Substantial Effects of Word of Mouth Marketing in Telecommunications Industry

Abstract: One of the biggest responsibilities of today’s marketing managers is to use their financial and labour resources in the most efficient way. However, any kind of traditional marketing method which is designed and spread by the seller is both costly and less influential on customer’s buying behaviour. Word of Mouth, which can simply be explained as any marketing action that leads to earn customer recommendation, (Word of Mouth Marketing Association) helps organizations to burst their sales revenues while decreasing their marketing budgets. WOM is considered as more transparent, more credible and more relevant by customers. Besides, it is a cheaper way of advertisement for organizations due to its organic spread characteristic. Therefore, marketers should focus on creating strategic marketing actions that will keep WOM effect at the peak level. This research attempts to disprove the common belief that, WOM cannot be controlled by the seller itself. Especially, the effort will be put on Business to Business relationships, which are usually considered more unreactive to WOM communication. In order to achieve that, author will provide a four-step WOM analysis framework to its readers. First, transactions mapping will be utilised to see possible areas of WOM development. Afterwards, WOM actors of the market will be identified and customer decision cycle elements will be disclosed in order to understand the WOM potential of a particular market. Final step of the framework will be the calculation of Customer’s Total Value which is composed of their Lifetime and Referral Values. Research also includes an online survey, whose results are converted to numerical data in order to determine Customers´ Referral Value. In the final part, Telefónica Data/Capacity Services´ customers will be ranked according to their total values and a Customer Value Matrix will be created. Customers will be segmented into four main groups named as Champions, Affluents, Advocates and Misers; all of which have different buying and WOM characteristics. Ultimately, tailored WOM strategies will be advised in order to maximize each group’s total value.