Brands and electronic word-of-mouth

Online or electronic word-of-mouth (eWOM) can be defined as “any positive or negative statement made by potential, actual or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet”. Moreover, eWOM also includes opinions and share of information, not only about products but also, about services and brands.

More than ever people are discussing brands on different online platforms and WOM can affect the evaluations of products; affirm it, influence loyalty and play a huge role in product acceptance.

Moreover, WOM can, especially, influence intangible products such as services in the hospitality sector like hotels, restaurants and travel agencies since customers may not have enough experience before they purchase the service.

Types of eWOM

The most common forms of eWOM are ratings and reviews. Reviews can be either information or recommendations, which can be positive or negative. Reviews can also be classified into those written by consumers or by professionals, e.g. food reviewers.

Characteristics of eWOM

There are six important aspects of eWoM

a) Enhanced volume: more people can be reached by eWOM than with traditional WOM. The internet has given more people the power of information and reach.

b) Platform dispersion: comments and opinions about a product are done and dispensed on different online platforms.

c) Persistence and observability: comments remain on the internet well after they are posted and they are searchable

d) Anonymity and deception: the internet, sometimes, allows people to write anonymously, so companies can use it to promote their products through eWOM

e) Salience of valence: this means that customers rate products and those numbers are easily interpreted by people

f) Community engagement: online community platforms like Facebook, Twitter or YouTube allow customers to learn about products from each other.

Thus, not only firms engage customers but also customers themselves influence others. Community engagement can be generated through online interactions among customers and if it is achieved, it can help the firm to have a competitive advantage.
Therefore, companies must find people to engage and create quality content.

Some other important learnings from eWOM are:

– Biases: the more the better. The more eWOM comments can be found, the more encouraged people will be to share a comment, and also the other way round: people might not participate in eWOM if there are only few eWOM messages visible. The problem with this is that only a few products generate most of the eWOM messages

– Disagreement: There is also a tendency to comment only whenever customers disagree with professional reviewers like film critics

– Under-reporting: This is very common as, most times, only very happy or unhappy customers participate in eWOM.

– Drivers of eWOM: Though customer reputation is the main driver of eWOM, firms can encourage customers by offering economic incentives. Moreover, some reasons why consumers seek eWOM are related to reducing their risk, as well as their time and effort when searching and evaluating

Some of the main principles that companies should keep in mind when developing referral programs include:

1. Creating a compelling offer: loyalty points, free product trials or gift cards when sharing the company’s content or liking its Facebook page.

2. Promote it: website, social media platforms, e-mail, communities.

3. Make it easy to share: default messages, Facebook, Twitter, send personalized URL, show what the advocate gets and the offer.

4. Personalise it: make it personal and use the advocate’s name, simple and short message.

5. Keep it top of mind: remarketing and make it easy for the advocate to keep participating

6. Monitor the program and measure the results.

In conclusion and answering the question, “what are key characteristics of eWOM that companies need to manage effectively in order to succeed?”, firstly, it is necessary to understand the different forms eWOM can adopt in different online platforms and emphasise the quality over quantity of the comments or responses. Secondly, it is vital to know eWOM’s key characteristics (enhanced volume, platform dispersion, persistence and observability, anonymity and deception, salience of valence and community engagement), as well as its challenges (e.g. biases) and drivers.

Last line

Online word-of-mouth is an important marketing strategy that affects people’s purchase decisions and therefore companies’ sales and, more than ever, the power of influence now rests with customers whose lived experience with your brand will be reflected in their eWOM.