In the face of all the technological innovations we have today, companies often think that human nature can be excluded from the buyer’s journey narrative. Well, it cannot. At the end of the day customers are led by their emotions, curiosity, past experiences, and thorough research. Sharing positive experiences comes naturally to people. It makes them feel like they are helping their friends by sharing their recommendations. That is what word-of-mouth marketing is all about: buyers relaying positive experiences to friends and family by their own initiative (organic word-of-mouth) or when encouraged and rewarded by companies to do so (amplified word-of-mouth). But how did this phenomenon evolve, and what does it look like today? Find out in this article.
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We are also showcasing the latest trends in the world of loyalty as well. In this year’s edition of our Global Customer Loyalty Report, you can explore industry insights, relevant trends, and expert data-based predictions.
What Makes Word-of-Mouth Marketing Relevant and Influential in 2024?
Every single day, people are bombarded with advertisements, sales and special offers from all directions. So the question is, how can customers make decisions in all this noise? The answer is quite simple actually: Trust.
People purchase from companies that they trust to deliver the best results in terms of quality, effectiveness, satisfaction, and customer care. The brand that gains their faith gains their purchase — and loyalty as well. This is why word-of-mouth marketing is the answer you’ve been searching for.
Reputation is everything
In the time of shooting stars, fallen legends, screenshots and receipts, having a five-star reputation based on good reviews, high ratings, trust and loyalty from customers is a key factor for any company’s long-term success.
Actively working on cultivating a good reputation by creating the right environment, providing quality, and caring for your customers is extremely important for turning them into your advocates. Happy and satisfied customers share their positive experiences, leave great reviews and review friends, building an optimistic attitude and goodwill towards your brand, which you simply cannot buy — only earn. Who knows, some of those satisfied customers might even turn into brand ambassadors!
Where Do Customers Get Their Information From? Are You on the Same Page?
On one hand, one of the main sources of information is still experience-based advice from friends and family. Based on a recent report by Roundel, even the most tech-advanced generation, Gen Z puts a lot of value behind personal recommendations, stating that 40% of Gen-Z customers trust product recommendations from their inner circle.
On the other hand, in 2024, consumers have immense sources of information at their fingertips, which they gladly and often use for research. According to a customer review impact report from Gartner, more than half of US customers research reviews on the type of product or service they wish to purchase before making a final decision.
Suppose a customer encounters information that shows a company in a positive light. In that case, it elevates the company’s trustworthiness and makes it more likely that the customer will purchase from the brand. But if they encounter information with a negative slant, the opposite can happen. That’s why word-of-mouth is a double-edged sword.
Which Industries Rely Heavily on Word-of-Mouth Marketing? Start Buzzing!
Building anticipation and taking advantage of outstanding customer feedback has been a long-standing tradition in certain market segments. Still, in today’s world, every company with a solid social media presence should treat word of mouth as a powerful driving force.
Naturally, all companies should strive to build anticipation and take advantage of customer feedback via powerful social media campaigns. If you want to know which segment you should be focusing on, just take a quick look at your brand’s Instagram or TikTok FYP (For You Page).
In particular, there are three industry verticals that excel at word-of-mouth marketing:
- Streaming services: There is hardly a week when we don’t hear about the latest and greatest show coming to Netflix, Apple TV or Disney+.
- Beauty brands: With 53% of customers saying they actively look at influencers for beauty product recommendations, there is no denying the legitimacy and power of their impact and selling power.
- Music industry: Following the radical changes streaming has brought to the music industry, the role of individual artists and buzz-building certainly hit the roof. A perfect example is Canadian singer Tate McRae’s new song “Greedy”, which took over the charts. After weeks of social media buzz building and challenges, the song sailed right to the top of Billboard Global 200 in November 2023.
Organic vs Amplified Word of Mouth Marketing – Let’s See Which One Works for You
Organic word-of-mouth is characterized by:
- Customers share their positive experiences out of their own volition, simply because they are delighted with their purchase or experience.
- Leaving reviews and product ratings that are not incentivized by companies, financially or otherwise.
- Usually happens in-person, on e-commerce sites, on social media.
- This form of word-of-mouth marketing works well for every company regardless of size or industry.
- Especially helpful for local businesses.
Amplified word-to-mouth is characterized by:
- Companies actively encourage users and customers to share their experiences through referral or affiliate programs.
- Users can be rewarded with coupons, gifts, cloud storage, or discounts, depending on the company.
- Usually happens through in-app ratings, on-site reviews or social media content (influencer or ambassador channels).
- This type of word-of-mouth process works best with medium or larger brands since there are financial requirements involved.
The Long Line of Benefits of Word-of-Mouth Marketing
Word-of-mouth tactics have become a cornerstone for brands such Amazon, Ikea and Starbucks. It is a relatively cheap form of marketing, enables community building, and helps to build loyalty.
1. Cost-effective targeting
Generating positive reviews and high ratings is much more cost-effective than spending budget on generic ads, which most people don’t even trust to begin with. This is true for both organic and amplified marketing, as targeting an audience through their favorite influencer yields better results than going after a wider demographic.
2. Built-in trust factor
According to Nielsen’s report, 88% of people trust recommendations from their friends and family — more than any other reference. That means they are 88% more likely to check out or actually purchase your company’s product when one of their siblings recommends it, versus when they see it on a random roadside billboard.
