FMCG: Low cost product = high impact WOM

By Molly Flatt

When talking with FMCG brands, I hear the same sentiment over and over.

Word of mouth is all very well for sexy or luxury brands – but why would anyone bother talking about products that are so everyday?

supermarket

Our instinct is to assume that word of mouth has the biggest influence over the biggest purchases in our lives. We love to talk about our new car, because it defines us in such a visible way. We ask loads of opinions before splashing out on that expensive new tablet, because the stakes are so high. But do we really bother seeking out loo cleaner recommendations? Do we really evangelise about the awesomeness of our orange juice? Aren’t those transactions more private, daily, habitual – and rarely aired in public?

As is often the case with word of mouth, our instincts underestimate how inherently social a species we are.

Take beverages. The juice you swill in the morning, the soft drink you reach for with lunch, the tipple you sip after work – we are rarely aware of talking about our choices in these instances, let alone asking for advice. But research has shown that these low cost products fuel huge amounts of conversation on and offline. For example:

  • Consumers, on average, mention 7.2 beverage (alcoholic and non-alcoholic) brands to friends per week. These are two of the most common consumption categories to be recommended and to have recommendations requested
  • 80% of consumers read other consumers’ reviews and feedback about food and beverage brands online

Beyond volume, another interesting discovery is that advertising triggers less word of mouth for beverages than other categories, making peer opinion more powerful:

  • Traditional advertising triggers 47% of general brand WOM – this falls to 38% for beverage brands

And most impactful of all, it seems that beverages drive the sort of WOM that results in recommendation and purchase more than any category:

  • 40% of brand recommendations contains appeal to buy or try product – this rises to 53% for beverages
  • 49% of consumers say a brand recommendation drives them to buy – this rises to 62% for beverages

(Sources: StarCom MediaVest Group/CNET Networks and Keller Fay Group)

In the words of  Brad Fay, co-founder of WOM research group Keller Fay:

“Word of mouth, in beverages, sees a very strong linkage to purchase, even more so than we see in other categories. That’s why we think it would be worth the industry thinking about how word of mouth can stimulate the brand. These are people in effect saying they’re going to run out and buy the product.”

Beverages are just one example, but it’s evident that word of mouth can be more, not less, influential for fast-moving, low-cost goods – and there are some great case studies of how FMCG companies are harnessing its potential.

Some of my favourites include Heineken, P&G, Coca-Cola and Starbucks. What are yours?

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Brought into the world on Friday, March 18th, 2011 and filed under Case Studies, FMCG, Stats & Research.

  • http://twitter.com/joachimschulz Joachim Schulz

    “80% of consumers read other consumers’ reviews and feedback about food and beverage brands online” => i'm curious (and being in the 20%)…where?

    i can't imagine 80% checking reviews and feedbacks for beverages compare for a hotel booking and or a car purchase. or does the 80% include any mentions of beverage brand that someone might mention like in a tweet?

  • http://www.mollyflatt.com Molly Flatt

    Hi Joachim, you'd have to check with the researchers themselves but I'd certainly assume it includes general WOM/mentions rather than 'reviews' in the TripAdvisor sense. Our listening reveals huge volumes of conversation about food and drink that spools *interminably* through Twitter, Facebook, blogs and the like – I certainly think this is the powerful and ubiquitous sort of influence we're talking about here.

  • http://www.headshift.com/our-blog/2011/03/18/links-for-2011-03-18/ links for 2011-03-18 :: Blog :: Headshift

    [...] 1000heads :: The Word of Mouth People (tags: wordofmouth fmcg socialmedia recommendation) [...]

  • http://twitter.com/strets123 Andrew Stretton

    Interesting Molly, WOM certainly works for FMCG, I would actually argue that the place I couldn't see a WOM campaign working is for medium value, low frequency low emotion purchases such as car windscreen repairs. Here in the UK, the second biggest provider of these (Auto Windscreens) has been driven to the wall by the biggest provider (Autoglass) and their everlasting radio advertising campaign.

    Although arguably the adverts are designed to promote in-car WOM.

  • http://www.hometruthsblog.blogspot.com Carrie Grafham

    I'm sure it's the latter – and also probably applies to other 'socially consumed' categories like snacks/biscuits & cakes/lunchbox food.