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    Word of Mouth Fading to Whispers

    Shrinking budgets turn consumer extroverts into shrinking violets: Colloquy

    Despite an explosion in consumer conversation technology, Americans have cut back substantially since 2008 on the opinions they share by word of mouth about companies and their offerings.

    That’s according to research from Colloquy, which surveyed 3,295 U.S. consumers of whom 58 percent said they often have conversations with family, friends and coworkers about products and services they’ve used. That’s down from 73 percent when Colloquy posed the same question in a 2008, a 20 percent drop. Additionally, 57 percent of respondents in the latest survey said they often recommend products and services to others, compared to 75 percent in 2008, a 24 percent decline.

    The reduction in WOM activity can’t be attributed to a shortage of ways for WOM views to spread, which have expanded via cell phones and the Internet. Rather, Colloquy asserts the economic downturn is to blame and explored the notion by taking a close look at respondents holding favorable and unfavorable outlooks compared to the previous year.

    Of respondents who reported their households are doing better economically this year than last, 71 percent said they often have conversations with others about the products and services they use – similar to last year’s results. But among those who now see themselves as worse off, 56 percent reported having brand conversations and 55 percent said they make product recommendations. Looking to the future, 74 percent of respondents who see their own financial outlook brightening said they have conversations about products and services, versus 55 percent for those who see their financial outlook worsening.

    “Consumers on shrinking budgets don’t seem to be in the mood to talk about the hottest new restaurant, the brightest plasma screen, or the best airline. Or, if they are in the mood to talk, they may be sensitive to the possibility that others in more dire straits are in no mood to listen,” said Colloquy partner Jim Sullivan.

    Colloquy has published a white paper, “Urban Legends: Word-of-Mouth Myths, Madvocates and Champions – Debunking Myths About Brand Conversations and Word-of-Mouth in Social Media,” available free of charge at www.colloquy.com/whitepapers.

    Colloquy previously previewed select findings from its latest WOM research showing that more than one out of every four consumers said they are far more likely to spread the word about a bad experience with a product or service than a good one. Colloquy experts adopted a little-known term, “Madvocates,” to describe consumers predisposed to engage in negative WOM practices.

    “Colloquy’s 2011 WOM study doesn’t reveal a magic bullet to help companies engage with consumers but it does suggest tactics that loyalty marketers searching for truth in a growing sea of urban legends can execute within their social media and word-of-mouth strategies,” said Colloquy managing partner Kelly Hlavinka, who offered the following tips:

    - Make sure customers not only have an opportunity for a dialogue (not a monologue) with the brand, but with each other – a “trialogue.”
    - Involve customers in WOM programs by forming online social-sharing communities, panels and co-development platforms. Do your own social media.
    - Be innovative and make sure content is relevant, fresh and rewarding. Start by transforming your marketing mindset from “incentive” to “service.”


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