About the Blog

This is my diary....what I make sense of, around me. You'll find short prose on contemporary topics that interest me. What can you expect - Best adjectives? …. hmm occasionally, tossed around flowery verbs ?…. Nope, haiku-like super-brevity? … I try to. Thanks for dropping by & hope to see you again

June 17, 2009

Voila WoM!

Word of Mouth (WoM) has been a very potent tool in the world of Sales & Marketing. I realized that pretty early in my career when I was with IFB in their Marketing head office at Bangalore. It was the Year1994 & Manmohan Singh’s economic miracle was just unfolding on the market forces.

It was my first job in the Pvt Sector & I was enamored by all the lofty thoughts of Marketing I had learned during my MBA days. However this humble WoM made me realize the terra firma of the real Marketing world soon. This Company (then called IFB-Bosch due its collaboration with the German major) was in uncontested Territory but in a relatively small segment of the then washing machine market. But with relatively little or nil advertising & marketing spends, the Company commanded more than two thirds share of the fully automatic washing machine segment.

Those were the days when Videocon’s jingle had overtaken Nirma’s washing powder jingle on popularity charts. And Videocon made fully automatic washing machines, albeit top loading ones. Yet it among others like Onida, Godrej, TVS-Whirlpool etc stood nowhere near IFB in sales terms.

As an apprentice I was assigned to the Customer contact programme (CCP) in the Company & I used to churn out data based on consumer feedback that sounded almost unbelievable to be true. Day after day and months on end CCP forms used to flow to the Marketing head office from IFB branch offices all over the country and fed in a FoxPro Application. These were forms that service technicians used to fill up from IFB Customers at the time of machine Installation by enticing them with a small Co gift (Cuffs’n Collars). And it had one innocuous question that read something like this

Q:You bought an IFB washing machine because

• Newspaper Advertisements
• Dealer recommended strongly
• Product demonstration/Sales appeal
• Neighbour/Relative/Friend recommended
• Others (pls specify)

In what turned out to be majority of the cases (something like 70-75%) customers overwhelmingly bough IFB because of the positive reinforcement due to word of mouth publicity in their relative/friend/colleague circle.

The Company tried, rather unsuccessfully, to carry forward this concept by getting prospective referrals from these customers through the same CCP programme and marketing them directly. It did not succeed because the customer pull it generated was effectively cannibalized by the dealer through undercutting and realizing better price margins to consumer. That the consumer durable market was highly price sensitive and the dealers ravenously undercut each other on product margins helped.

However the fact that WoM helped the Company sell more than its competitors who were bigger brands and had much higher marketing spends in the market stood out. In the process I learnt a thing or two about database marketing from the Marketing Guru ‘A Ramana Rao or ARR as we fondly called him’ who made this concept the cornerstone of Company’s marketing strategy and took the Company to NumerUno position in the market. That crown went undisputed for many many years .

Cut the chase to today & brands have begun to look at measuring the efficacy of this communication & advertising medium in a serious and structured fashion. Consumer voices are now much more amplified by various communication technologies such as Blogs, discussion forums, social networking sites, RSS among others. You have companies like Toyota Motor Corp, J&J, Kellogs, Nike that have embraced WoM big time and helping them with WoM metrics are specialist Cos like Chatthreads Corp, Cymfony, Umbria, Trnd, Buzzador among others.
Post a Comment

Feedburner Count