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Strategy

The Hidden Importance Of Word Of Mouth Marketing

Tesla uses it, Blendtec scored +700% sales increase with it, Harley Davidson wouldn't have survived without it. Rediscover marketing's secret sauce

Adebisi Adewusi
April 17 2018

Remember when a television commercial run at the right time hit 80% of the population? Sigh. Marketing was much easier then. These days, consumers are harder to reach. With ad blocking up by 30%, consumers skipping mobile ads and ignoring ads on social media, it’s less obvious which marketing methods work in the age of the customer, but we do know that consumers still respond to marketing, especially word of mouth marketing. Word of mouth marketing refers to consumers to consumer brand conversation or mention, online or offline. Often referred to as the oldest form of marketing communication technique, word of mouth marketing is highly valuable. Offline word of mouth impression drives at least 5x more sales than a paid advertising impression.

Whether traditional or digital, organic or amplified, word of mouth marketing is a YES if you’re looking to boost consumer engagement, get consumers excited about your brand and increase revenue. I’ll show you why word of mouth marketing is one tool you should have in your arsenal.

Consumers Don’t Trust Ads

More and more consumers are skeptical of the fictional stories advertisers and marketing departments come up with to give their products an edge. Remember McDonald’s Dead Dad advert?  Some brands even drop misleading facts in ads just to push sales. In 2016, food giant Kellogg’s was banned from telling consumers that its Special K cereal is “nutritious” and “full of goodness” in UK advert campaigns. According to the Advertising Standards Authority, Kellogg’s failed to backup the “nutritious” claim on the website with a specific benefit from eating the cereal. Wrigley’s Gum-Eclipse was touted as a product that “kills the germs that cause bad breath.” It even had a name for the ingredient — MBE. But the National Advertising Division tested this magic ingredient, and could not replicate this germ-killing behavior. Wrigley’s had to take the claims off the packaging and paid up to $6 million in the settlement.

These flops provide a glimpse as to why consumers seek recommendations from friends, family members, or online reviews and ignore ads. More than 83% of global respondents say they completely or somewhat trust the recommendations of friends and family. Also, 66% say they trust consumer opinions posted online—the third-most-trusted format. Based on the above, some brands are spending less money on ads and investing in word of mouth marketing. According to The Financial Times, Unilever, WPP’s biggest client, has turned to YouTube stars and beauty bloggers to push its products, diverting some money from traditional advertising channels. Earlier this year, Unilever said it planned to cut the number of ads it created by 30% and reduce the number of creative agencies it works with by half.

For consumers, ads can’t be trusted, but family and friends are reliable sources.

Reach Your Target Audience

While sophisticated digital targeting can, when applied creatively, drive sales, precise targeting can be difficult to achieve. In 2017, the world’s biggest advertiser, Procter & Gamble Co, cut digital advertising spend by $200 million. They based their cuts on viewership data that showed its ads were not reaching its target audience effectively. Global measurement and data analytics company Nielsen reported that almost half of online campaigns don’t reach their target audience. Conversely, word of mouth marketing reaches people who want to hear about your products and are ready to buy from you.

Consumers share information with people they think will find it useful, and customers referred by their friends spend more; 20% to 50% of purchases are the result of a word of mouth recommendation. Similarly, a study by WOMMA measured the impact of consumer word of mouth in six different categories, and found that online and offline consumer conversations and recommendations accounted for an average of 13% of consumer sales (or $6 trillion in annual consumer spending). With no advertising, ad agency, CMO, or a dealer network, Tesla Motors has managed to book over half a million reservations for Tesla Model 3. Tesla thrives on customers and car enthusiasts talking about Tesla products, ensuring the brand is never far from  the minds of consumers or headlines. Done correctly, that’s what word of mouth marketing can achieve.

Get Free Publicity

The smartest brands are the ones that know how to get potential buyers talking. It’s why companies shell out about $5 million for a 30-second commercial during the Super Bowl. With word of mouth marketing, you can get people talking for free and you don’t have to spend $5 million. To create a buzz around your brand with word of mouth marketing, however, you have to create buzz worthy content. Ever heard of the video series “Will It Blend”? To promote professional and home blenders, Blendtec decided to create a video series where the Blendtec Blender was put to test by blending non-food items. Among other items, presenters blended an iPhone 6 plus, iPad and golf balls. And these experiments got consumers talking. Within five days of posting “Will It Blend” videos on YouTube, 6 million people have watched them. In a space of two years the videos increased retail blender sales by over 700 percent.

That’s how powerful word of marketing is.

If a regular blender can get people talking, you can too. Here are a few tips from Andy Sernovitz, author of Word of Mouth Marketing: How Smart Companies Get People Talking:

  • Create great products and services: If what you’re offering isn’t wowing, there is nothing to talk about. On the other hand, provide a great product or service and consumers will raise a storm for you. #ShareaCoke became the topic of many conversations when Coca-Cola swapped its regular label for popular names and generic terms. According to the WSJ, Coke reversed 11 straight years of US soft drink volume declines with increases of volume of .4% for the summer of sharing and sale increases of 2.5%.
  • Make consumers feel connected: Consumers talk passionately about brands they feel connected to. Take Harley Davidson. The 100+-year-old brand has used word of mouth marketing to ride to iconic status and has successfully built a cult following and a strong community of riders. CMO Mark-Hans Richer explained, “[Harley Davidson] isn’t a form of transportation; it’s a lifestyle.” Thanks to their passionate customers, potential buyers realize that owning and riding a Harley is a something to be proud of, and even non-riders know the words Harley Davidson.

Before we wrap things up, check out Sernovitz’s four rules for acing word of mouth marketing:

  • Nobody likes boring. So, find a way to make yourself interesting.
  • Make people happy with amazing products, excellent service and going the extra mile. When people are excited about you, they’ll be eager to tell a friend about you.
  • Earn the trust of your customers. If customers don’t trust or like you, they won’t talk about you.
  • Make it easy for customers to tell their friends about you. What can people tell a friend about you in one sentence?

Word of mouth marketing is not about discounts,  it’s about letting your customers share your brand with their friends and family.

Get Smart

From old school chatter to Yelp reviews, word of mouth marketing can get you more customers, reach your target audience and get you free publicity. There is no better time to  activate word of mouth than in the age of the customer. Don’t sleep on it.

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