Consumer Behavior 101: Reference Groups and Social Influence - WordofMouth Organic Amplified eWOM Influencers

What It Is

Word-of-mouth (WOM) refers to the informal communication between individuals about a product, service, or brand. Organic WOM occurs naturally, while amplified WOM is facilitated through social media and other digital channels. eWOM (electronic word-of-mouth) is a specific type of amplified WOM that takes place online. Influencers are individuals who have a significant following and can shape consumer opinions and behaviors. A notable example of amplified WOM is the 2011 Old Spice campaign, where the brand partnered with social media influencers to create engaging content and drive conversations about their products. This matters for understanding consumers and building marketing strategy because WOM can significantly impact purchase decisions and brand reputation.

Key Terms & Concepts

• Word-of-mouth (WOM): Informal communication between individuals about a product, service, or brand.
  • Example: A friend recommending a new restaurant to a colleague.
• Organic WOM: WOM that occurs naturally, without external influence.
  • Example: A customer sharing their positive experience with a product on social media without being prompted.
• Amplified WOM: WOM that is facilitated through social media and other digital channels.
  • Example: A brand running a social media contest to encourage customers to share their experiences.
• eWOM (electronic word-of-mouth): A specific type of amplified WOM that takes place online.
  • Example: A customer leaving a review on a product's website.
• Influencers: Individuals who have a significant following and can shape consumer opinions and behaviors.
  • Example: A popular beauty blogger reviewing a new skincare product.
• Social proof: The tendency for people to follow the actions of others when making decisions.
  • Example: A customer choosing a product because it is recommended by a friend or family member.
• Reference group: A group of people that an individual looks up to or identifies with.
  • Example: A teenager choosing a fashion brand because their favorite celebrity endorses it.
• Opinion leadership: The ability of an individual to influence the opinions and behaviors of others.
  • Example: A customer recommending a product to their friends and family.
• Word-of-mouth marketing: The use of WOM as a marketing strategy to promote a product or service.
  • Example: A brand running a referral program to encourage customers to share their experiences.
• Netnography: The study of online communities and how they interact with products and services.
  • Example: A researcher studying online forums to understand consumer opinions about a new product.
• Social media metrics: Measures used to track the effectiveness of social media marketing efforts.
  • Example: A brand tracking engagement rates and follower growth on social media.
• Influencer marketing: The use of influencers to promote a product or service.
  • Example: A brand partnering with a popular influencer to promote a new product.
• User-generated content (UGC): Content created by customers about a product or service.
  • Example: A customer sharing a photo of themselves using a product on social media.
• Brand advocacy: The act of a customer promoting a brand or product to others.
  • Example: A customer sharing their positive experience with a brand on social media.
• Customer loyalty: The tendency for customers to continue purchasing from a brand over time.
  • Example: A customer choosing to continue purchasing from a brand because of their positive experiences.

Common Misunderstandings

• Misunderstanding: eWOM is the same as WOM.
• Correction: eWOM is a specific type of amplified WOM that takes place online, while WOM can occur in both online and offline settings.
• Misunderstanding: Influencers are only popular on social media.
• Correction: Influencers can be popular in various fields, such as fashion, beauty, or gaming, and can have a significant following on social media or in other areas.
• Misunderstanding: WOM is only positive.
• Correction: WOM can be both positive and negative, and can have a significant impact on purchase decisions and brand reputation.

Quick Application / Identification

Scenario: A customer shares a positive review of a new restaurant on social media, and several of their friends see the post and decide to try the restaurant. What type of WOM is this an example of?

Answer: Organic WOM. Explanation: This is an example of organic WOM because the customer shared their positive experience without being prompted or influenced by the restaurant.

Scenario: A brand partners with a popular influencer to promote a new product. What type of marketing is this an example of?

Answer: Influencer marketing. Explanation: This is an example of influencer marketing because the brand is using an influencer to promote their product to their followers.

Scenario: A customer shares a photo of themselves using a product on social media, and the brand re-shares the post on their own social media account. What type of content is this an example of?

Answer: User-generated content (UGC). Explanation: This is an example of UGC because the customer created the content about the product, and the brand is re-sharing it on their own social media account.

Last-Minute Revision

• Netnography: The study of online communities and how they interact with products and services.
• Social proof: The tendency for people to follow the actions of others when making decisions.
• Reference group: A group of people that an individual looks up to or identifies with.
• Opinion leadership: The ability of an individual to influence the opinions and behaviors of others.
• Word-of-mouth marketing: The use of WOM as a marketing strategy to promote a product or service.
• Influencer marketing: The use of influencers to promote a product or service.
• User-generated content (UGC): Content created by customers about a product or service.
• Brand advocacy: The act of a customer promoting a brand or product to others.
• Customer loyalty: The tendency for customers to continue purchasing from a brand over time.
• eWOM (electronic word-of-mouth): A specific type of amplified WOM that takes place online.
• Amplified WOM: WOM that is facilitated through social media and other digital channels.
• Organic WOM: WOM that occurs naturally, without external influence.
• Word-of-mouth (WOM): Informal communication between individuals about a product, service, or brand.
• Influencers: Individuals who have a significant following and can shape consumer opinions and behaviors.
• Social media metrics: Measures used to track the effectiveness of social media marketing efforts.
• WOM is only positive: WOM can be both positive and negative.
• Influencers are only popular on social media: Influencers can be popular in various fields and can have a significant following on social media or in other areas.
• eWOM is the same as WOM: eWOM is a specific type of amplified WOM that takes place online.