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Word Of Mouth Marketing Statistics, Fun Facts & Tips In 2020

word of mouth marketing statistics

Even though technological advancements have given birth to a variety of marketing channels and tools, word of mouth or WOM marketing hasn’t lost its relevance.

People continue to interact with each other in social settings and share their experiences as customers and consumers, albeit the modes of these interactions have changed with time. Word of mouth is still the most common way customers learn about new offerings and promotions. It can either help you win more business or cause you to lose clients. Not convinced?

Let’s take a look at some word of mouth marketing statistics to see the role this kind of customer engagement plays in business marketing and how it can affect a business’s reputation. We will also give some word of mouth marketing examples.

Let’s do this!word of mouth statistics

Can you see yourself asking for or sharing your personal experience with your friends and family? Well, join the rest of us and let’s dive into the word of mouth marketing statistics we collected for you!

Fascinating Facts

  • Being one of the most trusted channels, WOM marketing is key when it comes to decision making.
  • 92% of consumers trust recommendations from friends.
  • WOMM brings in 5 times more sales than paid media.
  • 74% of consumers identify word of mouth as a critical influencer in their purchasing decision.
  • 88% of customers trust online reviews.
  • 64% of marketing executives consider word-of-mouth to be the most effective form of marketing.
  • Brands that are able to create an emotional connection receive three times more word-of-mouth than those that don’t.
  • Word of mouth drives $6 trillion of annual consumer spending.

Word of Mouth Marketing Statistics 2020

Here are some interesting WOM marketing statistics to make you realize the importance of word of mouth in the world of business:

1. Word of mouth promotion is the most trusted of all forms of marketing – 86% of customers trust word-of-mouth reviews and recommendations.

(Source: Referral Candy)

The latest research reveals that word of mouth effectiveness supersedes all other major marketing channels. These include television advertisements, print ads, and even social media.

2. 59% of customers like to give word-of-mouth feedback – they tell others about new products and services.

(Source: Referral Candy)

More than half of the buyers tend to share their reviews of new products and services with other people. Depending on individual preferences, this could either be done online, offline, or both.

3. People are 4 times more likely to buy a product or work with a business when referred by friends.

(Source: Impact)

The trust factor plays a major role here. Since people trust their friends to give honest reviews of a product, service, or company, they are more likely to purchase from the brands recommended by friends.

4. According to the word of mouth advertising statistics, 85% of small businesses are discovered by customers due to word of mouth recommendations. 

(Source: Writer’s Block Live)

Since small businesses do not have huge marketing budgets, they rely heavily on word of mouth marketing to gain new customers, and the majority of them are discovered through word of mouth channels.

5. 13% of all sales are driven by word of mouth marketing.

(Source: Invesp)

The sales percentage may not seem too impressive. But, it can translate to a significant number of sales for big businesses with hundreds or thousands of customers.

6. Customers acquired through word of mouth promotion spend 200% more than the average customer.

(Source: Referral Candy)

Word of mouth marketing not only helps you attract more people but also gets them to spend more money. Simply put, people spend more money when buying from brands they have been referred to or recommended by other buyers than the ones that they have discovered through other channels.

How Effective Is Word Of Mouth Marketing?

By definition, word of mouth marketing is free and accessible by any business. This makes it one of the most common forms of promotion. People are happy to share their experience with goods or services – either online or face-to-face, either positive or negative.

The word of mouth marketing statistics in 2019 reveal its great influence. Why is that? What makes the word of mouth marketing so important? 

It’s all about the driving force – the people. There’s nothing more powerful to us than our own experiences, right? 

7. Being one of the most trusted channels, WOMM is key when potential customers make decisions.

(Source: Forbes)

  • Half of Americans would choose word of mouth when deciding on a source of information.
  • Americans trust word of mouth recommendations from friends and family 41% more than social media.
  • Millennials are more than twice as likely to be influenced by word of mouth when voting.

We seek our friends’ advice on just about every topic we can think of. When it comes to planning a wedding, though – it’s a must that we receive a hands-on experience recommendation about every bit of it. Recommendations from friends are valued over 300 times more than anything else when it comes to planning the big day.

43% of Millenials and 71% of Boomers rely on word of mouth and previous experience when making a purchasing decision about wine and Champagne. Cheers!

8. 92% of consumers trust recommendations from friends.

(Source: BigCommerce)

  • Over 65% of US internet users refer to word of mouth recommendations from family, friends, and co-workers when looking for a physician, while 51% trust insurance providers.
  • 56% of all grocery shoppers count on friends and family to make sense of new products, while 21% of book purchasing decisions are influenced by recommendations.
  • Movie theater addicts looking for recommendations from friends on social media account for 40%.

