The Power of Word of Mouth Marketing - Smart Communities

CampaignThe Power of Word of Mouth Marketing

The Power of Word of Mouth Marketing

By: / Campaign / Comments Off on The Power of Word of Mouth Marketing

We can all agree that a large amount of our buying decisions is influenced by our circle of friends and family and their opinions on a product or service. From seeking a reputable plumber to sourcing the perfect caterer for an upcoming event – we are most likely to tap into our own network to get their recommendations first, before, we extend our search online.

The following stats from Entrepreneur on Referral or Word of Mouth Marketing indicates that:

  • According to 78% of marketers, referral marketing produces “good” or “excellent” leads.
  • Referral programs in ecommerce can increase your revenue by 10%-20% for traditional products and up to 100% for emerging ones.
  • Referred customers are five times more likely to take advantage of your referral program than non-referred customers.
  • According to referral marketing stats, 86% of B2B companies with a referral program experience growth.

Fundamentally there are four compelling reasons why word of mouth advertising is so powerful:

1. You can Trust it!

Trust is the essential pillar of every business, however research from Nielsen and Edelman shows that barely half of all consumers trust businesses globally. What we do trust are the opinions of friends or our close networks.

Our friend’s opinion generally matters more as opposed to ads because we inherently trust them. Our friends and family will tell us like it is, the good the bad and the ugly; because they have no inherent financial interest in the product or service that they are recommending so we can truly believe them.

Think about needing a major piece of work done at your home and the contractor requires a deposit – you are placing a great amount of trust on a complete stranger, however, if you are using a contractor that has been referred to you by a close friend or comes with great recommendations chances are that you would be more inclined to trusting this individual.

2. It is Personal

Through word of mouth advertising your customers become your best sellers – they know what their family and friends’ needs are, and they can translate your services or product to them in a way that you cannot. Social media only accounts for 50% of all word of mouth advertising – so while companies are boosting social ad spend if you really want to capitalise on word of mouth referrals – you need to think about how you can provide your customers with something to talk about!

3. It is a Time Saver!

It’s an early Sunday morning and you are on your way out only to discover that your garage door isn’t working – you never had this problem before and don’t know who to call, however you don’t have the time to scroll through the yellow pages or google searches. What do you do? You reach out to your Neighborhood WhatsApp group or ask a friend for their recommendations – once everyone gets the message they start responding to you and within minutes you have found a service provider that is reputable and gets the job done!

4. It hits the Target

According to McKinsey “word of mouth generates more than twice the sales of paid advertising in categories as diverse as skincare and mobile phones.”

Word of mouth is more targeted. If you sell wedding cakes and advertise in a local newspaper or on social media – some might be interested but others won’t be – which has a financial implication for you and the money that you have spent in the hope of getting a customer.Word of mouth, however, is extremely focused on the needs of that individual – people will only speak about a brand or service if its relevant to the needs of the person that they are engaging with. I certainly will not be recommending a wedding cake to a person that was not looking for one.

Reviews and referrals are a perfect foundation to help build your reputation and you brand to help your business grow – your customers spread the word about your brand and create a web of potential clients.

 

It is time to join the revolution! Get konektd.

 

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