What is Word of Mouth Marketing?
Word of Mouth Marketing (WOMM) is when a product influenced the customers so much that it becomes their routine dialogue. The customer keeps on sharing his experiences with others and advertises the product in the disguise. Companies and businesses encourage word of mouth marketing by organizing events, where customers communicate with other customers and influence their decision.
Who Uses Word of Mouth Marketing
Word of mouth marketing is when customers share their product experience with their friends and relatives. According to an estimate, 92% of the people trust their friends rather than media. That’s why companies and businesses encourage WOM marketing by providing a quality product to the customers.
By encouragement I mean that companies provide new insightful information about the product that customers aren’t aware of. They also teach customers the new techniques and methods of sharing information about the product to influence their decision.
How Effective is Word of Mouth Marketing?
Here are some of the statistics of the word of mouth marketing that will help you to analyze its effectiveness.
- According to a study, 13% of the total annual consumer sale comes from WOM marketing with the worth of 6 trillion US dollars.
- WOM marketing generates 5 times more sales than the paid media campaigns, and people trust and buy recommended products 90%.
- 88% of the people put a high level of trust in the people that they know.
- A company that emotionally connects with customers generates 3 times more sales than the brand that does not.
- 28% of the customers say that WOM marketing is a significant factor influencing their brand affinity.
- 64% of marketers believe that WOM marketing is a very effective marketing tool.
- 70% of the marketers are planning to increase their spending on online WOM marketing, and 29% of the marketers are planning to spend on offline WOM marketing.
- 80% of the advertisers use WOM marketing for brand awareness, and 43% of the marketers use WOM marketing for direct sales.
Word of Mouth Marketing Strategies
Here are some of the following word of mouth marketing strategies that you should use;
Offer Something Unique
You should come up with something unique and different and offer it to the customers, that would amaze people and they would share their experience with others. It doesn’t mean that you have to redo everything again, just work on some old ideas and present it differently. Or you should follow some different marketing strategies.
Rating and Reviews System
Sometimes people like your product, but they won’t recommend it to dozens of their friends and family members. It means that you can use their feedback for your marketing purposes. According to a study conducted by Bright Local’s Customer Review Survey in 2017;
- An average person studies at 7 reviews before trusting any brand.
- 85% of people trust online reviews like real-life recommendations.
- 49% of the people think that a 4-star rating is a minimum requirement for the purchase decision.
Tap into People Emotions
Emotionally connecting with your customers is a very powerful tool that would make customers talk about the company’s product. It could be a common belief that the company’s product and customers have in common.
For instance, e-commerce retailer ‘Ben & Jerry’s’ emotionally connect themselves with customers by showing them that they’re environmentalists.
A referral program is a great idea of convincing people to refer the company’s product with their social circle. But if you attach rewards with more referral and successful conversion, then people would take it seriously to win the rewards because they are a great source of motivation. Rewards could be in the form of bonuses, cash prizes, gifts, or discounts. Referring programs should be simple and done with few clicks.
If you offer incentives to the customers that would do WOM marketing for your brand, then more and more people would be willing to do it. It doesn’t matter that incentives are big or small; customers would do WOM marketing for you if they get something in return.
You should offer discounts to your customers if they do refer.
Connect with Industry Influencers
You should connect with those people that have a great influence over the public and also have a plethora of following. It means that their platform is well established, if they do WOM marketing for your brand, then it would have a major influence.
Mention, tag, and feature those influencers in your content, and provide them free services that they would actively engage.
Focus on User Generated Content
User-generated content means that the content relevant to your product generated by customers. It could be random and poorly worded, but honestly that would attract customers. You can identify customers’ content by using the hashtag, offer rewards to those who would create content like social media post, picture, or gif, and make them feel that you are a part of their community.
Advantages of WOM
Some of the advantages of word-of-mouth marketing are as follows;
People are willing to trust something when they see other people happy using the same product. According to an advertising report prepared by Nielsen Global Trust that 92% of the people follow the recommendation of their friends and family, rather than traditional marketing. Word of marketing takes a turn in the age of science and technology by forcing marketers to rely on the referral of their customers.
The marketing and advertising budget of companies comprise of hundred and thousands of dollars. WOM marketing and referral programs don’t have any cost compare to them. Like email marketing or social media marketing, you just have to create engaging content and send it to the customers.
According to a study on integrated marketing and sales conducted by the University of North Carolina that the people who purchase your brand’s product through referrals are more likely to purchase it again than those who are through media and advertising. It is because referral marketing attaches a memory of a referring person. Therefore, referring memory lasts longer than an ordinary advertisement.
A market comprises a lot of big competitors; it becomes difficult for a small business owner to establish his brand. However, WOM marketing and referral provides a unique touch to your brand. It could be in the form of tips, articles, or other materials that interest people, and they would share it with friends.
Disadvantages of WOM
Some of the disadvantages of word-of-mouth marketing are as follows;
Slow & Limited
WOM marketing is good, you can’t expect it to reach and influence everyone through it. It works slowly and it has a limited reach. The electronic version of the referral program is much faster, and it doesn’t guarantee the conversion. There’s a limit to one’s contact, and it would work in the beginning but not in the long term.
Time is very important for new businesses. If your business doesn’t produce something in the beginning, then it would keep on accumulating expenses. WOM marketing works, but it is slower and you never know whether it works or not.
Difficult to Track
It’s difficult to track the conversion rate from the referrals. Small businesses don’t have the expertise of whether the converts are either from the referral or the new ones. George Silverman said that you would need to know not only what is said but who said it, and the sequence of information should continue. The reason that you require such information is that you would it for planning in the future.
Bad reviews and negative feedback of unsatisfied customers can badly impact the overall performance of your business. It would also discourage and create doubts in the minds of new customers. They would run away before even check it out your product/service, and they would also share the bad experience among their social circle.
Word of Mouth Marketing Examples
ALS Ice Bucket Challenge
ALS launched a challenge of pouring ice bucket over you in 2014, the participant has to make a video and send it to them. The purpose was to raise funding, people across the world participated in the contest. The campaign was a great success over social media and it collected 115 million US dollars in 8 weeks.
Netflix studies the pattern of shows that people watch and then recommend similar shows to them. The regular watchers of Netflix share their experiences over social media, and Netflix targets the social circles of its followers.
Slack is a great tool for small businesses that they can use it for free in the beginning, but it depends on the referrals and WOM marketing. Now, slack has a much wider audience because of its referral programs.
If you are a small business owner, then word of mouth marketing is a great tool for you to reach more people. But you can’t rely on them forever because it has a limited range. Eventually you would need paid media to go beyond. Most importantly, you should be certain about the performance of your product, because negative marketing spread much faster than positive referrals.