Concerns on this outline/essay: There are certain points where I feel it would start to sound too sales like, too much of an evangelical piece about the benefits of WOM, rather than a description of WOM and its practices. Essentially, WOM = Consumer Insights; the collection, broadcast, and amplification of consumer insights. Since my topic basically is a method to harness insights, I am not sure if I am spending enough time actually speaking about how it relates to insights, or if that will be necessary. Basically, how blunt should I be in pointing out the topics discussed, with their relation to the course? (soliciting for product recommendations is gaining insights, UGC is integral to decision making, etc).

Outline:
Across all societies and cultures the need for community and belonging is one of the basest of human needs. Only usurped in importance by physiological needs, and the need for safety (according to Maslow’s Hierarchy of Needs), it then makes sense that humans are naturally drawn to conversation, influenced by conversation, and hold conversation in high esteem. Conversation about goods, products and services, or Word of Mouth (WOM), has been one of the oldest and most influential forms of marketing. The recent explosion of word of mouth marketing has begun to change the marketing landscape, as well as radically altering the consumer shopping experience; all while still in its infant stages.

Tracing its roots back to ancient bazaars (and presumably further), word of mouth was a reliable way for consumers to interact with one another, and spread information: which products were the most reliable, where were the best prices, which vendor had the freshest fish, which vendors may use shady business tactics, etc. Even as influential as it is, WOM has fallen in and out of favor as a marketing tactic, with most 20th century marketing efforts focusing on rigorous control of information about a firm’s products, and even more strict control over a brand’s image. Frequently, companies wanted a one way conversation, with everything related to image, lifestyle, product features, and product benefits flowing directly from the firm to the target market, and the conversations stopping there. Recently, due to the growth of the internet and eCommerce, firms have begun to harness the power of WOM and amplify its effects to their benefit, online and offline.

This study will attempt to provide a holistic view on the current state of word of mouth marketing, such as how word of mouth is harvested and displayed, the costs and benefits of WOM to consumers and firms alike, the effects WOM is having on the current marketing landscape, the ethics involved while using WOM tactics, and where this branch of marketing will go in the future.

1) Avenues of presenting WOM and UGC
a) UGC/ Ratings and Reviews/Ask and Answer/ Stories – list of all companies that use these ugc tactics to their advantage. Power of Amazon. Prevalence of these features on IR 500.
b) Blogs – blogs have recently exploded, with corporations pushing blogs, and highlighting personal blogs that represent their interests. Blogs can also prove an “organic” form of UGC/WOM.
c) User Communities – Less tangible than R&R/A&A, but still incorporates WOM to a high level.
d) WOM is being used on and offline – collection is typically online, however the buzz created is being displayed in stores, and used to influence consumer’s opinions and reassure them of product quality.

2) Benefits of WOM
A) Costs – WOM is incredibly cost effective. Guerrilla marketing and viral marketing spreads at an incredible rate, and costs literally nothing to create. Further more, programs such as R&R, A&A are incredibly cheap from a marketing standpoint and incredibly influential (Bazaarvoice slidedeck stats).
B) Relieving the paradox of choice – With sometimes hundreds of possible choices for any given product category, UGC can dramatically reduce the number of options to select (based on sorting by best rated, and reading reviews). Further more, “top rated” products are typically displayed on most category pages, and retailers are finding ways to highlight products the community at large finds positive. Add BV stats.
C) Authenticity – Consumers crave authenticity. Those who try to fake authentic WOM usually end up failing, but those who display WOM in unadulterated fashion benefit from a sense of being “reliable, trustworthy, truthful”. Negative reviews, while unpleasant, can add to this sense of authenticity. Furthermore, negative reviews can add authenticity to a product by displaying both sides of the view, something sorely lacking in most traditional advertising, and something that the consumer values and trusts.
D) Brand engagement – WOM allows users to connect with the brand on a very personal brand, becoming an advocate for it. Most reviews are positive, so allowing customers to voice their opinions bring them closer to the brand.

3) Cons of WOM
A) Measurement – WO M is incredibly difficult to track its effectiveness. It is easy to trace pieces of content (blog posts, reviews, etc) but not easy to track DIRECT impact, both in online and offline channels, so retailers and mfg alike have a hard time justifying.
B) Lack of control – WOM is unpredictable. Although most reviews are positive, a brand can never predict what exactly the results will look like, so WOM is considered a bit unpredictable, and radical compared to traditional marketing methods. Furthermore, most brands keep a conscious effort to control all parts of their image. Although companies know that the conversations are already happening, many are weary of amplifying the effects of negative conversations.

4) Effects of WOM in marketing
A) Changing the 4 P’s – Insights from WOM are changing the 4 P’s…especially the promotion aspect. Some companies can spend almost nothing (top 100 beers in America survey), and be incredibly successful without budgets spent on traditional promotion. Shift towards promotion and amplification of WOM strategies to grow brand, enhance brand, solidify value, etc.
B) WOM validated by mass media – look at pizza hut commercials where they try and replicate WOM for pizza hut pastas. Companies recognize the voice of the consumer being incredibly influential on ALL OTHER consumers, and try to harness that power (but also place limitations, when unsure of WOM successes for their brand).
C) Increased Sales/ customer retention/ company benefits - http://bazaarvoice.com/industryStats.html

5) Ethics in WOM
A) Do not mislead customers to believe acting is true WOM – this will dilute the power of WOM in general, and cause others to reject WOM as viable at all.
B) Keep results factual – Don’t delete reviews simply because of being negative. Remain true to the findings and intent of WOM collection, amplify if it will sell

6) Future of WOM
A) Increased dependence - online and offline consumers will DEPEND on WOM to guide decisions in a wasteland of products. Furthermore, companies are finding new ways to incorporate the word of mouth they gather into traditional marketing ventures, and are finding ways to analyze the responses to improve their standing in the market.
B) Increased consumer input – consumers already play a giant role in what makes up a product, soon they will begin to be solicited for ideas to improve their products/lifestyles. While this seems obvious, a large customer base and influential and willing consumers may provide some serious solutions. (Staples new product ideas).

7) Conclusion
A) WOM and UGC are impacting various areas of business, online and offline, thr
B) What I learned:
I: The eagerness of consumers – consumers crave community and discussion, and are willing to engage in anything that they are passionate about. This provides raw, unadulterated content for marketers to analyze and promote, to influence other consumers, and possibly modify their own products or marketing efforts.
II: Shift in Ideology – Rather than pushing the conversations people are having on a daily basis to the wayside, companies are embracing these conversations as a centerpiece to their marketing strategies.