Word of Mouth Referrals: Still the Best Marketing Solution?
Word of mouth marketing is one of the oldest and arguably the best way to promote your business. After all what would you trust more - a company's website description or a friend's recommendation?
Scores of research studies have added weight to the value of word of mouth. For instance in 2010 the Goethe University Frankfurt and the University of Pennsylvania concluded that, following a customer referral programme using financial incentives, referred customers were more profitable and more loyal than customers sourced by other marketing means. Referred customers were also found to have a higher contribution margin, retention rate and overall value.
Why? Partly because many advertising streams fail to reach or connect with their target audience, so a recommendation from someone you trust resonates on a truly personal (and more believable) level.
Of course businesses can play a huge part in improving their word of mouth success, and it's not just a question of maintaining an excellent product or service. Companies that create a culture whereby clients consider themselves as valued partners rather than customers is an important foundation, as referrals stem more naturally from happy, engaged clients.
Businesses can also push the process along a little through the likes of referral schemes and competitions.
For instance, UBC has its own 'Refer a Friend' programme that offers an incentive of £250 to successful client introductions. This is worth its weight in gold as not only do we value clients spreading the word about us, it also helps us to connect with new businesses. In addition by the time the new customer has been referred, they already know what we do and how we work - so it helps to make our job easier too!
But is word of mouth still as valuable since the advent of online reviews?
This is an interesting possibility and one that has stirred up plenty of debate in marketing circles. An online review platform such as Yelp might not contain opinions of people you know, but you can get a pretty good idea of the quality and standard of your purchase by the sheer number and weight of reviews.
Online reviews are a fantastic opportunity for businesses and again, the best way to secure positive feedback is to maintain a high level of quality and create a culture whereby clients feel connected with your brand on a 'partnership' level.
Word of mouth and a general positive verbal buzz continues to be one of the best, and indeed the most cost-effective way to market your business. But like most things, a combination of factors is more likely to increase your level of success.
The best marketing mix is one that incorporates a variety of strategies to connect with groups of people in a way that's relevant to your business and your target audience. This, backed up by positive reviews and referrals, is more likely to raise the profile of your brand and reach new clients than relying on the good word of your customers alone.
And naturally, while you're rolling out all those different marketing strategies, be sure to continue spreading the good word by telling potential clients what others have said about you!
What are your thoughts? Do you value word of mouth over other forms of marketing? Do let us know.