• by Tanya Gazdik , May 11, 2011

Consumers who previously freely shared their opinions about companies are turning into shrinking violets, according to a new study from Colloquy.

Research shows a severe decline in word-of-mouth opinion sharing about companies and products since 2008.

Of 3,295 U.S. consumers surveyed by Colloquy in December, 58% said they often have conversations with family, friends and coworkers about products and services they have used. That's down from 73%, when Colloquy posed the same question in a 2008 study.

In addition, 57% of respondents in the latest study said they often recommend products and services to others, compared to 75% in 2008 -- a 24% decline.

While the study doesn't reveal a magic bullet to help companies engage with consumers, it does suggest tactics that loyalty marketers can execute within their social media and word-of-mouth strategies, says Colloquy managing partner Kelly Hlavinka.

"The most underleveraged way to encourage positive word-of-mouth with your best customers is to borrow what works best in your rewards program," Hlavinka tells Marketing Daily. "Many companies seem to think that is off-limits. Yet in reality, rewarding and recognizing the behavior of advocacy drives great results."

Some marketers are already on the right track, she adds.

"IHG and United Airlines are just two examples of this put into practice," Hlavinka says. "IHG has done a series of Triple Point promotions to encourage their Priority Club members to pass along that offer to three friends or family members. They report tens of thousands of incremental room nights from the word-of-mouth generated by that program."

United Airlines is another example. "Their 'give Associate Premier status to a friend' campaign allows their Mileage Plus members to be the hero by bestowing complimentary Premier status, such as upgrades and early boarding, to a colleague," she says.

The reduction in WOM activity can't be attributed to a shortage of ways for views to spread. There are face-to-face conversations, landlines, cell phones, email, instant messaging, texting, blogs, micro-blogs like Twitter, review sites like Trip Advisor and social media sites such as Facebook. Instead it seems the tough economy over the last two years may be the culprit responsible for the dampened willingness to engage in brand WOM.

For example, of respondents who reported their households are doing better economically this year than last, 71% said they often have conversations with others about the products and services they use. That's very similar to what Colloquy found two years ago, before the recession became "the meltdown."

Yet among those who now see themselves as worse off, just 56% reported having brand conversations and 55% said they make product recommendations.

Looking to the future, 74% of respondents who see their own financial outlook brightening said they have conversations about products and services, versus 55% for those who see their financial outlook worsening. And 67% of those who see a brighter future said they make recommendations, compared to 55% for those who see their finances tightening.