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Benefits of Word of Mouth Marketing

January 28, 2020

Word of mouth marketing is a leading tactic used by advertisers today. Read on to learn about the benefits of word of mouth marketing for your business.

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When you hear the term “marketing,” you might think of catchy slogans, social media posts, television commercials, and bright ads. Yet, one form of marketing that often gets overlooked is what we call “word of mouth” marketing. Despite it falling by the wayside, it’s a type of marketing that you’re all too familiar with, as it’s scant more than a conversation.

Say, for instance, that you happen to buy a product you adore. In fact, you’re so enamored that you reach out to a few friends to talk about it. Your friends trust you, right? Thus, they’re compelled to make a purchase. Right there, in that very instance, you’ve just marketed for that company. At its foundation, that’s all that WOM advertising (word of mouth) isan organic conversation that orbits a brand, product, or event between existing, loyal customers and future, potential customers. 

If word of mouth advertising flourishes, it has the power to be the most effective marketing strategy deployed. Why?

Because of One Word: Trust 

According to the Nielsen Global Survey, 83% of 30,000 survey respondents claimed they trust the recommendations of friends and family. The survey results show that the most credible source of advertising comes from people consumers know and count on. Additionally, 66% of respondents said they trust online reviews, whether they be from happy customers or dissatisfied ones.

If you’re curious about the benefits of word of mouth marketing and how to get people talking’ we’ll discuss further below.

Word of Mouth Marketing Creates Trust

People face an overwhelming amount of ads every day. It seems that everywhere we turn, there’s a marketing campaign or ad waiting to sneak attack us. We’re bombarded with advertisements about a company’s products from:

  • Browsers
  • Applications
  • TV shows
  • Social Media Platforms
  • Billboards
  • Digital Media Platforms
  • Storefronts 

People want products from trusted companies, but they may be skeptical of professional ads (because they just don’t stop). Instead, they prefer to consider recommendations and reviews from other existing customers or even brand ambassadors. When a product has a track record of being reliable, consumers feel comfortable purchasing it.

This comfort is mutually exclusive to trust. And trust sells. 

Trust Drives Consumers’ Decisions

Since consumers trust people’s recommendations and judgments, they are more likely to buy a product after hearing someone else’s experiences. According to Radius Global, word of mouth marketing is the biggest influencer driving millennial’s purchases. This is where viral marketing comes into play.

Here’s how the buying process might play out for someone who can’t decide between options:

  • The consumer is inundated with different ads.
  • Faced with information overload, the consumer stalls in making a decision.
  • A friend shares a positive experience with a product.
  • The consumer trusts their friend.
  • They make a faster, more confident choice after hearing a positive review from someone they trust.

When shoppers hear about a product through word of mouth, it slices through the information overload. WOM marketing shines a spotlight on a certain product or service, casting the rest of the “noise” in shadow.

The potential customers are then able to make a quick decision instead of suffering from choice paralysis—ultimately driving a conversion. 

Brand Awareness Spreads Through Word of Mouth

Word of mouth marketing doesn’t stop after a single interaction between friends. Once someone spreads information to a new person, then that individual will spread it in turn—and on and on. Even if these conversations don’t lead to purchases, they bring brands into awareness. When a company or product is widely discussed, then their reputation builds as they are exposed to more channels where referral marketing is present.

To that end, consumers recognize and trust brands when they have a loyal following. Brand awareness can also help:

  • Associate positive emotions with companies or products
  • Differentiate against competing organizations
  • Create a sense of connection or empowerment in shoppers

Low-Cost Method for Increasing Sales

While costs for print or online marketing campaigns may run-up to the thousands or millions, word of mouth marketing is a comparatively inexpensive strategy. It costs absolutely nothing for a customer to share a positive experience with a product.

This is why word of mouth marketing is every marketer’s holy grail. It’s a gift that keeps on givingwith little to no cost to the company. One widely adopted conversation can skyrocket a company’s popularity, reinforce their trustworthiness, and spread like wildfire throughout their target audience and demographic. 

Word of Mouth Marketing Builds a Community

Word of mouth marketing creates a loyal fanbase. With this form of marketing, shoppers won’t just purchase a product and then forget about it. Instead, they will engage with your brand and share their experiences with others. By having customers who can vouch for your products, you’ll have a community of fans that stay loyal to you. 

Loyalty begets conversions. 

When customers are devoted to you, they’re more likely to make repeat purchases instead of heading to your competitor. They’ll also spread the word about your brand, influencing the decisions and choices of other buyers. With the retention of loyal purchasers, you’ll get more returns from your marketing endeavors.

But What Exactly Drives Word of Mouth Marketing?

According to Jonah Berger, a professor of marketing at the University of Pennsylvania, word of mouth marketing is driven by two things:

  1. Social currency
  2. Triggers

Social Currency

Let’s say you find out about a secret presale for a well-known and popular clothing company. You’ll likely feel privileged being part of a small group and having the opportunity to shop for products before they become available to the public. 

The idea of exclusivity is enticing, and that’s what social currency is all about.

Social currency makes you feel special. It makes you feel as if you’re part of a limited group. People want to feel like they have insider information. Word of mouth marketing strategies can use social currency to encourage consumers to share exclusive information about a product. Secret events or private launches can get the public talking. 

