Why is Word-of-Mouth Marketing Still a Game Changer in 2024?
Author
Khushal Fadiya
Published on:
Jul 16, 2024
8 min
16 Jul, 24
Table of Content
- Getting Familiar with Word-of-Mouth Marketing?
- The Digital Evolution of Word-of-Mouth MarketingÂ
- Power of Trust in Word-of-Mouth Marketing
- Adapting to Current Trends and Consumer Behaviors
- The Data Behind Word-of-Mouth Marketing
- Leveraging Word-of-Mouth Marketing for Business Growth
- Exploring Types of Word- of- Mouth Marketing
- Crafting an Effective Word-of-Mouth Marketing Strategy
- How Loyalty Programs Enhance Word-of-Mouth Marketing
- Final Thoughts
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Do you know that 64% of marketing experts believe that word-of-mouth is the most effective type of marketing?
Do you remember the last time you couldn’t stop telling your friends and family about a new restaurant you discovered? Or about the new pair of shoes you just bought from a small online store?
Telling your friends, family, or even your social media followers about your good experience with a product or service, is referred to as word-of-mouth marketing. Word-of-mouth marketing (WOMM) is one of the most powerful forms of marketing that involves the user sharing a positive experience with friends or family.
- To Note: Word-of-mouth marketing can lead to 5x more sales than paid advertising.
Getting Familiar with Word-of-Mouth Marketing?
Word-of-mouth marketing refers to the organic spread of information from one person to another. This information is typically about a product or service, which is driven by genuine enthusiasm and satisfaction. The power of word-of-mouth dates back to the times when it was confined to face-to-face interactions and small social circles. Over time, it has evolved to leveraging online platforms. Online reviews, recommendations, and influence endorsements have helped businesses reach global audiences instantly. It even influences Gen Z, the most tech-advanced generation. According to a report by Roundel, 40% of Gen Z consumers trust the recommendations of their friends and inner circles.Key Characteristics of Word-of-mouth marketing:
- Personal Recommendations
- Trust
- Authenticity
- Power of Peer Influence
The Digital Evolution of Word-of-Mouth Marketing
The rise of social media platforms, online reviews, and influencer marketing have transformed the meaning of word-of-mouth marketing in this digital-age. All these elements play a crucial role in digital word-of-mouth marketing.- A report by Gartner shows that 53% of the customers in the US look for online reviews on the product or service they want to purchase.
- Viral Social Media Campaigns: Brands like Wendy’s have successfully utilized viral tweets to engage millions of users.
- Positive Online Reviews: Companies like Amazon rely heavily on user reviews to drive purchases.
- Influencer Collaborations: Influencer Kylie Jenner, promoted SugarBearHair vitamins on Instagram. The post generated massive sales and brand awareness and led to a significant boost in the brand's visibility and credibility. This demonstrates the power of influencer marketing.
Power of Trust in Word-of-Mouth Marketing
Trust and credibility are at the core of word-of-mouth marketing. As per the report by Nielson, 88% of people inherently trust recommendations from their friends and family. They also tend to trust the influencers they follow. This trust is built on perceived authenticity and personal experience making WOMM a reliable strategy for businesses. Psychological research shows that people are more likely to act on recommendations from their peers, making them highly influential. In addition, trusted influencers lend their credibility to the brands they endorse. This makes them a crucial part of modern marketing.Adapting to Current Trends and Consumer Behaviors
Consumer behavior and technological advancements continue to underscore the importance of WOMM. In 2024, consumers are more informed, connected, and discerning than ever. Social media and online communities play significant roles in their purchasing decisions.- To Note: According to a report by Ogilvy, 74% of consumers identify word-of-mouth as a key influencer in their purchasing decisions.
- Yelp
- Google Reviews
- Social media networks
The Data Behind Word-of-Mouth Marketing
Recent statistics emphasize the effectiveness of WOMM. Here are a few statistics that give insight into why WOMM is important for businesses:- About 72% of people receive news from friends and family, emphasizing the popularity of word-of-mouth.
- According to research by BridgtLocal, around 88% put the same amount of trust in online customer reviews as they put in the recommendations given by their personal contacts.
- According to Esteban Kolsky, 72% of customers like talking about their good experience.
- Word-of-mouth campaigns can be one of the top sources of traffic for small businesses doing affiliate marketing.
- Research shows that an increase of 10% in word-of-mouth (both online and offline) can result in a 0.2 - 1.5% increase in sales.
Leveraging Word-of-Mouth Marketing for Business Growth
Here are the key benefits of word-of-mouth marketing:- Cost-Effectiveness
- Brand Awareness
- Customer Loyalty
- Long-Term Impact on Sales
Exploring Types of Word- of- Mouth Marketing
Organic Word-of-Mouth
- Natural sharing of information by satisfied customers.
- Example: A customer sharing their positive experience with friends.
Amplified Word-of-Mouth
- Encouraged by the brand through campaigns or incentives.
- Example: Referral programs, like an influencer loyalty program and customer loyalty program, for new customer sign-ups.
Electronic Word-of-Mouth
- Online reviews, social media interactions, and influencer posts.
- Example: Product reviews on e-commerce sites or social media mentions.
Traditional Word-of-Mouth
- Face-to-face recommendations and conversations.
- Example: Discussing a favorite restaurant at social gatherings or workplace.
Crafting an Effective Word-of-Mouth Marketing Strategy
Here are a few strategies that you can use to implement WOMM:- Develop a WOMM Strategy
- Encourage Customer Reviews and Referrals
- Leverage Social Media and Influencer Partnerships
- Integrate with Other Marketing Channels
How Loyalty Programs Enhance Word-of-Mouth Marketing
Loyalty programs can enhance the overall efforts put into word-of-mouth marketing. They incentivize customers for their loyalty and encourage referrals. This allows businesses to amplify their WOMM strategies. For instance, Starbucks’ loyalty program rewards customers for referring friends. This leads to increased customer engagement and retention for Starbucks. Here are a few tips for integrating loyalty programs with WOMM strategies:- Offer exclusive rewards for referrals
- Create engaging and shareable content
- Encourage user-generated content through social media challenges
Final Thoughts
Word-of-mouth marketing remains a powerful tool in 2024. It is driven by trust, credibility, and peer influence to enhance business success. It’s impossible to deny the relevance of WOMM in the modern marketing landscape, as digital platforms only amplify its reach. If you want to enhance your marketing efforts, LoyaltyXpert offers a comprehensive B2B reward platform that integrates seamlessly with your WOMM strategies. To learn more about the platform, book a demo today.FAQs
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Khushal Fadiya
The driving force behind LoyaltyXpert, has poured his heart and soul into nurturing and growing the company, which he proudly considers his "baby." With an unwavering passion for technology, Khushal has seamlessly integrated his love for tech into his role as Associate Director, where he continues to play a pivotal role in the company’s ongoing success and innovation.