92% of Consumers Trust Word of Mouth

Word-of-Mouth Beats Paid Ads: A Case Study

Word of mouth is one of the most powerful tools brands can use to acquire new customers. According to Nielsen, 92% of consumers around the world said they trust word-of-mouth, or recommendations from friends and family, above all other forms of advertising.

Word of mouth marketing has been around since the beginning of time, and long before we knew to call it ‘marketing’, but it’s only in recent years that it’s truly gained the recognition it deserves. A recognition that it drives a huge US$6 trillion of annual consumer spending, and is estimated to account for 13% of all consumer sales. That’s a lot of talking.

So why is it different from other forms of marketing? Well, for a start word of mouth marketing, or referral marketing as we like to call it, leverages trust. You’re receiving a recommendation from someone you know and trust and, in particular, from someone who knows you well, and knows what you like and don’t like. This is why word-of-mouth marketing results in 5x more sales than paid media impressions. And this is all down to the trust and confidence implicit in the recommendation or referral.

The effectiveness of word of mouth can be seen from these statistics:

  1. 64% of marketing executives believe word of mouth is the most effective form of marketing.
  2. McKinsey & Co reported that word of mouth is the primary factor behind 20-50% of all purchasing decisions.
  3. BCG reported that word-of-mouth was 2-10 times more effective than paid ads.
  4. Nielsen found that consumers were 77% more likely to buy a product if their friends recommended it.
  5. 23% of consumers talk about their favorite products with friends and family every day.

And the importance of word of mouth marketing is only likely to grow with McKinsey & Co reporting that 82% of Gen-Z trust their family and friends for advice on products more than any other source.

The question facing marketers now is: what steps have you taken towards connecting with your customers and leveraging word of mouth?

After seeing the power of word of mouth, as illustrated by the statistics above, clearly you should be looking to leverage your happy customers and brand advocates to acquire new clients through trusted recommendations. If you’re not utilizing your consumer advocates, then you’re ignoring an extremely powerful marketing channel, one that can reduce your reliance on ever more expensive performance marketing.

But to get the maximum from positive word of mouth, you actually need to take positive steps to foster and encourage it, this is because, as shown in a study from Texas Tech, while 83% of consumers say that they are willing to refer after a positive experience, only 29% actually do.

So if you’re new to referral marketing, we suggest that the first step you take is to learn more about word-of-mouth and the power of recommendation marketing.

To learn how to monetize word of mouth through refer-a-friend programs and referral marketing, contact us – we’d be happy to answer any questions you may have.

One thought on “92% of Consumers Trust Word of Mouth

  1. Almost all customers seek out recommendations and testimonials before choosing a business, product, and service. They do this because it helps them to establish trust and filter out companies that have a terrible reputation.

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