Twitter & Facebook Make Word-Of-Mouth the Most Powerful Marketing Model Vijay Sundaram - SocialTwist
go to original May 5, 2012

Dominant logic is being challenged in consumer marketing today. Marketing science, with its roots in behavioral psychology, has worked under the premise of a “purchase funnel” model for consumer decisions: the consumer first recognizes a need, seeks awareness of suitable products that could fulfill it, evaluates alternatives, and finally makes a purchase decision.  

Decision-making is thus assumed to follow an ordered sequence, with purchase possibilities narrowing along the way. This model has shaped marketing and consumer engagement for decades, as marketers spray their investments across the top of the funnel in the hope that some of it will result in actual purchasers at the bottom. Countless billions have been reverently spent this way.

But the picture changes dramatically in a socially connected world. It’s now possible to mimic and amplify everyday life online. Word-of-mouth – the oldest, and most effective referral method – is now possible on a mass scale. So consumers increasingly bypass the decision sequence above. For example, I bought a digital camera last month.

I don't know anything about cameras and have little time for research. I just asked my friend Ben, who knows more, and bought the kind of camera he has and really likes. He put me directly at the ‘purchase intent’ end of the funnel. More significantly, Nikon would have been better off cultivating my friend (a customer they know), rather than trying to find and engage me (a prospect they don’t). Millions of similar decisions are made over social networks everyday.

Social networks have made advice easier than ever to get. Every survey suggests these opinions are trusted far more than brand messages. All this is dramatically altering consumer behavior. More than 75% of consumers now say they ask their friends before making purchase decisions. Market power continues to inexorably transfer to consumers, just as they are irrevocably changing the way they make decisions.

Businesses can pluck opportunity out of this disruption. Every consumer is now a powerful influencer of dozens or even hundred or thousands of others.

That changes everything. For a business, a sale now marks the beginning of a customer acquisition journey, rather than its inevitable end.

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