All You Need To Know About Word of Mouth Advertising
Introduction
Many businesses try to perfect their marketing strategy. They also create and implement good social media strategies. However, they fail to leverage the use of word of mouth advertising strategy.
This article considers what word of mouth advertising entails, its benefits, limitations and how to measure it.
Table of Contents
- Introduction
- Meaning of word of mouth advertising
- What is positive word of mouth?
- Impact of word of mouth on a business
- Why word of mouth advertising is effective
- Limitations of word of mouth advertising
- What is negative word of mouth?
- How to Build a Word of mouth advertising Strategy
- Measuring the Success of Word-of-Mouth Advertising
- The Bottom Line
Meaning of word of mouth advertising
Word-of-mouth advertising (WOM advertising) is free advertising that is usually triggered by a customer’s experiences and thus reflected in their daily conversation. When a product or service fulfils their needs beyond their expectations, they express it. They tell other people they come in contact with and recommend the brand.
What is positive word of mouth?
This then constitutes a Positive WOM. What they communicate to people they know buttresses the strengths of the product or service. Furthermore, it encourages them to patronize the brand.
Impact of word of mouth on a business
One satisfied customer can get you as many as 20 referrals. Conversely, one unsatisfied customer can do a lot to mar your reputation and hamper new customer acquisition. Read on for more specifics on what impact word of mouth can have on your business.
Word-of-mouth influences purchasing decisions up to 50% of the time.
Think about it. Many of your purchasing decisions and the reasons for purchase are influenced by opinions and referrals from others. In other words, it contributes to a large percentage of purchase decisions.
Word-of-mouth is a most effective source for new customer acquisition
How many times have you patronized a brand because a friend referred you? People trust word-of-mouth advertising from those they know than from any other source.
Word-of-mouth advertising brings in twice as much sale as paid advertising.
Generally, WOM advertising performs doubly better than paid advertising in terms of sales. Additionally, this trend cuts across diverse industries.
Word-of-mouth has the most impact on customer buying decisions
Consider it. How many times were you about to make a purchase but a friend’s tale of a bad experience swayed your mind? And regardless of how much research you might have done prior to that point.
Word-of-mouth impacts on every stage of the buyer’s journey
Furthermore, not just at the decision stage but every stage. WOM advertising changes customer behavior right from the awareness, consideration, and other stages of the buyer’s journey.
Word-of-mouth advertising can foster competitor edge
Aside from the benefit of increased sales, word of mouth advertising can differentiate you from your competitors. What business would you patronize? The one with a sterling online reputation or the one that few people talk about?
How effective is word of mouth advertising?
Whether it is positive WOM or negative WOM, how reliable is WOM for advertising as compared to paid advertising? In the same vein, is positive word-of-mouth advertising better than paid advertising?
Why word of mouth advertising is effective
Statistics indicate that word of mouth advertising from your customers can be more effective than other types of advertising. This is not surprising considering the following reasons.
Trust
First, people trust their friends (who they know) more than they trust ads. Ads and other paid advertising methods can be impersonal. A first-hand experience will always trump over such ads as a source of referral.
Better Targeting
Second, you can reach your niche better with word of mouth advertising than with paid advertising. Word of mouth has the ability to get directly to the customers, address their needs and pain points and encourage them to buy. However, paid advertising is less focused and may reach a more generic audience.
Improved brand loyalty
Third, there is a domino effect when your customers refer others to your business. These customers are in effect your brand ambassadors. They have a belief in the brand and encourage friends, family and the community to patronize the brand. It is a powerful advertising effect.
Better Key Performance Indices at less cost
Moreover, whether your business goal is increased brand awareness, new customer acquisition or customer retention, word of mouth advertising can help you achieve this. More so, you do not have to spend much on such advertising.
Improved Brand’s Social Proof
In addition, these “brand ambassadors” who use WOM advertising can give your brand a proof of authenticity. In addition, they help you increase reliability, trustworthiness and brand credibility. Thus, a solid social proof is built to help you grow your brand and reputation.
Limitations of word of mouth advertising
That is not to say that word of mouth advertising is “always better” than other methods.
Slower results
First, for example, paid advertising is generally preferred for quick results. The information is “broadcasted” simultaneously whereas; word of mouth advertising needs time for the word to spread. For instance, if you want quick results on increased brand awareness, paid advertising would be preferable.
You need people to refer your brand
Second, you may have fantastic products or services but for WOM to work, you need people to actually spread the word. Consequently, you need to work on being relevant and getting yourself into daily conversation. You need to get them to discuss your brand and products.
Control – word of mouth advertising is difficult to control
Finally, you do not have much control over how your business is referred. Furthermore, you do not determine when it occurs. In addition, it is not always positive.
What is negative word of mouth?
Negative word-of-mouth (NWOM) is a communication between a consumer and others concerning a brand or product which downplays the brand as a response to a poor experience or dissatisfaction.
Advisably, you can make positive WOM advertising and paid advertising complement each other. One can boost the other in the minds of prospective buyers.
Tips on creating a word of mouth advertising strategy
Some tips on building a positive WOM advertising strategy are highlighted below.
1. Differentiate your brand with your USP
Does your product have that fantastic new feature? Can it be relevant to a trending topic? You can highlight and promote the differentiating features of your brand and get your customer community talking about it.
2. Use varied forms of content marketing
You can get your customers talking about your brand if you practice good content marketing. Remember, videos are the current and future most interesting form of content marketing. Integrate videos, pictures, infographics and other forms in your posts. Consequently, you attract a huge audience and have interested engagements.
3. Make use of Influencers
4. Use Offers
5. Implement Loyalty/referral programs
Your customers can more easily encourage people to patronize you if there are advantages for them. Furthermore, you can measure the success of this strategy.
Measuring the Success of Word-of-Mouth Advertising
Typically, word of mouth is hard to measure. However, measuring the success of your WOM advertising is the first step to influencing it. The following steps suggest how to go about measuring it.
Use your channels
First, of course you have online channels right? You can make use online channels such as your website and your blog. Do not forget your social media channels either (Facebook business page, Twitter account and so on). Use these channels to promote positive word-of-mouth advertising. Thereafter, use their analytic tools and insights to measure its success.
Incorporate word of mouth advertising strategy into customer service
Second, ask for reviews and testimonials from customers. Ask them to follow, engage, comment and like posts on your online channels. Add your online addresses and handles in your email marketing and offline marketing tools such as brochures and complementary cards.
Set and monitor new likes and follows on social media
Furthermore, ensure you set goals for brand visibility. Thereafter, upon implementing your WOM advertising strategy, you have to track the numbers. How many new friends and followers your business achieves in a month? Granted, not all of them arise from word of mouth referrals but a good number should be. If the increase is substantial then you are on the right track.
Use feedback from customers
Finally, it can be as simple as including source of awareness of your brand in a customer data form. You could also have your sales people ask them directly. Furthermore, you can make use of online forms. Direct feedback from new customers can give you an indication of how successful your word of mouth advertising campaign is.
Interestingly, you can use Email marketing to reach all existing customers. Perhaps a questionnaire can be included in an email communicating your referral program.
The Bottom Line
There are many advantages to using word of mouth advertising. First, it is a highly effective way to promote your brand to a targeted audience. Second, it is a cost-effective strategy. However, you have to get the basics right. Create and maintain a USP, use your online and offline channels to build awareness and trust and continue ensuring highest quality for your brand and products. Ultimately, the result is a WOM advertising that drives your business towards achieving those business goals.
