Word-of-Mouth Marketing is a term that gets thrown around, a lot, in advertising jargon. So what is it? And what makes it unique and effective?
Word-of-Mouth Marketing, is a free form of advertising and comprises the opinion of customers – it is the action taken by the Company to give impetus to people to buy products and services. It is also the act of an individual to recommend or not recommend a product and therefore, put his or her credibility online, or offline, at a plausible risk. Word-of-Mouth Marketing can be given impetus, too, by the publicity tactics and engagements, that maybe planned by a brand or a Company. These can also be planned through interactive consumer-to-consumer and consumer-to-brand activities. Activities that encourage Word-of-Mouth Marketing, are social-media buzz, blogging, engagements that have the scope to attain virality or activities that pique the emotionality of the target-audience. Activities pertaining to Word-of-Mouth Marketing, do not usually end with the first attempt, they usually have to be consistent and spread over a considerable period of time.
Generation Z, the age group of 13-22 year old is especially perceptive to word-of-mouth marketing, given that they have a strong peer circle, who hold a place of dominance in their lives and decision-making process. This is furthered by constant connectivity to friends, through diverse platforms, giving impetus to continuous information sharing, regarding various aspects of life. The importance of word-of-mouth is highlighted by the fact that almost 50% of people in America, according to research, say that they would choose word-of-mouth, overall sources of information, if they had to make a choice. What’s also pertinent to note, is that generation Z, also likes making recommendations, far more than its predecessors. It has been found out that 48% members of generation Z, have made recommendations, compared to 41% of millennials and 38% of Gen X. Yet another form of word-of-mouth marketing is overheard word-of-mouth marketing, when a certain individual makes a recommendation not because of personal experience, but because they were listening when someone they did not know, praised a product, brand or company. Research predicts that 48% of generation z individuals, have made such overheard word-of-mouth recommendations against 41% millennials and 38% Gen X and baby boomers.
Yet another crucial source of information for Generation Z, are online reviews. It has been found out that 68% of Generation Z, reads at least three or more online reviews before making a first-time purchase. Moreover 21% of women in this group read at least nine or more reviews before making a first-time buy. Millennials and this generation, are likely to rely 99% more on reviews, while choosing a restaurant. Other social media sites that have emerged important for Gen Z to garner an understanding of brands, are Instagram, YouTube, Facebook, among others. It has been found out that 46% of members of Gen Z, follow more than ten social-media influencers. They also tend to trust YouTube ads, more than traditional forms of advertising, including print, television, newspapers and more. These YouTube ads often comprise, influencers, and therefore gain popularity many times over.
YouTube ads more popular among Gen Z
Yet other factors that determine the effectiveness of word-of-mouth marketing, are characteristics of demographics. It has been found out that approx. 22% women rely more on word-of-mouth recommendations than do men. Also, the younger sub-group, are likely to make more recommendations as well as believe more in the same, compared to an older sub-set.
The truth is that nothing truly beats word-of-mouth marketing when it comes to ROI. Consumer endorsements are known to be free and effective and have far more perceived authenticity than advertising or marketing messaging that comes from the brand. A report by Ivesp, says that word-of-mouth referrals account for about 13% consumer sales every year. This amounts to about $6 trillion every year. Word-of-mouth impressions are thought to create at least 500% more sales than ordinary advertising because 90% people have been found to repose greater faith in a recommendation by a friend. Many college students are likely to make it to the right target group, for brands to spread their word of recommendation. This sub-segment shall in due course become loyal followers, when they start joining the populace of working people. However, it is pertinent to note here that college-goers are also picky about the products and services they are likely to recommend. Hence, to get more college-goers to talk about their brand, it’s important to tailor-make strategies to suit them and their interests.
The populace of millennials and Generation Z, has far transcended any other group. This segment has a very different sensibility of shopping and does not shop the way their parents or grandparents did. They mostly shop with the help of their smart-phones. At least 15% millennials have been found to make at least one mobile purchase every week. This rising trend, itself signals that brands must maintain significant presence across Facebook, Instagram and other platforms, to keep tapping into this enthusiastic pool of buyers.
However, a key aspect to mention here is that there is no reliable way to measure the effectiveness of word-of-mouth marketing. There is no real way to turn them from instinctual marketing to real, measurable results. As the advertising space continues to open up, brands keep vying with each other to tune into the consumption pattern of social media usage and consumption.
Despite a reliable way of gauging the effectiveness of these campaigns, brands continue to devote resources to get the attention of young buyers. College students are given sample products like free t-shirts, headphones, bags and more. The more students wear and carry these products, the more they become aligned to acting like brand-ambassadors for these products. And the more likely they are, then, to discuss the brand with their friends, family and peer circle. Thus consumers feel more tuned in to a brand when they feel that they can act as advocates of the brand and are listened to, by it.
Consumers feel more tuned into a brand when they feel like they can act as advocates of the brand
Let’s now take a look at some brands that have decisively made great use of word-of-mouth marketing.
The brand primarily targets the young crowd and is extremely popular with them. It uses brand ambassadors to great effect, with active representatives at college campuses. These representatives give away red-bull cans, along-with brand reminders that maybe of daily use to a college-goer, like t-shirts, caps, and hats. The brand’s focus on students maximizes peer recommendations.
Red Bull: A brand that focuses on word-of-mouth advertising
The brand takes advantage of its cult status among the young and sports savvy to use endorsements by athletes to influence millennials and Gen Z. The brand also runs a student ambassador program, focusing on active, young people whose lives and narratives resonate with the brand’s philosophy of fitness and passion, as well as of team achievement. The audience while recommending the brand to their peer circle of friends and family, ensure their social circles consider the brand, before making a purchase decision.
PINK by Victoria’s Secret:
PINK is a sub-brand of Victoria’s Secret. It is targeted primarily at youngsters. The brand is active on social media to resonate with the world of the young and happening and to keep relevant, with narratives that matter to them. These young ambassadors are avid consumers of the social media content of the brand. They also are amply in contact with marketing professionals of the company, engaging in regular meetings, to ensure that their voices are heard.
These online and offline interactions with the brand and the college students creates a sense of community, further popularizing the brand among this segment.