Accelerate Purchases with WOM

Incentivize your customers to talk about your store to others. Word-of-mouth initiatives can expand your customer base, bringing you customers who would otherwise not have come in so soon. WOM also can lead to current customers buying from you items they would otherwise not have purchased so soon. Don’t overlook this second type of payoff.
     Purchase acceleration is not the major effect of WOM, according to a consumer science inquiry headquartered at New York University and Hebrew University of Jerusalem. Overall, about 70% of the profitability from retailers’ WOM initiatives derives from market expansion and 30% from purchase acceleration. A 30% impact on profitability is still quite worthwhile. Also, the researchers found that the proportions can vary widely across the real-world range of market conditions.

• When starting up a WOM program, stores with a larger existing share of the market see relatively more profitability from acceleration than will those with a smaller market share at the start. 
• When retailers offer incentives to influential customers for talking about the store, this usually increases the relative advantages of acceleration compared to expansion. 
• As a WOM campaign continues, the value of acceleration grows and the value of expansion shrinks. However, the profitability from purchase acceleration shows itself more quickly than the profitability from market expansion. 

     Ask your customers where they’re looking for recommendations and then encourage them to furnish their recommendations in those sorts of places. As part of incentivizing, mention to the customers reasons important to them for giving specific, balanced information to others.
     The frequencies with which consumers read and write reviews differ by product category. With a toy, about 20% will read reviews when shopping and about 10% will write a review after purchase. With an automobile purchase, about 40% will read reviews when shopping, but only about 5% will write a review after purchase. So for automobile-related products, your encouragement to do WOM should be more vigorous.
     In general, family and friends are the most popular WOM sources. For restaurants, casual acquaintances are the second most popular source. For financial products, family and friends take second place to expert and professional WOM.
     For almost all products and services, consumers are motivated to help other people make smart purchases. With automobiles and with entertainment, a distinctive motivator is to display expertise. With the home furnishings and food/beverages categories, a distinctive motivator is the opportunity to help improve the products.

Click below for more: 
Generate WOM in the Right Places 
Have Shoppers Share Word-of-Mouth with You