WOMMA: Credible Reach in WOM Programs

I attended an interesting session at yesterday's WOMMA Measurement and Research Summit and wanted to post before I got too deep into today's sessions.

Lauren Levy from Matchstick presented their approach to the ROI of online and offline WOMM programs.   

She references some of Keller Fay's research that finds that, in general, offline WOM has more credibility than online which actually makes sense when you just think about the people you interact with offline and how you are likely conneted to them in some tangible way (co=workers, friends, friends of friends, family, etc...). Brad and Ed will be presentinmg their own sesison after lunch which should be full of good information.

POINTS
Offline + Online WOM makes the ROI 5x greater. That is due to the greater reach potential of online WOM.

How do they define the influencer? They look at 6 criteria and then run potential influencers through the matrix:

• Attitude - are positive about the product
• Knowledge - have above average knowledge in a category
• Spending
• Behavior
• Status
• Connectdness

FINDINGS

Surprised to see that the average number of individuals spoken to about a product launch was very similar online and offline. there was a product trial experience (a mp3 player and a handheld game device) involved so there was something tangible for the influencer to share with friends. I would have expected more conversations online.

Based upon self-reporting surveys this is how the Reach stacked up:

online people reached - 53,509
offline people reached -1,125

Sales
online activated sales: 5433
Offline activated sales: 480

They then use Keller Fay's research to temper their figures for "credibility"

CREDIBLE REACH

Credible reach is therefore 9x greater online than offline. The ROI is 5-7 times greater online versus offline.

Comments

[Nicholas]

WOM by itself is a tactic - that is - just a method. The way how it becomes a strategy - that is a plan of action - is when it changes to 'referrals.' This simply isn't an issue in semantics.

WOM is non-strategic - which means that you're relying on the 'goodwill' of others.
(For example, have you ever had someone say that they have a new business - and within 6 months they've moved on? - that's the lack of power that WOM has).

Referrals however are strategic - you're implementing a desired act - that is asking and directing. For example, if the business owner had implemented a sign-up sheet - where people listed say 5 others who they know that might use that business owners products or services - or even handing out invitations to that business owners launch -would have done a whole lot more use than 'asking for a favor.'

Referrals also generate longer term clients. Why? Simply b/c the person doing the 'referring' is directly interested in the outcome. Why? No one likes to be thought of as giving the 'wrong' advice.

In the end, there has to be a distinction between WOM and Referrals.