People listen to their family and friends talk about a product or read/see it online.
What is said about a product around you or on online forums helps you decide whether to make a purchase.
This is a ‘social proof’ that guides you in making important purchases.
Word-of-mouth marketing (WOMM) is directly responsible for a product’s successful sales.
Let us look at word of mouth marketing statistics to better understand this strategy.
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Top WOMM Statistics
Around 88% of consumers, globally, trust customer recommendations.
Nearly 13% of all consumer sales are driven by word-of-mouth marketing.
32% of consumers come across new products due to customer referrals.
User-generated content made 73% of online shoppers feel more confident in a product.
78% of social media users talk about the brands they follow.
Power of Word-of-Mouth Marketing
Word-of-mouth marketing has been an important part of the marketing world.
It would not be an exaggeration to state that word-of-mouth marketing is as old as trade itself.
‘Word-of-mouth’ is a term used for the practice of personal recommendations.
In the marketing world, WOMM is when consumers personally vouch for a particular brand and directly influence its purchase.
Word-of-mouth marketing is an important factor in marketing any product.
Before making any purchase, more so for a significant one, people talk to others about it to understand their experience.
In the digital space, people often look to influencers for product recommendations.
The reactions and reviews that people hear about the product decide whether they will make the purchase or not.
Marketers should always pay attention to their word-of-mouth marketing strategy. This strategy can help drive sales immensely.
Word of Mouth Trust Factor
Word-of-mouth referrals have a very high trust factor. These are faithful recommendations that come from a place of personal experience.
The ones who engage in WOMM are mainly friends and family.
This already creates a base for the purchase of the product.
It is common consumer behavior to notice a product used by others, and on hearing positive reviews, they tend to make a similar purchase.
In social media word-of-mouth marketing, trust comes in the form of influencers who engage with the public daily and are more accessible than the brands themselves.
Thus, trust is the very basis of word-of-mouth marketing, and it is what drives sales that come from customer referrals.
Key Word of Mouth Marketing Statistics
Word-of-mouth is a key tool in the marketing world.
Some important word-of-mouth statistics are:
1. 91% of B2B buyers trust word-of-mouth recommendations.
2. Only 7% of marketers believe WOMM to be effective.
3. 95% of consumers check online reviews before making purchase decisions.
These reviews are treated as word of mouth on digital platforms as they are personal recommendations from other internet users.
Brands that engage with these reviews and are quick to respond can retain more customers by increasing affinity.
4. About 50% of marketers believe that 20% -40 % of the leads are directly generated by personal recommendations.
5. Word of mouth, according to McKinsey & Co., influences about 20%-50% of all the decisions we make while buying products.
6. One in every twelve B2B marketers find word of mouth effective in promoting live events.
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The Sales Impact of Word of Mouth
Word of mouth heavily impacts a brand, its sales, and its reputation. Currently, it drives almost $6 Trillion in annual global spending.
These numbers indicate the huge part WOMM plays in the global market.
Some other interesting sales statistics are:
7. According to Invespro, nearly 13% of all consumer sales are driven by word-of-mouth marketing.
8. Word of Mouth results in 200% more spending than other forms.
9. 43% of businesses expect word-of-mouth marketing strategies to increase direct sales.
Word of Mouth vs. Traditional Advertising
Word-of-mouth advertising is when a positive review of any product or brand is circulated in society through personal (people-to-people) recommendations.
This is mostly organic and spontaneous and isn’t sponsored by the brand. It spreads through personal experience.
Traditional advertising, on the other hand, is a paid marketing strategy.
This uses newspapers, television ads, broadcasts, billboards, etc. to advertise a product or service.
This involves strategic ad placements and is heavily monitored. Traditional advertising can lead to WOMM.
Some key word-of-mouth marketing statistics in comparison with traditional advertising are:
10. 88% of people around the world trust recommendations from friends and family more than any other form of marketing.
11. Word of mouth leads to almost 5 times more sales than paid advertisements.
12. 28% of consumers prefer to learn about new brands, products, and Services through word of mouth.
13. Word-of-mouth influences millennials 115% more than any other traditional means.
Word of Mouth Advertising Statistics
14. Only 4% of consumers trust brand-sponsored content.
15. 72% of consumers will talk about a good experience.
16. Word-of-mouth recommendations are 37% more useful in retaining consumers.
17. 66% of WOM marketing happens through offline word of mouth.
18. 59.9% of businesses spend on influencer marketing plans to increase their budget in 2024.
19. According to Hub Spot, consumers discuss specific brands 90 times every week.
Diving Deeper into Word of Mouth
Word-of-mouth marketing strategies not only help in driving sales but also have many different benefits some of them are:
Customer Lifetime Value (CLV) and WOMM
20. A study shows that businesses endorsing referral programs see a 19% increase in customer retention rates.
The CLV is a metric that helps businesses understand how much a company can earn from one individual customer throughout the relationship.
Word-of-mouth is a key influencer in this metric as brands also try to estimate how many new customers can one individual bring along.
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The Ripple Effect: How WOMM Creates Brand Advocates
21. Brand advocates are 55% more likely to influence purchasing decisions than regular ones.
WOMM is a part of brand advocacy itself. A brand is famous because people relate to it or like their services.
Customer referral and influencer marketing act as proof that the brand is good.
The ROI of Word-of-Mouth Marketing
22. The ROI on every dollar spent through word-of-mouth marketing is $6.50.
The rate of interest on WOMM is much higher than that of its investment.
A brand can enjoy profits with little to no investment as WOMM is an organic marketing tool.
Personal contacts, online reviews, and online opinions about a positive experience can do wonders for your returns.
Emotional Connection and Brand Affinity
23. 82% of people care about brand loyalty when making purchasing decisions.
Emotions and affinity for a brand are interconnected. When consumers purchase products from one brand regularly, they form a positive opinion about it.
Emotionally connected brands that match consumer interests have a higher retention rate and may get more potential consumers than less emotionally connected brands.
Negative Word of Mouth: The Cost of a Bad Experience
24. Around 21% of customers lose trust in a brand due to negative word of mouth.
A negative story about the difficulties faced while using a product is not good publicity for any business.
One negative experience can cost brands many valuable consumers.
Negative marketing leads to loss of brand loyalty and consumer trust.
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Conclusion
Word-of-mouth marketing is as old as trade itself. It is an effective form of marketing that requires minimal investment but generates great results.
A brand that shares customer’s common values is much more likely to gain popularity through WOMM.
Businesses use word of mouth to organically attract consumers without spending money.
A positive experience can lead to significant profits, and a negative one can cost you a decent chunk of your consumers.
The statistics discussed above help you understand the importance of word-of-mouth marketing and a positive customer experience.
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