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27.08.2021

18 Fascinating Word of Mouth Marketing Statistics Showcasing Its Great Effectiveness

by Milos Djordjevic

Word-of-mouth marketing (WOMM) occurs when consumers share their experiences and opinions on a product or service in interactions with other people. This has the potential to make those other people try it and become consumers themselves.

As you’ll learn in our overview of the most recent word-of-mouth marketing statistics, it’s one of the most effective ways to promote a product. WOMM is more than a mere endorsement or recommendation — it can also create buzz and help the product go viral on social media.

We’re bringing you the latest WOMM stats to explain how effective this marketing method can be and how difficult it is to create positive chatter around a product.

Top Word of Mouth Marketing Stats (Editor’s Choice)

  • Word-of-mouth marketing drives more than $6 trillion in consumer spending annually.
  • 83% of consumers are more likely to buy a product recommended by a friend.
  • Word-of-mouth marketing is equally effective among all age groups.
  • 51% of satisfied consumers will personally advocate for a brand.
  • Hiring a micro-influencer to generate word of mouth can boost sales by up to 18%.
  • 28% of millennials won’t try a product their friends don’t endorse.

Essential Word of Mouth Marketing Stats and Facts

At first glance, WOMM seems straightforward — create a good product, launch an initial campaign, then sit back and wait for the buzz to start generating and bringing in revenue.

In reality, it’s a lot more complex than that.

Before we get into the nuts and bolts of WOMM strategies, let’s discuss the essentials of word of mouth and its effectiveness as an advertising strategy.

1. There are two main word-of-mouth channels.

(Convince & Convert, Chief Marketer)

Verbal word of mouth — also referred to as “offline” — is as old as modern societies. Yet, despite its age, this type of social interaction still has a tremendous impact on consumers. Organic word-of-mouth sales can happen as a result of discussion among friends, family members, co-workers, and others willing to share their experiences with a specific product.

The other, more contemporary channel is online word of mouth.

In the online world, a word-of-mouth recommendation doesn’t necessarily come from a close person. What’s more, it can often be amplified by the brand itself. Social media profiles with reviews, Facebook groups, review blogs, and simple interactions on a brand’s social media post — it all counts as word of mouth. However, it’s important not to mix these up with targeted online ads as they impact the consumer’s behavior differently.

2. Six basic principles drive word-of-mouth referrals.

(The NonFiction Zone)

Behind every successful marketing strategy is a deep understanding of the human psyche.

The six principles that drive effective word-of-mouth strategies include:

Word of Mouth Marketing Statistics - Six basic principles

3. According to word of mouth statistics, WOMM drives more than $6 trillion in consumer spending every year.

(Invesp)

WOMM is one of the most reliable marketing techniques, as it’s estimated to account for about 13% of annual consumer spending globally. Even more important — a well-planned WOMM strategy can result in five times more sales than a paid advertisement.

4. A good word-of-mouth marketing strategy shows 30% more success than other approaches.

(Invesp)

Marketing is all about turning lurkers into consumers. Companies have numerous strategies at their disposal and will usually try at least a few. However, WOMM leads the way in terms of effectiveness as it converts 30% better than other strategies.

5. Only 8% of people think internet ads are the best source of product information.

(HubSpot)

The importance of word of mouth is evident when we see how few people trust official ads.

Of course, internet ads are crucial for brand awareness.

But looking at it from a psychological point of view, consumers go through a long process between finding out about a product and deciding to buy it. During that process, they’re least likely to rely only on the internet ad for product information, as 75% of them don’t find ads credible. Instead, they’re looking for a referral from a trustworthy source.

6. 83% of consumers say they’re more likely to buy a product recommended by a friend or family member.

(Convince & Convert)

According to recent statistics on word-of-mouth marketing, a close person’s verbal recommendation can be very persuasive for US consumers. The same percentage of Americans (83%) say they’ve recommended a product to others at least once in the past.

7. 67% of consumers will stop buying a product if the brand behind it doesn’t gain their trust.

(Edelman)

While the word-of-mouth effect may get people to try a new product, more than two-thirds say they’d stop buying it if the company behind the product failed to gain their trust.

