcher says, "We founded AgCall in 1987 to engage word of mouth strategies through peer influence tactics. In many cases, we contracted with local farmers who were using a product. They understand the geography, the people, how the product works--and even situations where it doesn't work."
Based in Calgary, Alberta, AgCall has grown to provide a unique set of solutions to its clients. Arron Madson, director of sales and marketing for AgCall, says, "As the industry continues to consolidate, there is less opportunity for an ongoing relationship between the manufacturer, the channel and the customer. Yet there is still a need to connect, service and sell those customers. Through word of mouth and peer influence, we can address those opportunities credibly and effectively without companies having to increase their overhead."
ENGAGED EXPERIENCE-SHARING IN GROUPS
While working in crop protection in the 1980s and '90s and learning about Charlie Beck's business model and Silverman's success, John Finegan, CEO of Beck Ag Com Inc., says, "I could see parallels between the pharma/physician world and how that approach to marketing could be successfully applied to farmers and veterinarians," Finegan says. "We now offer several trademarked forums that provide custom solutions through word of mouth marketing strategies including Beck Ag Com's AgTelecom[R] AgTelePanels and other tactics."
As Omaha, Neb.-based Beck Ag approaches a decade anniversary in Word of Mouth Marketing, Finegan says the best is yet to come. He concludes, "Intimate conversations, engaged dialogue with peers produce more clear understanding for ag marketers and their customers. Better understanding of how products are supposed to work, why they work, what and where they apply means greater acceptance. That's power. That's good, effective marketing."
Kathleen Erickson is president of Erickson Communications and Consulting, Clarks Hill, Ind.
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|Title Annotation:||WORD OF MOUTH MARKETING|
|Date:||Jul 1, 2005|
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