Because, at the end of the day, people don’t only want to be part of something exclusivethey want others to know they’re the “chosen ones.”  

Triggers

Triggers prompt you to think of a company or brand even when there’s no advertising in sight. For example, imagine your friend mentions a cafe near your home that offers a weekend special for brunch. When Sunday rolls around, your other friend suggests eating brunch together. Even though there’s no advertising in front of you, you’ll remember the weekend special that your previous colleague informed you about.

Triggers remind people of promotions, sales, products, or services that their peers mentioned. Triggers support word of mouth marketing by heightening its effect and promoting awareness of a brand when it’s most useful or convenient to buyers.

How to Use Digital Strategies to Encourage Word of Mouth Marketing

As we’ve discussed, word of mouth marketing is an effective and cost-efficient way to increase sales. If you want to use word of mouth marketing to build your brand and drive sales, there are a few strategies you can employ:

  • Create something worth talking about – For a successful word of mouth marketing strategy, it’s essential to identify something about your company or product that is shareable and exciting. Does your brand have any buzzworthy characteristics that will help it go viral? Make sure your buyers are getting a quality experience when they choose to use your services.
  • Encourage reviews and ratings – Customer reviews assure buyers that a company or service is reliable. Don’t wait until it’s too late—remind your shoppers to leave reviews after they purchase something. Many buyers trust online reviews. Reviews and customer insights in marketing offer concrete proof of a company’s accuracy and trustworthiness.
  • Reach out to influencers – Influencers and thought leaders have thousands of followers online. People rely on them for providing quality content and recommendations. With their wide reach across audiences, they’re a useful way to get people excited about something.
  • Implement referral programs – Give people an incentive to share information about your products by creating a referral program. With a referral program, users can easily encourage their friends and family to try out your services. This method also allows you to measure the results of your campaign. It’s an incredibly valuable metric.
  • Boost user-generated content – Since buyers are more likely to listen to the experiences of other customers, user-generated content is a great way to spread the message about your company. Encourage customers to create their own content by coming up with hashtags that the public can use. Give incentives such as discounts or free gifts, and share community-generated content on your page. The act of creating contentfor youis a conversation in itself. 
  • Highlight exclusivity – Consumers are more likely to talk about something if it’s exclusive or unique. If you give customers something that they won’t find elsewhere, they will share their experiences with others. This generates more buzz around your brand and cultivates interest in what you’re offering.

Companies That Use These Strategies

Many companies use word of mouth marketing strategies to generate attention and drive sales.  A few “big name” examples include:

  • Toms Shoes – By highlighting their commitment to charity, Toms created a buzz around their goods. What sets them apart from other businesses is that they donate shoes from each purchase they receive. With a shareworthy message, Toms generated a ton of coverage for their cause and became a trending product.
  • Dropbox – Dropbox, upon its launch, spurred attention around their services by using a referral program that encouraged people to spread their message. They offered 500 MB of free storage for referred customers. This incentive motivated people to choose Dropbox over competitors. As a result, they drew an enormous amount of referral trafficultimately propelling them towards market dominance
  • Coca Cola – Coca Cola’s “Share a Coke” campaign produced a buzz by printing popular and common names on their bottles. This campaign offered a unique customer experience and got people engaging with the brand outside of their typical norm. There was even a hashtag for customers to share their photos online. 

The Bottom Line

Word of mouth marketing is one of the most effective ways to spread your message across audiences. It’s a cost-effective strategy for building a community among your buyers. By using a few simple tactics, you can create a stir around your brand and establish your company as trustworthy and reliable. 

But ultimately, if what you’re offering or selling isn’t worth talking about, no amount of marketing tactics or shenanigans are going to spark conversation. That’s why, when it comes to WOM advertising, it’s wise to pay special attention to your narrative. By fine-tuning or highlighting a facet of your message, you might just create a buzz that chatters across multiple channels. 

That chatter will drive awareness and foster trust. That trust, ultimately, is why people are going to buy into your product. 

That trust, at the end of the day, is a metric for the quality of your brand. 

 

Sources: 

Nielsen. Digital Formats are Among The Most Trusted Advertising Sources Despite Slow Growth. https://www.nielsen.com/us/en/insights/article/2015/digital-formats-are-among-the-most-trusted-advertising-sources-despite-slow-growth/

Marketing Charts. Word-of-Mouth A Bigger Purchase Influencer for Millennials Than Boomers, Who Rely More on Ads. https://www.marketingcharts.com/industries/retail-and-e-commerce-39207

Yotpo. Word-of-Mouth Marketing: Building a Strategy That Really Works. https://www.yotpo.com/blog/word-of-mouth-marketing/

Impact. 7 Must-Have Word-of-Mouth Marketing Strategies. https://www.impactbnd.com/blog/word-of-mouth-marketing-strategies-infographic

Free Logo Services. 5 Brilliant Examples of Word-of-Mouth Marketing. https://www.freelogoservices.com/blog/2018/04/05/5-brilliant-examples-of-word-of-mouth-marketing/

Chron. The Advantages of Word-of-Mouth Marketing. https://work.chron.com/advantages-wordofmouth-marketing-3567.html

Referral Rock. Why is Word of Mouth Marketing so Incredibly Important?. https://referralrock.com/blog/word-of-mouth-marketing/

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