With the boom of social media channels, another layer of word of mouth advertising emerged. Now we have at our disposal a good amount of online recommendations shared by our fellow social media friends. As the saying goes: the more word of mouth channels – the merrier, right!

Social media is the perfect environment to get as many viewpoints as we need, to share ours with a broad audience, to take only what fits our interests. All of that with ease, with a great reach and as fast as your internet connection allows.

word of mouth recommendations for a wedding

9. WOM marketing brings in 5 times more sales than paid media.

(Source: Invesp)

  • 19% of a brand’s sales – between 7 and 10 trillion USD in the USA alone, are driven by social conversions – both online and offline.
  • 80% of furniture retailers identify word of mouth as their most powerful marketing approach.
  • Friends referrals make consumers four times more likely to make the purchasing move.

Paid marketing campaigns can be expensive, time-limited and inefficient. Instead, why not make your customers the ambassadors of your brand. Let them spread the word about the quality and satisfaction with your services. 

Your successful word of mouth marketing strategy would be to go the extra mile and inspire both online and offline conversations about your business.

10. 74% of consumers identify word of mouth as a critical influence in their purchasing decision.

(Source: Ambassador)

  • Speaking about the influence of word of mouth marketing, 2017 stats show that most influenced by a word of mouth recommendation are people looking for a place to have dinner – close to 38% followed by the electronics category – 33%.
  • Unlike Generation X and Boomers, Millennials are 99% more likely to refer to social media when it comes to choosing a restaurant.
  • In 2015, 7% of the US population received product recommendations through social media.

Whether you posted your review online or shared it with your friends face-to-face, it still makes а difference. But we are already very much used to social media, so if you are a business owner, chances are that you will receive a lot of reviews online too. You need to pay close attention to those.

Two-step recipe for success:

First, create your Brand – put your heart in it and second, add Value to your product or service – offer quality above anything else. The final result – a happy customer. One happy customer equals an X amount of potential leads, don’t forget that!

11. 88% of customers trust online reviews.

(Source: Ambassador)

  • People read an average of 10 online reviews before trusting a brand.
  • Most negative and outraged comments often get the most traction on social media. 
  • Customer reviews online are valued by 70% of us.
  • Among the most trusted celebrities these days are Oprah Winfrey (4%), Donald Trump (2.8%) and Warren Buffett (2%).

Correct – we trust strangers way more than ads nowadays. Wait, they’re not simply strangers but people with experience that we value and seek. From unboxing and assembling a new drawer – to fixing an irritating error popping up in Outlook. 

Word of mouth marketing stats are clear that we seek reviews of other people. 77% of people would write a review if asked, so give people the means to do so, sit, watch and analyze the feedback.

millennials are influenced by word of mouth when voting

Negative Word Of Mouth Stats

We touched on this already – outrageous comments get the most attention on the web. How exactly impactful is negative word of mouth? Let’s see.

12. Negative word of mouth reviews have a higher impact and spread faster than positive feedback.

(Source: Reputation Refinery)

  • According to word of mouth marketing statistics, 96% of unhappy customers don’t complain to the company about a bad experience; however, they share their bad experience with about 9-15 people.
  • About 13% of unhappy customers share their bad experience with 20 people.
  • A happy customer, on the other hand, only tells 3 people about it.
  • A whopping 91% of unhappy customers will not buy from a company they’ve had a bad experience with again.
  • It takes about 40 positive customer experiences to undo the damage done by 1 negative review.

Negative word of mouth marketing can ruin your business’s reputation since consumers are more likely to share bad experiences and with more people than they would share a good experience with. What makes this behavior even more troubling is that most customers do not register their complaints with the brand they have had bad experiences with. This means, in most cases, that brands won’t even know how many potential customers they are losing due to negative word of mouth marketing and, hence, won’t be able to do anything to control or rectify the damage.

Word Of Mouth Marketing vs Advertising Statistics

How is the advertising industry performing in 2020 compared to people’s recommendations – offline and online?

13. 64% of marketing executives consider word-of-mouth to be the most effective form of marketing.

(Source: Forbes)

  • Word-of-mouth is influencing 99% of all B2B purchases.
  • Only 33% of businesses seek and collect reviews.
  • Word-of-mouth boosts marketing effectiveness by up to 54%.
  • 75% of people don’t believe advertisements.

