5 minute read
What is word of mouth marketing?
Updated on May 12, 2020 by Shivani Goyal
Word of mouth marketing has become such a normal part of our lives, we are doing it every day without even realizing it. If you've ever updated a status recommending your Facebook friends watch a certain movie, or recommending your friend try out a new product, you’ve done word of mouth marketing.
Word of mouth marketing, as its name suggests, is a type of marketing in which people give recommendations to their friends and family. In this article, we will look at what precisely word of mouth marketing is and how it works in the digital age.
Image Source: InviteReferrals
What is word of mouth marketing?
Word of mouth marketing happens when you purchase a product and then recommend it to your friends and family because of its quality, benefits, and any other positive impact it has made on your life.
Now, businesses are using word of mouth marketing to promote their products by giving lucrative offers to their customers, such as discounts, freebies, or exclusive shopping opportunities. In other words, it's the company’s way to motivate customers to spread the right words about their product. It’s also a way for companies to get valuable feedback that is used to improve services and solve customers' queries.
But people will only spread good words about a product if it’s worth talking about - so in order for word of mouth marketing to work, you must already have an outstanding product, excellent customer service, and a positive online reputation.
Word of mouth marketing is a powerful marketing tool that offers a free form of promotion as it is based on customer experiences.
Now, you might be wondering how a recommendation helps to build and promote your brand.
Here are some astounding facts about word of mouth marketing:
- 92% of customers trust recommendations from their friends and family over a sales representative or advertisement.
- Word of mouth marketing promotes positive brand promotion. According to statistics, 66% of brand promotions are positive.
- 81% of people are likely to be influenced by social media posts from their friends and family.
- Word of mouth marketing leads to 50% of purchase-related decisions.
Word of mouth marketing is continuing to drive sales. After reading these statistics, there is no doubt that it is one of the most popular ways to boost sales.
What is referral marketing?
Word of mouth marketing is also known as referral marketing. Let's learn why we call it referral marketing.
Referral marketing happens when a person refers a product or a service to his friends, usually through word of mouth. Referral marketing can happen organically, or companies can influence referrals through a number of methods, including providing rewards or incentives.
It's a formal way of recommendation as it involves the proper use of referral links and messages. Businesses know how effective recommendations are, so they are using those recommendations to increase sales.
Why is word of mouth marketing important?
- Trust factor: This is the main idea behind word of mouth marketing. People trust their family and friends, and therefore, they tend to purchase brands that are suggested by their friends. For example, if your friend likes a certain product and recommends it to you, you will likely try it out. If multiple friends have recommended you try that product, you’ll be even more likely to do so. Out of trust, you make the initial purchase. If you like the product too, then you will also begin to refer the product to your friends and family.
- Long-term benefits: Word of mouth is not a one time process, but it continues for a long time. It connects new people to your brand every time someone talks about it. If your customers are satisfied with your product, then they will promote your products whenever they get a chance.
How does word of mouth work in the digital age?
We are living in the 21st century, where people are effectively digitized. Modes of communication have been revolutionized, and now we can communicate while sitting at home (especially during a pandemic), and can even browse and purchase thousands of products from our phones.
So you may be wondering how word of mouth marketing is still relevant? Well, people are still communicating with each other and sharing their opinions. Arguably more so than ever before. Digital tools even help to extend your reach. Here’s how.
Reviews on social media platforms
Ratings and reviews are a common way to share information as well as experiences with people. People read reviews before making any purchase-related decisions. Therefore, it's a meaningful way to make your customers aware of your products. The most crucial part is that these reviews are based on real experiences and help people through relevant information.
Recommendations and sharing on social media
People love sharing their opinions on social media like Facebook, Instagram, and Twitter. People recommend movies, restaurants, and a lot more. When a customer suggests something on social media, that recommendation is visible to a wide range of people. Sharing and recommending helps businesses to improve their visibility as well as build their brand.
How does referral marketing work as a digital version of word of mouth marketing?
Referral marketing is the same as word of mouth, but this marketing is done intentionally. Businesses knowingly invite customers to participate in their referral program. People also refer their friends and family because they get rewards or discounts. It is a digitized way of using existing customers to get new customers. Below is an example of how the process often works.
The referral campaign also allows running referral contests that can boost conversions exponentially.
Referral contests mean that there would be a competition among the referrers, and the one who has brought the maximum number of referrals will become the winner and get a prize.
In this article, we have seen that word of mouth marketing is a unique way of promoting business. There are different ways to improve it, and all these sources are affordable and accessible. Word of mouth marketing is a great channel to use make any service or product number one, so it is crucial to involve it in your marketing strategy.
Digitization of marketing has come a long way, so it is essential to adapt your methods of marketing as well. This article gives you a brief overview of how you can leverage word of mouth marketing in the digital space to encourage existing customers to leave an impression in the market.