3. Ready-made audience
By using amplified word-of-mouth and bringing influencers and ambassadors on board, you can harness the influence of their voice, their star power, social media reach, and the buying power of their fans and followers.
4. Organic hyper-relevancy
Friends and family members have invaluable insights about their loved ones and partners, including their taste, interest, hobbies, and problems. This puts them in the perfect position to recommend products and solutions in the most targeted way possible, using information that companies would have a hard time acquiring.
5. Encourages loyalty
Receiving excellent service from a company that was recommended to customers amplifies their joy, increases their customer lifetime value, multiplies the chances that they will sign up for a loyalty program, and has the potential to turn them into advocates as well.
5 Pillars of Word-of-Mouth Marketing – Entering Your Good Reputation Era
Generating and using positive word-of-mouth can definitely be a powerful cornerstone of your success. However, there are certain principles you need to meet for it to be effective, so make sure to keep the following 5 criteria in mind:
- Authenticity – Today’s customers value authenticity above all else, if your messaging and content isn’t authentic, they don’t want it. According to Adobe’s recent Trust Report, 55% of customers would never again purchase from a brand that’s broken their trust (in the case of Gen Z, this number is even higher at 60%).
As shown in a report by Deloitte, customers convey positive experiences to 9 people, but negative experiences to 16 people. By creating a positive impression, you not only strengthen the connection with existing customers, but also actively prevent bad PR.
- High quality product – It sounds quite simple, but is nonetheless true. Only a genuinely good product or service will be able to give people an experience they will want to share with friends and family. You have to offer them something unique, something that delights them, makes their lives easier, their routine more practical, or their work more effective.
- Engagement / Social inclusion – Creating content that entertains, educates and inspires will generate a much more everlasting effect than hopping on a quick trend hoping for a viral moment. Replying to your followers, reposting their UGC content and involving them in conversations will make them feel seen and heard, fostering their brand affinity.
- Appreciation – Showing love to your customers, appreciating their feedback, offering rewards, showcasing their reviews, changing your practices and evolving your business alongside their input makes them feel genuinely connected to your brand, elevating their sense of loyalty.
- Easy access – Whether you wish to encourage friend referrals, product reviews or affiliate influencer contributions, keep in mind that the easier it is for people to access your program, the more willing they will be to use it.
Creating Social Buzz with Clever Content – Innovation Is Key
Social platforms in 2024 have become more than just a place to look at cute cat videos. They’ve become legitimate sources of research and product discovery. Instead of visiting a mall and getting a consultation or going through every single lipstick shade tester, new products and testing filters are delivered straight to our timelines.
According to a recent study by SocialPilot, TikTok engagement is through the roof:
- 90% of users open TikTok multiple times throughout the day
- 64% of app users have tried face filters
- 35% of people took part in hashtag challenges
Campaign success these days relies heavily on the word-of-mouth that social buzz, well thought-out VR filters, or influencer campaigns bring to life. In order to fuel conversations, you need to think of content that’s innovative, helpful and easy to recreate.
Filtering out the Competition
Speaking of innovative and helpful, let’s take a look at Kosas’ new concealer beauty filter campaign. They created a filter that helps users figure out their undertone and matches them with the perfect shade of concealer. The filter has quickly become a much-talked-about topic in the beauty community, as it solves a specific problem people struggle with, while making the process fun and entertaining at the same time.
How Loyalty Programs Utilize the Power of Word-of-Mouth Marketing
Loyalty programs prove to be excellent additions, naturally boosting the effectiveness of word-of-mouth marketing strategies. For example, companies can cost-effectively incentivize users to leave reviews, rate products, or refer their friends using many different strategies. One of the most effective is through loyalty programs.
Achieving both engagement, cost-effectiveness and increasing interactions outside of the buying cycle, using loyalty rewards is a creative yet practical way to encourage members to spread the word about your products or services.
Different ways you can reward loyalty program members include:
- Offering extra membership points for rating or reviewing a product.
- Encouraging social media contests, accompanied with dedicated hashtags and incentivizing tagging friends in posts.
- Creating a special brand page feature for submitted user-generated content.
- Utilizing elevated tiers specifically designed for advocates and ambassadors (you can even name the tier specifically “Ambassadors”).
- Offering special free shipping or samples for product launch social campaign involvement.
It’s Time to Make People Talk (In a Good Way)!
Word-of-mouth marketing can be successfully utilized throughout a variety of industries and product segments. Building a good reputation, creating social buzz, and rewarding customers for relaying their delight and joy in your products leads to increased engagement, a wider audience and more frequent purchases.
Whether you’re building a word-of-mouth reward system through your website, app or loyalty program, it’s definitely worth giving it a try and cultivating goodwill for the future.
In case you’re interested in learning more about Antavo’s innovative and insightful loyalty platform, please don’t hesitate to book a demo or include Antavo in your RFP process.
Don’t forget to download our Global Customer Loyalty Report for the latest insights and expert predictions.
Zsuzsanna is a Loyalty Specialist with years of experience in digital marketing and e-commerce. Zsuzsanna is known for having an analytic approach and high-level communication skills, helping her deliver engaging content. In her free time, she enjoys watching Formula 1 and listening to endless Taylor Swift playlists.