There’s clearly a contradiction here. While product recommendations are a standard and the results are clear, businesses still tend to somewhat disregard word of mouth influence

The popularity of social media has us spending longer on our mobiles doing all sorts of things – and we’re constantly interacting with each other. Word of mouth is more powerful than ever.  

Walmart, Coca-Cola, and Samsung are the brands people have chatted most about offline, while Fox News, the NBA and the NFL are the most-talked-about in the online communities in 2017.

14. Brands that create an emotional connection receive three times more word-of-mouth than those that don’t.

(Source: FriendsBuy)

How do we do that? It’s not a simple process, of course, but it’s doable. 

Here are some word of mouth marketing ideas that you can work on and apply to your marketing approach:

  • High-Quality product
  • Excellent customer service
  • Intuitive order process
  • Reliable delivery channel
  • Customer ‘flattering policy’
  • Seek out reviews

With an estimation that by 2040, 95% of all purchases would be made through eCommerce, you should think again about your web presence. Design your website with a smooth checkout process, ask for feedback, create a community on social media and interact with your customers – the happy and the not so happy ones. 

Word of mouth marketing statistics demand that you take the good with the bad. Make it right!

At the end of the day, WOMM is the power of people to build brand awareness and why not bet on it as a business owner? With a polished product and outstanding service, a word of mouth marketing strategy can get your business to the next level. 

 

Amazon is the most loved brand in America in 2019 with 68% of consumers trusting the brand and about 80% with a favorable opinion about it.

15. Word of mouth drives $6 trillion of annual consumer spending.

(Source: Invesp)

  • Word of mouth marketing spend is expecting to grow by 70% for online WOMM and 30% for its offline counterpart.
  • 43% of marketers using WOMM are estimating an increase in sales. 
  • Offline word of mouth increases sales with about 20%
  • WOM drives 200 times more sales of products in sensitive niches (such as baby food) compared to paid advertisements.

WOMM is the perfect advertising strategy to create buzz and sentiment around your product or service and have people organically raise your brand’s popularity. The best part of it – it’s free of charge!

77% of boomers reply on word of mouth when choosing wine

Frequently Asked Questions

Q: What is word of mouth marketing?

A: It is a form of promotion where a user of a certain product or service recommends it to others. The traditional form of word of mouth used to happen face-to-face. Lately, though, we have been giving WOM recommendations online too – via social media, forums, product reviews, etc.

Q: What is a word of mouth marketing strategy?

A: It is a process of actively encouraging conversation (either offline or online) about your brand, service, event, etc. There are various techniques that marketers apply to achieve the goal – have people build your brand’s awareness themselves.

Q: How do you stimulate the word of mouth marketing recommendations?

A: Various paths to get there:

  • Design a website that everybody is tempted to talk about
  • Create a smooth order process
  • Encourage feedback through your website and social media channels
  • Create a community on social media 
  • Interact with your customers – comment, answer questions

Q: Why is word of mouth so important for marketers?

A: Word of mouth recommendations are a powerful tool you can use to drive sales. Websites that feature reviews or ratings influence purchasing decisions – 63% of visitors are more likely to buy after reading one.

Q: How can I improve my word of mouth marketing?

A: There are a couple of easy steps to take:

  • Encourage a referral program
  • Create a customer ‘flattering’ policy
  • Keep your customers in the loop – product development steps or an upcoming event

Q: Is word of mouth a form of advertising?

A: Yes. It’s a way to get free advertising for your products and services – through people recommending them to each other. The recommendations are shared either face-to-face or online.

Q: How word of mouth affects a business?

A: WOM increases sales 5 times more than paid advertisements. Face-to-face advice has a bigger effect on purchasing decisions than online reviews; however, both can make a huge difference.

Wrap Up

Marketers are well aware of the effects of the word of mouth marketing techniques. Being arguably the most dynamic, evolving and impactful industry today, marketing specialists are equipped with the tools to measure that effect. 

While the core of WOMM is still the advice based on personal experience, there are still ways to take this concept further. As with anything that brings money, marketers have taken WOMM down to a science. As such, it has the potential to bring in great results.

We hope that with the word of mouth marketing statistics we talked about, we triggered your interest to learn more about WOMM. Why not implement it into your marketing strategy?

See you soon!

 

Sources:

  1. Referral Candy
  2. Referral Candy
  3. Impact
  4. Writer’s Block Live
  5. Invesp
  6. Referral Candy
  7. Forbes
  8. BigCommerce
  9. Invesp
  10. Ambassador
  11. Ambassador
  12. Reputation Refinery
  13. Forbes
  14. FriendBuy
  15. Invesp

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