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Word of Mouth: Why is it so Significant?
Bodo Lang, Manukau Institute of Technology
Abstract
Word of mouth (WOM) is a concept of ever increasing importance to both marketing
academics and practitioners. Despite the interest in WOM, no research to date has
summarised the factors that contribute towards WOM's significance. Based on a synthesis of
the literature, this paper develops a conceptual framework of the factors that contribute
towards the significance of WOM. Eleven factors are identified that contribute towards
WOM's significance. The eleven factors can be summarised under two headings: WOM's
pervasiveness and persuasiveness, both of which are thought to be interdependent, rather than
independent of each other.
Introduction and Purpose
Word of Mouth (WOM) is a concept of strong interest to both marketing academics and
practitioners. From an academic perspective, WOM has attracted research attention during the
past six decades (Gruen, Osmonbekov, and Czaplewski, 2006; Knapp, 1944). Last year alone
nineteen academic articles were published with the term "Word of Mouth" in the title (see
references). Thus, WOM is an area of sustained research enquiry and the intensity appears to
be increasing. Practitioners also have a growing interest in WOM; whether it is margarine
(Elliott, 2005), hybrid cars (Guyer, 2005), music (MusicWeek, 2005), books, (Cohen, 1999),
Internet telephony (Davis, 2005), or handheld video games (Godes and Mayzlin, 2004),
marketing practitioners are increasingly shying away from traditional mass communication
tools in favour of WOM campaigns. In line with this trend, dedicated WOM agencies have
emerged that focus on generating and spreading WOM for their clients (Frost, 2005).
Furthermore, two new practitioner associations have been launched to cater exclusively for
WOM marketing practitioners (Howell, 2005).
It appears that both marketing academics as well as practitioners would benefit from a better
understanding of WOM and the reasons why it is so significant. A 'deconstruction' of the
factors that make WOM so important may allow marketing practitioners to develop more
diagnostic ways of measuring the effects of (potential) WOM campaigns. This would echo
researchers' calls for greater use of WOM in market research (Reichheld, 2003). Thus, the
overall goal of this article is to develop a parsimonious conceptual framework of the factorsthat contribute towards WOM's significance.
Word of mouth (WOM) can be described as informal communication between consumers
about goods and services without either party being formally rewarded for this
communication (Anderson, 1998; Dichter, 1966; Westbrook, 1987). While early definitions
focused on oral WOM (Arndt, 1967, 1967), more recent research includes non-personal
communication via electronic channels, such as email, mobile phone text messages, bulletin
boards and other means that would comprise what may be called digital WOM (Bickart and
Schindler, 2002; Newman, 1999; Stokes and Lomax, 2002).
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WOM's Significance
Researchers have recognized that WOM is probably the most powerful force shaping
consumer behaviour (Whyte, 1954), which lead researchers to describe WOM as almost
irresistible (Arndt, 1967) and a response that may be among the most important (Brown,
Barry, Dacin, and Gunst, 2005).
How persuasive WOM is, particularly in comparison with more traditional marketing
communication channels such as advertising, has long been a topic of inquiry (Katz and
Lazarsfeld, 1955). Research has found that informal information, such as WOM, was a more
important source of information compared to mass media such as print or television
advertising (Beal and Rogers, 1957; Buttle, 1998; East, Hammond, Lomax, and Robinson,
2005; Hinde, 1999; Katz and Lazarsfeld, 1955; Traylor and Mathias, 1983). WOM has even
been found to be more important in influencing consumers compared to independent third-
party reviews such as Consumer reports (Herr, Kardes, and Kim, 1991; Hinde, 1999; Price
and Feick, 1984). Lastly, WOM can also be more powerful than the consumers own attitude
toward a product (Bourne, 1957).
While it has become clear that WOM can dominate other information channels, no research
has summarised why WOM has such a significant impact on consumers; this is what this
paper wishes to investigate. Thus, this paper will now turn to a synthesis of previous research
to fill this gap.
At the most fundamental level, one could think of two fundamental factors that fuel WOM's
significance: The pervasiveness of WOM, that is its reach or the number of consumers
exposed to it, and the persuasiveness, that is its impact on consumers' attitudes and
behaviours. The following two sections synthesize findings from the literature regarding the
pervasiveness and persuasiveness of WOM and build a conceptual framework consisting ofeleven drivers that contribute towards the significance of WOM.
