The McKinsey Quarterly published a very interesting article in its April 2010 issue. The article is entitled "A New Way to Measure Word-of-Mouth." I want to highlight a few findings about word-of-mouth marketing from the article:
- Word-of-mouth marketing is the primary reason behind 20 to 50 percent of all purchasing decisions.
- As the size of the purchase increases, the importance of word-of-mouth increases in the decision.
- People use word-of-mouth referrals to get feedback about the functional features of a product or service. Does the product or service actually perform as advertised?
- Not surprisingly, to paraphrase George Orwell, all referrers are equal but some are more equal than others. In short, the receiver of the information must trust the person giving the information. Interestingly, about 8 to 10% of consumers are "influentials." Influentials generate three times more word-of-mouth messages than others. They are seen as trustworthy and competent.
The article is worth reading. Check it out at the McKinsey Quarterly.