WORD OF MOUTH MARKETING
SUSTAINED SALES INCREASES WITH WORD OF MOUTH MARKETING
by Kathleen Erickson
This is the third in a series of articles sponsored by Beck Ag highlighting the latest results of new research focused on Word of Mouth Marketing (WOMM).
We've all seen the caveman ads. Who would have thought about cavemen as ad executives? But that's how and when the first marketing of any kind began - by word of mouth. Word of Mouth Marketing (WOMM) today is recognized as a solid marketing strategy, and it has been used in numerous sustained marketing strategies through the last 25-30 years.
Beck Ag CEO, John Finegan noted, "It is significant to review the data exposing the fact that WOMM has successfully been used to drive product sales for a generation or further - back to the days of the Lasso/Dual wars."
Finegan, who has invested a career in WOMM, noted an early strategy employed by Ciba-Geigy. "They used an interactive form of WOMM, peer influence selling, in a teleconference campaign to accelerate adoption of Dual herbicide in 1979." The results were documented in a 1981 Harvard Business Review Case Study:
• 33% of program participants used Dual compared to 6% of the Control group.
• 36% of program participants intended to use Dual the following year versus 8% of the Control group.
Average acres treated by participants were 20% higher than the Control group and average rate used by participants was 10% higher than the rate used by the Control group
Tim Kantor, DuPont Agricultural Products Database Manager, Relationship Marketing, conducted a peer influence selling campaign in early 1992. Kantor said program participants not only adopted the product faster than non-participants, but their re-use rate was significantly higher. He added, "Teleconference selling was by far the most successful, effective tactic we utilized. We measured a 3:1 R.O.I. in the first year and greater than 7:1 R.O.I. in the second year of using this marketing tactic."
WOMM continues to gain strength as an effective tool for ag marketers. According to Finegan, "To date, Beck Ag has engaged nearly half a million participants in word of mouth programs. This proves that our clients trust us with their customer base. It certainly shows that our approach works."
Over the years, Finegan noted that Beck Ag has successfully helped clients deal with their challenging marketing dilemmas by implementing WOMM strategies. "In one difficult situation, we had a client who had tested several product messages and none had seemed to resonate with growers. Concurrently, Beck Ag was running AgTelecom (AT) programs which featured the client's product and communicated all of the client's key marketing messages about the product."
One month after participating in the AT word of mouth programs, participants were surveyed. The results showed that 60% of the participants had already purchased the product.
David Flack said, "While I was North America Group Vice President at The Scotts Company, we executed 10 or more programs with Beck Ag. We experienced excellent results in terms of delivering our product message and in generating solid grower leads for the sales force to close."
Flack added, "It is simply amazing to listen to a grower sell other growers based upon his experience with your product. A high profile grower used as a peer will sell more product in an hour on the phone that our sales force will sell all week."
Purdue University undertook extensive research of WOMM in 2001. The findings showed steady increases in product sales over a three-year period following the WOMM programs. In addition, the results provided a compelling ROI for the sponsor companies.
In 2007 Purdue completed another study of the impact of WOMM. With more than 700 interviews conducted, data was collected comparing initiative participants to a control group. Research co-lead, Dr. Joan Fulton said, "A key point of our findings is that WOMM does positively increase sales. In addition, through our interviews we were able to learn about how participants changed their behavior with respect to the product. There was a strong correlation between the changed behavior and the strategy that the client had set for the initiative."
Finegan concluded, "We're confident in the sustained value of WOMM. Now we're making history in the substantiated research that proves sustained sales increases over time. That's impact. That's Word of Mouth Marketing."