The Pervasiveness of WOM
Based on extant literature, seven factors can be thought of as contributing towards the
pervasiveness of WOM. Firstly, WOM is a global phenomenon (Money, 2000; Takada and
Jain, 1991; Watkins and Liu, 1996), although individualist and collectivist cultures may
engage in WOM to a different extent (Watkins and Liu, 1996). WOM has been found to be of
importance in western countries such as the UK (Ranaweera and Prabhu, 2003; Stokes and
Lomax, 2002), the US (Brown et al., 2005; Whyte, 1954), Canada (Bansal and Voyer, 2000),
Germany (Wangenheim, 2005; Wangenheim and Bayn, 2004) and Sweden (Anderson,1998), Asian countries such as Japan (Money, 1995; Money, 2000), South Korea (Babin,
Yong-Ki, Eun-Ju, and Griffin, 2005) and Singapore (Chew and Wirtz, 2001; Wirtz and Chew,
2002) and developing nations such as India (Ennew, Banerjee, and Li, 2000) and the former
Soviet Union (Bauer and Gleicher, 1953). Thus, WOM can be seen to be effective across
geographical borders.
Secondly, WOM operates across all industries. WOMs importance stretches across diverse
industries encompassing corporate services (Money, 2000), personal services (Reichheld,
2003; Swanson and Kelley, 2001), basic goods (Belk, 1971) and complex goods (Arndt and
May, 1981; Gilly, Graham, and Wolfinbarger, 1998; Herr et al., 1991; Price and Feick, 1984;
Schindler and Bickart, 2002; Stuteville, 1968; Swan and Oliver, 1989; Westbrook, 1987).
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Thirdly, the proportion of consumers engaging in WOM has been found to be very high
(Bone, 1995; Bristor, 1990). Data from the Swedish and US customer satisfaction barometers
indicate that more than half of all consumers engage in WOM (Anderson, 1998). Similarly,
57% of people who had initiated contact with a manufacturer (e.g. email, phone, web) talked
to at least one other person about their experience (Bowman and Narayandas, 2001) and more
than 70% of consumers had engaged in WOM after product consumption (i.e. watching amovie) (Bayus, Carroll, and Rao, 1985). Other research findings have suggested that as many
as 80% of consumers engage in WOM (Bone, 1992; Larsen and Hill, 1954). Thus, a sizeable
proportion of consumers engage in WOM, across a variety of industries.
Fourthly, the proportion of consumers relying on WOM has been found to be very high.
While the precise proportion is disputed (East et al., 2005; Walker, 1995), it is clear that the
majority of consumers often rely on WOM for decision-making. The proportion of consumers
who rely on WOM as the main source of information can vary from nine percent to 65% (East
et al., 2005). A number of other studies support the notion that at least half of all consumers
rely on WOM when making purchase decisions (Barnes, 1986; Engel, Blackwell, and
Kegerreis, 1969a; Engel, Kegerreis, and Blackwell, 1969b; Feldman and Spencer, 1965;Walker, 1995).
Fifthly, WOM can spread quickly. In a study of how many people an innovator had spoken to
a few days after trialling a product, 90% of innovators had told at least one person about their
experience, while 40% of people had told two or more people (Engel et al., 1969b).
Importantly, the speed with which WOM is re-transmitted is even greater for digital WOM
(Phelps, Lewis, Mobilio, Perry, and Raman, 2004).
Sixthly, one of the key factors in allowing WOM to spread quickly is the fact that WOM may
be re-transmitted (Bristor, 1990). That is, WOM may be received by a consumer who then
passes the message on to another consumer and so forth (Arndt, 1967). Early research calledfor an investigation of this phenomenon (Richins, 1984; Sheth, 1971) with subsequent
inquiries showing that re-transmission is a real world phenomenon in traditional settings
(Brown and Reingen, 1987; Reingen, 1987; Reingen and Kernan, 1986) as well as for digital
WOM (Phelps et al., 2004).
Lastly, one of the most powerful facets of WOM is that it can be shared with more than one
person, i.e. multiple dyads. Some research has found that WOM is 'only shared on average
with a relatively low number of three people (Bowman and Narayandas, 2001; Larsen and
Hill, 1954). Using Swedish and US national customer satisfaction barometers, it was found
that those who engaged in WOM, talked to an average of 9.5 people (Sweden) and 7.9 people
(US) (Anderson, 1998). The number of people talked to by each WOM sender can varyconsiderably from zero to up to 35 in a traditional WOM context (Larsen and Hill, 1954).
Digital WOM appears to vary even more substantially, ranging between one and 177 digital
episodes in a month (Phelps et al., 2004). After having discussed the pervasiveness, or
reach, of WOM, the following section discusses the persuasiveness or impact of WOM.
The Persuasiveness of WOM
Based on the extant literature, four factors have been identified that contribute towards the
persuasiveness of WOM. Firstly, it is generally agreed that the persuasiveness of WOM is
mainly due to WOM being seen as credible, trustworthy and reliable (Arndt, 1967; Dholakia
and Sternthal, 1977; Heckman, 1999; Richins, 1984; Sobczak, 1990). Secondly, WOM hasbeen found to be highly persuasive due to the receiver's ability to give feedback (Arndt, 1967,
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1967). Thirdly the sender's ability to deliver tailored (Lazarsfeld, Berelson, and Gaudet, 1948)
or personalized information (Bolen, 1994) in which information may be added or filtered or
one's own interpretation is added makes it more relevant to the receiver, thus making WOM
highly persuasive (Arndt, 1967). Lastly, research has identified that more accessible and
diagnostic information has a greater impact on consumers (Feldman and Lynch, 1988).
