A 2006 study by the Verde Group showed that people who hear about a bad shopping experience are less likely than the people who actually had the bad experience to ever set foot in the store.
Word of Mouth Marketing (WOM) 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.
Brands can’t force people to talk about stuff, of course. But they can provide buzzworthy experiences. That’s why word-of-mouth marketing campaigns often involve brands giving people “an experience you want them to share or talk about”, Giving away free product samples, sending company swag to unexpecting customers and inviting bloggers to brand-sponsored events are common practices for word-of-mouth marketers. Activities like these helps accelerate word of mouth.
Why is Word of Mouth So Effective?
The key to successful word-of-mouth marketing is establishing trust according to an estimate, 92% of the people trust their friends rather than media. The other important feature of WOM is that it can create a viral effect. One person can tell a message to somebody who can, in turn, pass it on to multiple other people.
A 2013 Boston Consulting Group study found that for millennials, brand authenticity is second only to loyalty discounts in importance when choosing companies to support. Shoppers distrust large companies, and just 36 percent of shoppers claim to trust large companies to do what’s right. 84% of consumers value recommendations from friends and family above all forms of advertising.
How Effective is Word of Mouth Marketing?
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.
Importance of Word-of-mouth marketing or WOMM
Word of mouth marketing is one of the most important types of marketing for most brands, products or services. The reason is explained below
Impact: Word of mouth marketing is literally the best form of marketing because 92% of people will buy the product which is referred to them by WOMM.
Huge returns on investment: It is a myth that word of mouth marketing does not cost anything. You need to invest in giving solid service to customers to generate WOMM. However, once u give that service, you will get a huge return on investment.
Using Brand advocates: Sometimes, some customers become so happy with your brand that they become brand advocates. These customers are the ones who generate maximum business for you via word-of-mouth marketing – without any cost to you!
Power to small businessmen: Word of mouth marketing is becoming very important especially for small stores and local brands who do not have a huge marketing budget. They can give good service and get the returns because of the personal relations that they built.
Negative WOMM means huge losses: Negative word of mouth can cause huge losses to a fresh launched product or brand. When Tata Nano was launched, it suffered a huge hit to its brand image because people called it the “poor man’s car”. That is why companies need to focus on positive word of mouth at all times.
Word of Mouth Marketing Strategies
Here are some of the following word of mouth marketing strategies that you should use:
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.
Give them something to talk about
Give these people a reason to talk about you. Give them a special offer, send them a new product, let them test out a yet-to-be-released feature. Anything to get a conversation going.
Locate the talkers
Find people — such as customers, fans, bloggers and influencers — who will talk about you.
Create Content People Want to Share
For successful word of mouth marketing, you either need some form of buzz, or you need content that is of sufficient quality that people will want to share it.
Referral Program
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. Rewards could be in the form of bonuses, cash prizes, gifts, or discounts.
Tap into People Emotions
Emotionally connecting with your customers is a very powerful tool that would make customers talk about the company’s product
For instance, e-commerce retailer ‘Ben & Jerry’s’ emotionally connect themselves with customers by showing them that they’re environmentalists
Ask for Reviews
Many people don't even think about doing a review, or they get distracted and forget to do it. You could perhaps send a follow-up email to your customers asking for a review.
If you have an online store, make it easy for people to place reviews on your pages, so that potential customers can see them.
Once you have sufficient positive reviews, make them even more visible on your website, and also use them in your social media posts.
ADVANTAGES & DISADVANTAGES OF WOMM
Word of Mouth Marketing Examples
McDonalds
McDonalds made use of word-of-mouth marketing very convincingly in China. For instance, in 2010, it offered customers to purchase McSpicy Wings at a discount rate with discount coupons from any restaurant in the country. It promised to give out free chicken wings at seven of its restaurants if one million customers shared the storey of McSpicy Wings online. Interestingly, within four weeks, McDonald’s achieved the target with pledges from over two million people (Magni and Atsmon, 2010).
Netflix
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.
JEEP
Several times a year, Jeep invites Jeep owners to participate in off-roading expeditions called Jeep Jamborees. These events are part of a tradition that dates back to 1953, in which participants gather in their decked-out SUVs and voyage across rugged terrain for a few days.
Coca-Cola
Its “Share a Coke” campaign was launched in 2014 to get consumers to view Coke in a way that boosts its consumption i.e. by getting people to share it with their friends and family. Its social media campaign asked customers to find bottles with common names (and uncommon spellings of common names!) on them and share it online using the hashtag #ShareaCoke.
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.
Slack
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.
POTBELLY
Potbelly Sandwich Shop, a restaurant chain founded in Chicago, has a strong presence in the Midwest. When Potbelly opened its first stores in Austin, Texas, the company got hold of a mailing list of people who had moved to Austin from Chicago. Potbelly sent each of them a hand-signed letter in the mail, inviting them to introduce their friends to a “taste of home.” Each letter included tickets for ten free sandwiches.
Dropbox
Dropbox is an online storage company that has successfully used word of mouth to attract a lot of new customers. It offered free storage space in the early days with bonus free space for referrals that drew a lot of attention.It offered 500 MB extra storage space to new users and the people referred by them. This campaign led to rapid growth in Dropbox’s revenue.
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