Chris Cowan, who has experience of marketing for Duracell batteries and Disney explains how word-of-mouth works in a real marketing situation. This Tedtalk was given at the London Business School.
Cowan mentions research his firm has carried out into the motivations of recommenders. Of the eight different kinds of recommender, three were motivated by some kind of economic benefit. One segment in particular was highly motivated by financial reward, and – according to Cowan – accounted for 80% of the financial incentives offered by firms who pay existing customers to introduce new ones (often known as Friend Get A Friend, or FGAF). Cowan argues that financially-motivated recommenders receive relatively low consideration from recipients, and significantly less ‘re-recommendation’ to others of their tips. This appears to support the assumption that benevolence and integrity (not just expertise) are important factors in WOM. But it reveals that economic motivation of some sort is important in a significant number of WOM recommendations, at least some of which must be effective and lead to sustained and mutually satisfying marketing exchanges. This finding contradicts, to some extent, the disinterestedness of WOM which is seen as one of its sources of credibility (compared to the self-interested communications of businesses, for example).
A second impressive aspect of Cowan’s talk is its shift in direction towards the end, when he includes self-interested recommendation, or what we might call self-advocacy, in his remarks on recommendation. His examples include making a job application, and backing an idea in a business meeting. He stresses the importance to the recommender of anticipating how he or she will be seen by the recipient. He argues against recommending ‘at’ a potential recipient, preferring a more empathetic approach. This might provide clues to organisations as to how best to manage communications and incentives for those they identify as opinion leaders.