January 2006 Lawlor Focus
Look Who's Talking
"Creating buzz" was the buzz phrase a few years ago. Soon after, finding "influencers" was all the rage. While both concepts remain alive and well today, leading marketers are more focused on the convergence of the two: that is, what happens when the influencers talk about the buzz. They create word-of-mouth or viral marketing—a phenomenon marketers say may be more important than ever for reaching today’s savvy consumers.
The recently founded Word of Mouth Marketing Association (WOMMA) offers a two-part definition for this concept: Word of mouth (WOM) is the act of consumers providing information to other consumers; word-of-mouth marketing is giving people a reason to talk about your products and services and making it easier for that conversation to take place.
Most organizations have long understood that word of mouth exists, even if they never gave it a name. After all, anyone can share a story about a time where one person’s opinion—whether a first-year volunteer tour guide or a well-established graduate—has had an impact on others. So, why all the emphasis on word of mouth now?
Research now shows that word of mouth not only can influence others in today's market but that it does—and WOM is significantly more influential than traditional advertising or marketing. A 2005 Harris poll highlighted in a December 6, 2005, Wall Street Journal story sidebar shows that for the American public, word of mouth—defined as comments from friends, family members, co-workers and others—carries much more weight than corporate advertising or public relations. A 2005 similar study by Intelliseek, Inc. confirms that consumer trust toward traditional advertising is being challenged by growing confidence in "consumer-generated-media," such as blogs, Internet message boards and other online forums. These studies and others clearly point to an important shift in consumer behavior: Americans of all ages indicate that word of mouth is one of the best sources of information and an important factor in their decision making.
Why is word of mouth so effective? Because the information comes from a source who is not trying to sell something. Rather, typically the person communicating the information is either a friend, colleague or other trusted source—or that person is simply another customer who seemingly has nothing to gain by sharing an opinion about a product or service. This independent, third-party status gives that individual instant credibility.
By acknowledging that, whether it's planned for or not, word of mouth happens, it becomes imperative to practice organizational intent in everything you do: take the "accidental" out of what people are saying about your institution by managing the experience and the sensory cues. What people see, hear and experience (and what they don’t see, hear or experience) will shape their own impressions—and what they tell others.
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Since by definition genuine viral marketing isn't about creating word of mouth, how can colleges and universities make WOM work for them? Institutions can facilitate and encourage good word of mouth by focusing on the messages and the messengers.
- Good word of mouth begins by looking inward. Internal stakeholders have the greatest potential to directly influence others with their opinions about the institution. After all, they are perceived as being "in the know." If they are pleased with their experience—whether as employees, board members, graduates or current students—they will share positive stories with others.
- Listen to customers, visitors and outsiders to identify key messages. Whether it's a particular program, professor or experience that generates good word of mouth, the institution has a remarkable opportunity to nurture and invest in these assets. Doing so strengthens the brand and naturally amplifies the word of mouth already taking place!
- Ensure that stakeholders have good, current stories to tell. Keep them informed through the alumni magazine, institutional blogs, the web and other campus communications. Doing so reminds them about the college's goals and accomplishments—and gives them something to talk about.
- Focus on resources that can help create WOM. Remember the '80s advertisement about sharing a message with someone "and they’ll tell two friends and they'll tell two friends," and so on? Viral marketing always begins with the very first message—and the messenger. Get your messages out by inviting campus champions to talk about the institution using tools such as blogs, e-mail and instant messaging.
Ultimately, the key to word-of-mouth marketing is harnessing and amplifying a pre-existing phenomenon. After all, whether you plan for it or not, word of mouth will happen. Make sure it's the WOM you want.
In the News: Merit Money in Higher Education
Between 1994 and 2004, the amount of money granted in merit scholarships nationally grew from $1.2 billion to $7.3 billion. Likewise, need-based assistance, including grants from private universities as well as from the state and federal governments, has also grown, but at a slower rate—from $18.6 billion in 1994 to $39.1 billion in 2004, according to the National Association of Student Financial Aid Administrators.
Sandwiched between state universities, where tuition is a tiny fraction of what private colleges charge, and the most elite private institutions like Yale, Princeton or Amherst, which are swamped in applications year after year, less elite private liberal arts colleges often rely on merit-based awards to attract students to their institutions. For some, merit money is used on a limited basis to enhance the institution's class profile and subsequently improve its ranking in the college guides. But, for less elite institutions, merit aid has become a critical tool to thrive—or, in some cases, survive—in an increasingly competitive higher education market.
While awarding merit aid may be an effective recruiting tool for some institutions, college administrators must carefully balance the competitive advantages with the long-term financial risks: Every dollar spent on merit awards today is a dollar not available for investment in physical facilities or the academic program. Somewhere down the road, colleges actually must make up the income they forgo through merit scholarships.
"If you go too far in that direction, you end up without enough resources to have a good faculty and to do all the things you want to do," said Richard J. Cook, president of Allegheny College (Meadville, Pennsylvania). "If you discount too much, you’re on your way toward oblivion."
Read the full January 1, 2006, story in The New York Times: "Aid Lets Smaller Colleges Ask, Why Pay for Ivy League Retail?".
Expert Perspective
A 2005 survey conducted by Hardwick~Day suggests that many students who allegedly decline admission to a school because of its tuition are actually more influenced by other factors.
Non-matriculants from two Midwestern colleges were surveyed by phone. At one college, more than 25 percent of students who turned down admission listed cost as the deciding factor, and for another school, the same figure was more than 40 percent. However, at the first college, more than half of the students who said they were experiencing sticker shock indicated that they would have chosen another institution even if there were no difference in cost. For the second college, more than 40 percent said the same thing.
Students pointed to other factors, such as location, academics, the overall feeling of the schools, as well as the influence of family and friends as reasons for their choice.
Read more about this survey in the Hardwick~Day Advantage e-newsletter.
Did You Know?
The profile of the average Internet user is changing, according to the statistics gathered by the Pew Internet & American Life Project.
Of the 137 million or so adult Internet users, the average user is as likely to be female (67 percent of women over the age of 18 routinely go online) as male (68 percent). And, English-speaking Hispanics are now as likely to use the Internet as Caucasians (70 percent).
More education and income also correlate with increased Internet usage. Some 89 percent of people with at least a college degree surf the Net, and 87 percent of people who earn an annual income between $50,000 and $75,000 say they regularly use the Internet. That number goes up to 93 percent for those who earn more than $75,000 a year.
Still, there are gaps among "Netizen:" Only 57 percent of people who self-identified as black, non-Hispanic regularly use the web; 29 percent of people with less than a high school degree go online with any regularity; and fewer than half of those with earnings of less than $30,000 frequent the Net.
If you would like to learn more about building good word of mouth for your institution, please contact The Lawlor Group by e-mailing tlg@thelawlorgroup.com or calling 800.972.4345.
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