Consumer ‘Word-of-Mouth’ Study Cited for Long-Run Impact in Marketing Field
Research into managing consumer word-of-mouth communication by David Godes, professor and chair of the Marketing Department at the University of Maryland’s Robert H. School of Business, has garnered an INFORMS Society for Marketing Science “Long Term Impact Award” for 2017.
“Firm-Created Word-of-Mouth Communication: Evidence from a Field Test,” was published in 2009 by Marketing Science, And, INFORMS has recognized the work for having made “a significant long run impact on the field of marketing.”
Godes and coauthor Dina Mayzlin, then at Yale, now with USC Marshall, showed that word-of-mouth created by less loyal customers maximizes incremental sales. The key implication of the study is that engaging the most highly loyal customers to spread word-of-mouth about a firm may not have the same impact as engaging newer clients. The authors show that this is due to the fact that the less-loyal customers are more likely to have friends and acquaintances that are less aware about the firm to begin with. Put differently, communication by loyal customers is essentially “preaching to the choir” and playing out in networks already in the know about the product from pre-existing conversations. Thus, according to Godes and Mayzlin, spending money on creating a campaign to reach these consumers is ineffective because the social communication has already taken place.
Ultimately, Godes and Mayzlin say marketers looking to utilize word-of-mouth communication that drive sales want these conversations happening “where none would have naturally occurred otherwise.”
This is the second paper for which Godes and Mayzlin received this prestigious award. In 2011, their paper, "Using Online Conversations to Study Word-of-Mouth Communication" also won the award for Long-Term Impact.