Word of mouth, also known as viva voce, has technically existed since the beginning of spoken language and is how information, history and thoughts have been shared as long as people have communicated with one another. As a marketing technique, Word-of-mouth (WOM) marketing predates other forms of marketing like advertising, but is still arguably the most effective marketing tool that brands can use to spread awareness of themselves and their campaigns.
With 74% of consumers identifying word-of-mouth as a key influencer in their purchasing decision, word-of-mouth tactics can be considered one of the most influential aspects in your consumer’s decision-making process. If you think that the days of modern technology have pushed WOM to the background, your brand may be suffering because of it. From building credibility to those who your brand hasn’t touched yet, to creating lifelong, loyal customers, it all starts and ends with word-of-mouth.
WOM Builds Social Validity
If you think about, isn’t word-of-mouth the original social media? At its core, it is a way for people to share their thoughts and opinions about whatever they wish to discuss. Social media simply brought offline word-of-mouth online and made it much easier for people to view and share large quantities of information. In fact, 77% of brand conversations on social media are people looking for advice, information, or help.
In recent years, many marketers have been mistakenly focused more on the quantity of awareness rather than the quality of awareness. Some of this is due to the ease of displaying those more superficial quantitative numbers (i.e. reach, impressions, etc.), and how difficult it is to often show qualitative numbers (i.e. share-of-voice, sentiment, etc.). Thus, many brands are restlessly trying to gain as many social media followers as possible, when they should be more focused on creating connections with consumers through memorable experiences.
After all, having 100 passionate fans who genuinely love your brand is much more powerful than 1,000 Facebook followers who barely know the first thing about your brand. New technology, smartphones, the internet, social media, all allow for WOM to spread immensely quicker than when humans did not have these technological capabilities at their fingertips.
PR Daily recognized Zeno Group with an Engagement Award for their Seattle’s Best “Black Friday Coffee Break” campaign, which focused on a segment of the target—retail workers—by offering free coffee to those working on Black Friday. Consumers leveraged the program through an interactive Facebook application, and new fans were encouraged to “like” the page and choose from the following options: have a free sample of Seattle’s Best Coffee sent straight to your mailbox, stop by a participating retail location for a free cup of brewed coffee on Black Friday, or print a $2 off coupon. The brand received 125 million total impressions in two weeks and 6 million YouTube impressions, solely due to word of mouth with the help of social media.
Through WOM marketing, consumers are able to build trust and emotional connections with brands, which leads to conversions and lifelong customers.
WOM Builds Trust Through an Emotional Connection
Building trust with customers provides the opportunity to turn them into representatives of your brand, as they will express their pleasure of using the brand’s product or service within their social sphere. This, in turn, creates an emotional driver for new customers to begin shopping or using your brand. In fact, 84% of consumers say they either completely or somewhat trust recommendations from family, colleagues, and friends about products and services, making these recommendations the highest ranked source for trustworthiness.
For example, Zappos has become one of the largest e-commerce websites in the world as a result of their dedication to customer service, the understanding the brand has of WOM marketing, and the effect it has had on their brand image. Zappos CEO Tony Hsieh wrote that “Our philosophy has been to take most of the money we would have spent on paid advertising and invest it into customer service and the customer experience instead, letting our customers do the marketing for us through word-of-mouth.”
WOM Converts the Most Customers
Consumers are not the only people who place a strong emphasis on recommendations or referrals, consumers and businesses alike use recommendations and referrals to drive their decisions, with 91% of B2B buyers influenced by word-of-mouth when making their buying decision. B2B companies are often searching for and taking into account the word-of-mouth opinions, whether online or offline, that are circulating about other businesses with which they could potentially do work. In fact, 83% of B2B buyers are researching online before making a purchase.
According to B to B Magazine, 61% of IT buyers report that colleague recommendations are the most important factor when making a purchase decision. Word-of-mouth has also been shown to improve marketing effectiveness by up to 54% indicating that WOM marketing can be a major driver in the decision making and purchasing process, and can lead to direct value for your company.
Additionally, 84% of consumers reported always or sometimes taking action based on personal recommendations. 70% said they did the same of online consumer opinions. Millennials, a coveted target audience by many marketers, ranked word-of-mouth as the #1 influencer in their purchasing decisions about clothes, packaged goods, big-ticket items (like travel and electronics), and financial products. Baby Boomers also ranked word-of-mouth as being most influential in their purchasing decisions about big-ticket items and financial products.
WOM Creates Lifelong and Loyal Customers
Customer loyalty is essential for long-term validity of a brand name, as loyal and happy customers can do a lot of positive (and negative) WOM marketing for your brand. The social analytics platform known as SumAll completed research showing that “25% to 40% of the total revenues of the most stable businesses in the SumAll network come from returning customers. Even better, steady customers help businesses weather lean economic times; businesses with 40% repeat customers generated nearly 50% more revenue than similar businesses with only a 10% repeat customers.”
These numbers show the clear advantage of returning customers compared to new customers. Creating loyal and returning customers relies heavily on referrals and positive WOM from existing customers as customers referred by other customers have a 37% higher retention rate.
Word-of-mouth is an essential aspect in the process of converting potential customers into loyal, lifelong customers. It begins with consumers briefly hearing positive WOM circulating about your brand, which builds social validity. Once your brand has established this social validity, WOM can help to develop emotional connections between customers and the brands, which builds trust.
Finally, when consumers trust your brand, conversions start to flow and your brand can build a strong base of loyal and returning customers. While word-of-mouth is not the only component of a successful marketing strategy, it is vital to build it as a key part of your efforts.