If you’ve ever recommended an interior design company after your friend complimented your home, then you already understand how important word-of-mouth marketing is for a brand. This underutilized marketing channel can be effective if your customers have a positive experience.
Word-of-Mouth vs. Referral Marketing
Brands often think word-of-mouth marketing and referral marketing are the same things. At a glance, they do look similar, but there are a few subtle differences that separate both strategies.
Word-of-mouth marketing isn’t forced or unnatural; it’s completely organic. A customer will see something they love and recommend it without any incentive. On the other hand, a referral is a promotion strategy that encourages customers to refer to new ones for a discount or bonus.
Customer video testimonials made with Vocal Video could qualify for word-of-mouth marketing if the customers weren’t asked to give their opinion. However, brands will get more out of their video testimonials if they provide their customers with prompts or prizes (i.e., gift cards).
How Word-of-Mouth Can Benefit Your Brand
Some brands are too nervous to implement word-of-mouth marketing because they can’t control it. But your customers are going to talk about you anyway. Give them something to talk about!
1. Word-of-Mouth Improves Customer Loyalty
Word-of-mouth marketing can create a loyal customer base who continues to shop from you. Customers are more likely to buy your products more than once, but only if they have a positive experience with your brand. This tactic saves you time and money acquiring new customers.
Let’s say you own a gardening company that sells fertilizer. Customers only really change what they use if it isn’t working, so if your fertilizer consistently produces strong, healthy plants, they’ll become loyal to your brand. They’ll also be happy to tell others how they grew their plants.
2. Word-of-Mouth Boosts Brand Affinity and Trust
According to a Nielsen study, 92% of consumers trust earned media, like recommendations or word-of-mouth advertising, from people they know. Consumers are losing trust in legacy brands or becoming numb to their messaging, but we’re always going to believe our friends and family.
If your customers can physically see that your product is high-quality or works as advertised, they’ll be more willing to take a risk on your company instead of one that’s unfamiliar. Reviews are essential to consumers, but word-out-mouth is more believable and holds more weight.
3. Word-of-Mouth Builds Buzz and Social Engagement
User-generated content is a type of word-of-mouth marketing that’s completely sustainable and inexpensive, especially from influencers. If a known e-celebrity is seen using your products, that’s a big deal, but your products will look even better if the average person uses them.
Relatability is essential for any advertising campaign, and no one is more relatable to your audience than their friends and family. While that means word-of-mouth ads and content will start off slow, they’ll quickly build speed as more people start tagging their friends in posts.
4. Word-of-Mouth Reaches the Older Generations
While online shopping is widely utilized by younger generations in the US, the same can’t be said for Gen X, Baby Boomers, and parts of the world that aren’t able to access the internet. For these people, word-of-mouth is one of the only ways your products will be found or seen.
This is especially important for the housing niche, where Americans 55 and older own 54% of US homes, and people aged 35 to 54 own 34.1% of homes. When 88.1% of your customers are less likely to research or purchase online, word-of-mouth becomes a crucial marketing tactic.