E-Mail Plus Word-of-Mouth: A Marketing Revolution

The possibilities are enough to make a marketer‘s mouth water.
The ubiquity of e-mail, among marketers and Internet users, has created a take-it-for-granted attitude that detracts from its actual power. But with 90% of Internet users — and over 55% of all Americans — e-mail unquestionably has access to an audience with critical mass, and it is increasingly becoming a primary delivery vehicle for word-of-mouth marketing.

The combination of e-mail and word-of-mouth affords marketers a potentially vast, and very powerful, new marketing tool.
"The fundamental purpose of e-mail marketing is to enhance a company‘s relationship with its customers and to draw in new prospects. That might mean direct response sales messages, CPG coupons, building brand awareness, weekly or monthly e-newsletters, service messages about packages shipped or funds available in bank accounts, driving traffic to a company or brand Web site and, increasingly, word-of-mouth communications," says David Hallerman, eMarketer Senior Analyst and author of the new report,E-Mail & Word-of-Mouth: Connect with Your Best Customers. "More and more marketers today are joining the conversation among consumers — another way to say word-of-mouth — through e-mail to blend in with marketing today‘s trend of consumer-generated content, such as blogs, social networks, video and related media."
Just as e-mail is central for most interactive marketing, it is also intrinsic to online word-of-mouth, also called — in its variations — viral marketing, buzz marketing or word-of-mouse. Some distinguish viral marketing from traditional word-of-mouth by citing viral‘s digital augmentation, as typified by the pass-along or forwarded e-mail.
"As e-mail marketers look increasingly to make the most of their lists, segmentation techniques can help them identify customers who might be willing, or even eager, to forward e-mail messages to friends and family," says Mr. Hallerman. "That might mean offering discounts or samples to customers who‘ve bought over a certain amount within a recent period, and then inviting them to pass-along that offer to others."
Internet word-of-mouth depends on Metcalfe‘s Law — from Robert M. Metcalfe, inventor of Ethernet networking technology — which says that the value of a network increases with the square of the number of people using it. In this case the value in each network constitutes the number of people passing along any particular marketer‘s message. If the offer is enticing enough, e-mail becomes the viral carrier, where a large share of recipients forward something to a large number of friends, and the whole process escalates quickly with exponential growth.
"Many doubt that marketers can create true viral marketing using incentives targeted at people on their e-mail lists. Just as with other consumer-generated media (CGM), such as blogs, giving up control is essential to the word-of-mouth e-mail process," says Mr. Hallerman.
Marketers surveyed byOsterman Research forBoldMouth, a word-of-mouth marketing company, indicate that satisfied customers, along with great products or services, are the most important things needed to generate word-of-mouth.

However, like any powerful force, e-mail can also be dangerous.
"Marketers need to tread gently when using their opt-in e-mail lists to create buzz about products or services," says Mr. Hallerman. "Messages that were once welcomed can be seen as spam if marketers press too hard, are too obvious or imagine that word-of-mouth can be direct-marketed in today‘s increasingly consumer-controlled marketplace."