There are several reasons why word-of-mouth is so effective. We've put together some statistics in this article that proves it.
What is WOM marketing?
While many factors influence a person's purchase decisions, word-of-mouth marketing can be particularly influential. In fact, a recent study found that nearly two-thirds of respondents said they had been influenced by word-of-mouth when making a purchase decision.
The Impact of Word-of-Mouth (WOM) on Consumers' Purchase Decisions Word-of-mouth marketing is a form of marketing that uses personal recommendations from satisfied customers to promote a product or service.
Friends and family are perceived as trustworthy sources of information. Since their feedback and experience are more accurate, it has a significant influence on consumers' purchase decisions.
If you don't have a referral program yet, then you're missing out on a lot. Many customers are willing to refer to your brand if they can get incentives in return. According to an RRD survey of 1,000 consumers, 55% learn about products through word of mouth.
More than 50% of people are willing to get referrals if they receive direct incentives, social recognition, or access to an exclusive loyalty program. (Invespcro)
While referrals can happen organically, businesses can also set up their own referral program and increase brand awareness. When customers talk about your product or service, it helps to increase brand awareness and exposure.
For starters, a referral program incentivizes brand advocates to recommend a brand in order to get rewards, freebies, and exclusive offers. Interestingly, word-of-mouth marketing studies show that referred customers are more likely to be loyal and generate more profits for the business over time.
Word-of-mouth is one of the most effective ways to raise brand awareness. Of course, people are more likely to believe the information provided by their network than other types of paid media. Their experience and point of view are more authentic than a sponsored ad claiming you're the best.
On top of this, referred customers are more likely to stay loyal and make more purchases over time. This shows that customers may continue to patronize a brand if their friends and family do the same.
This is precisely why having a referral marketing program is invaluable to your business. Plenty of customers are already willing to spread the word about your brand, especially if they get rewarded in return. If you're looking for a surefire way to grow your business, you can't go wrong with word-of-mouth marketing.
How to get started with your word-of-mouth marketing strategy? Sign-up for their 30-day trial and launch your own referral program today.