Diagnosticity in this instance refers to how useful information is for making a purchasedecision, for example, how much brands differ and whether certain brands are judged better
than others. Importantly, WOM fares well in both accessibility and diagnosticity compared to
non-personal sources of information such as advertising (Herr et al., 1991; Lynch,
Marmorstein, and Weigold, 1988) thus making it a highly persuasive communication channel.
Discussion of Conceptual Framework
So far this paper has distilled eleven factors that contribute towards the significance of WOM.
Figure 1 integrates these factors into one framework. The following section discusses the
interrelationship between the pervasiveness and the persuasiveness of WOM.
Figure 1: Conceptual Framework of Factors that Contribute Towards the Significance
of WOM
WOM
Importance of WOM
Pervasiveness of WOM
Persuasiveness of WOM
Multiple dyads
Re-transmission
Can spreadquickly
Global incidence
Across productcategories
High proportionengage in
High proportionrely on
Accessible anddiagnostic
Tailored andpersonalised
Credible,trustworthy &
reliable
Ability to givefeedback
The labels pervasiveness and persuasiveness appear conceptually clear cut. That is, one is
concerned about the reach of WOM, while the other is concerned about the impact of
WOM upon consumers once they are reached. However, one should consider the
pervasiveness and the persuasiveness of WOM not as two independent factors but rather as
two interdependent factors. Furthermore, both factors appear interdependent upon each other.
Firstly, the pervasiveness of WOM impacts on the persuasiveness of WOM. The greater the
number of people who utter consistent WOM to a consumer, the higher the chances of that
consumer following the collective advise of WOM senders (Watts, 2003). Thus, the sheer
pervasiveness of WOM can contribute towards the persuasiveness of WOM. Secondly, thepersuasiveness of WOM can impact on the pervasiveness of WOM. As discussed earlier, the
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pervasiveness of WOM is in part driven by the presence of multiple dyads and consumers'
ability to re-transmit WOM to other consumers (Anderson, 1998; Bowman and Narayandas,
2001; Brown and Reingen, 1987; Larsen and Hill, 1954; Reingen, 1987; Reingen and Kernan,
1986). Research has found that message content, including its persuasiveness, can influence
consumers intentions to share WOM with other consumers (i.e. multiple dyads) and
consumers' intention to re-transmit WOM (Phelps et al., 2004). Thus, the persuasiveness ofWOM can also impact on the pervasiveness of WOM.
This discussion suggests that each of the eleven factors may be powerful individually, but that
a combination of two or ideally more of these factors would yield stronger synergistic effects.
In this sense, the framework may be seen as a checklist for an 'ideal WOM campaign'; the
more factors that apply, the more powerful the WOM campaign is likely to be. Thus, the
framework may be used by practitioners to assess a WOM campaign's likely impact prior to
its implementation.
Conclusion
In summary, the first conceptual framework of the factors that contribute towards WOMs
significance has been proposed. The framework was developed by synthesizing WOM
research from the past six decades. Two higher order factors, the pervasiveness, or reach, of
WOM and the persuasiveness, or impact, of WOM were identified. Eleven factors were found
to have contributed towards these two higher order factors. Lastly, the pervasiveness of WOM
and the persuasiveness of WOM were conceptualized as two interdependent factors.
It is hoped that this framework serves as a useful framework for both academics and
practitioners. For practitioners, this framework could serve as a diagnostic tool to assess the
appropriateness of WOM to a particular situation. For example, the tool could be used bycompanies to assess how fully the eleven factors apply to a given situation. The more fully the
factors apply, the more appropriate WOM may be as a communications tool in that particular
situation. For instance, if the content of a WOM message is highly engaging, then multiple
dyads and re-transmission rates are likely to be high, thus resulting in higher pervasiveness
and persuasiveness of the message. It is also hoped that the framework presented in this paper
is of use to academics. During the past six decades, significant progress has been made but
some questions remain unanswered. This paper wishes to fill one of these gaps by making the
significance of WOM more explicit. It is also hoped that the proposed theoretical framework
will stimulate discussion and highlight WOM's significance even further.
The extensive review of the literature is a good starting point for building the framework.However, this has restricted the research to being purely inductive in nature. A logical next
step would be to engage in a test of the framework, or, in other words, a deductive step. Such
progression would result in a more developed understanding of a phenomenon that has caught
the imagination of both marketing academics and practitioners, in itself a rare occurrence as
often academics and practitioners priorities are not closely matched. WOM maybe one of the
few exceptions to this; thus allowing for both: Relevance and theory development.
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