Word of Mouth has become Word of Data

In a previous post about overcoming information asymmetry, I discussed one of the ways that customers are changing the balance of power in the retail industry.  During last week’s Mid-Market Smarter Commerce Tweet Chat, the first question was:

Why does measuring social media matter for the retail industry today?

My response was: Word of Mouth has become Word of Data.  In this blog post, I want to explain what I meant by that.

Historically, information reached customers in one of two ways, either through advertising or word of mouth.  The latter was usually words coming from the influential mouths of family and friends, but sometimes from strangers with relevant experience or expertise.  Either way, those words were considered more credible than advertising based on the assumption that the mouths saying them didn’t stand to gain anything personally from sharing their opinions about a company, product, or service.

The biggest challenge facing word of mouth was that you either had to be there to hear the words when they were spoken, or you needed to have a large enough network of people you knew that would be able to pass along those words.  The latter was like we were all playing the children’s game broken telephone since relying upon only verbally transmitted information about any subject, and perhaps especially about a purchasing decision, was dubious when receiving the information via one or more intermediaries.

But the rise of social networking services, like Twitter, Facebook, and Google Plus, has changed the game, especially now that our broken telephones have been replaced with smartphones.  Not only is our social network larger (albeit still mostly comprised of intermediate connections), but, more important, our conversations are essentially being transcribed — our words no longer just leave our mouths, but are also exchanged in short bursts of social data via tweets, status updates, online reviews, and blog posts.

And it could be argued that our social data has a more active social life than we do, since all of our data interacts with the data from other users within and across our social networks, participating in conversations that keep on going long after we have logged out.  Influential tweets get re-tweeted.  Meaningful status updates and blog posts receive comments.  Votes determine which online reviews are most helpful.  This ongoing conversation enriches the information customers have available to them.

Although listening to customers has always been important, gathering customer feedback used to be a challenge.  But nowadays, customers provide their feedback to retailers, and share their experiences with other customers, via social media.  Word of mouth has become word of data.  The digital mouths of customers speak volumes.  The voice of the customer has become empowered by social media, changing the balance of power in the retail industry, and putting customers in control of the conversation.


This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.