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People listen to their family and friends discuss a product or read about 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 form of ‘social proof‘ that guides you in making significant purchasing decisions.
Word-of-mouth marketing (WOMM) is directly responsible for a product’s successful sales.
Let’s examine word-of-mouth marketing statistics to gain a better understanding of this strategy.
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 a vital component of the marketing world.
It would not be an exaggeration to state that word-of-mouth marketing is as old as trade.
‘Word-of-mouth’ is a term used for the practice of personal recommendations.
In marketing, WOMM occurs when consumers personally endorse a particular brand and directly influence its purchase.
Word-of-mouth marketing is a crucial factor in promoting any product.
Before making any purchase, especially a significant one, people often discuss it with others to gain insight into their experiences and perspectives.
In the digital space, people often look to influencers for product recommendations.
The reactions and reviews people hear about the product influence whether they will make a purchase or not.
Marketers should always pay attention to their word-of-mouth marketing strategy. This strategy can significantly drive sales.
Word of Mouth trust factor
Word-of-mouth referrals have a very high trust factor. They are faithful recommendations based on personal experience.
The ones who engage in WOMM are mainly friends and family.
This already establishes a basis for purchasing the product.
It is common consumer behavior to notice a product used by others and, on hearing positive reviews, make a similar purchase.
In social media word-of-mouth marketing, trust is conveyed through 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 drives sales from customer referrals.
Key Word of mouth marketing statistics
Word of mouth is a key tool in the marketing world.
Some vital 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.
Using reliable review management software helps brands monitor, collect reviews, and respond to them more effectively, thereby building trust and improving their reputation.
Brands that engage with these reviews and respond quickly can retain more customers by increasing affinity.
4. About 50% of marketers believe that personal recommendations directly generate 20% -40 % of the leads.
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 finds word of mouth effective in promoting live events.
The sales impact of Word of Mouth
Word of mouth has a significant impact on a brand’s sales and 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.
Also check: Customer product reviews & UGC app for ecommerce
Traditional advertising, on the other hand, is a paid marketing strategy.
This utilizes various media, including newspapers, television ads, broadcasts, billboards, and other forms of advertising, to promote a product or service.
This involves strategic ad placements and is heavily monitored. Traditional advertising can lead to WOMM.
Some 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 are willing to share a positive 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 plan to increase their budget for influencer marketing in 2025.
19. According to HubSpot, 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 which 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 metric helps businesses understand how much a company can earn from one customer throughout the relationship.
Word-of-mouth is a key influencer in this metric, as brands also try to estimate how many new customers one individual can bring to their brand.
The ripple effect: How WOMM creates brand advocates
21. Brand advocates are 55% more likely to influence purchasing decisions than regular ones.
WOMM is part of brand advocacy. A brand is famous because people identify with it or appreciate its services.
Customer referrals 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 interest rate 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 that requires minimal effort.
Personal contacts, online reviews, and positive online opinions about a great experience can significantly boost 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. Consumers form a positive opinion when they regularly purchase products from a single brand.
Emotionally connected brands that align with consumer interests tend to have a higher retention rate and may attract 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 encountered while using a product is detrimental to any business’s reputation.
One negative experience can cost brands many valuable consumers.
Negative marketing can lead to a loss of brand loyalty and consumer trust.
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 customers’ common values is 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 substantial portion of your customers.
The above statistics help you understand the importance of word-of-mouth marketing and the value of a positive customer experience.
Sources:
Nielsen | Neil Patel | McKinsey & Co | Persuasion Nation | Hubspot Blog | RetailDive | Influencer Marketing Hub
Frequently asked questions
It’s when people recommend a brand or product to others through personal experience or online reviews, influencing their purchase decisions.
Because people trust recommendations from friends, family, and other consumers more than ads. It drives sales and builds brand trust.
WOMM leads to about five times more sales than paid ads and builds stronger customer relationships.
Online reviews act as digital word of mouth. Around 95% of shoppers read them before buying, treating them as personal recommendations.
By offering great experiences, engaging with customers, running referral programs, and working with influencers.
A single bad experience shared publicly can reduce customer trust, harm reputation, and lower sales.
Krunal