Some of the best ways to earn the consumer’s trust include quality, good customer care, and a personalized marketing approach. Of course, word-of-mouth marketing is also essential in building trust with consumers — especially first-time customers.

Word-of-mouth marketing statistics show that 62% of them have concerns about the product experience. As such, a recommendation from someone they trust could be the push they need to give a new product a chance.

8. WOMM strategies are equally effective among all consumer age groups.

(Extole)

In most cases, marketing campaigns have to be calibrated for different age groups.

But there’s no need for that with word-of-mouth strategies as all age groups almost equally trust referral advertising — 83% of Gen-Zers, 85% of millennials, 83% of Gen-Xers, 80% of boomers, and 79% of the so-called Silent Generation (born from 1928 to 1945). The fact that word of mouth’s effectiveness is so leveled across age groups only speaks to its power.

9. Consumers are more likely to share negative experiences with a product.

(Vendasta)

A single bad experience shared by a customer can cause severe damage to a brand. The damage is often irreparable, and no amount of positive word of mouth can reverse it.

Negative word of mouth statistics suggest people are considerably more likely to talk about their bad experiences with products and services. Namely, 54% of consumers will tell at least five people that they’re unhappy with some product. On the other hand, just 33% say they’d be as eager to share their positive experiences with the same number of people.

Key Word of Mouth Advertising Statistics for Marketers

Word of Mouth Marketing Statistics - Key WOMM advertising stats for marketers

Developing a successful WOMM strategy isn’t easy. Because WOMM channels are often completely organic and out of the marketers’ hands, a lot of data is necessary to plan out the approach that will create positive buzz and convert potential consumers into loyal customers.

In this section, we’ll discuss some statistics that can help brands create WOMM strategies.

10. For 77% of consumers, word-of-mouth reviews are a deciding factor when making purchasing decisions.

(Edelman)

More than three-quarters of consumers see word of mouth as the most valuable tool in gaining insight into a product’s quality. Endorsements have the strength to push consumers to purchase a product or — in case of negative word of mouth — go with another brand.

Ultimately, recommendations are a significant factor, as only 34% of consumers trust the brands behind the products they regularly buy.

Companies aren’t powerless, though. They can improve their likelihood of getting good reviews by providing good customer service and personalizing their advertising campaigns.

11. 51% of satisfied consumers will personally advocate for the brand.

(Edelman)

One of the biggest benefits of word-of-mouth marketing is that it can turn loyal customers into real-life brand ambassadors — and companies don’t have to invest anything.

Brands can develop strategies to create chatter and buzz about their product, but organic word of mouth is most often the result of consumers’ satisfaction with the product. More than half of them will advocate for the brand independently, and 43% will even defend the brand if needed. Additionally, if a brand earns the consumers’ trust, up to 81% will recommend it.

12. 63% of consumers trust influencers more than the brands themselves.

(Edelman)

There’s an ongoing industry debate about whether influencer marketing qualifies as a type of online word-of-mouth marketing. But the strategies influencers employ and the way brands use them are very similar to the well-established word-of-mouth practice.

According to a recent report, influencers hold a lot of sway over consumers. Namely, 58% of consumers say they recently bought a product because an influencer they trust endorsed it. Moreover, 40% say this endorsement increased their trust in the brand behind the product.

13. Micro-influencers can boost sales by up to 18%, word-of-mouth marketing statistics show.

(Journal of Marketing)

Influencers with large followings may not be as reliable as they once were.

The reason is simple — more and more consumers are aware that major influencers who praise a product are merely selling it and not speaking from personal experience.

For this reason, many companies now opt for “seeding” strategies by building smaller WOMM channels. They find it more financially viable to hire several micro-influencers to start the buzz on a product than give all that money to just one well-known influencer.

14. Word of mouth has the biggest impact on people looking for dining out ideas.

(Statista)

Word-of-mouth advertising’s effectiveness varies based on the product or service type.

Consumers looking to dine out are most influenced by recommendations (37.6%). People interested in buying electronics follow in second place (33.1%), while food and beauty products shoppers are in third (32.2%). Interestingly, data suggests that word of mouth has the least impact on people looking for financial (18.8%) and telecom services (17.7%).

15. 28% of millennials won’t try a product their friends don’t endorse.

(Extole, Marketing Charts)

Among all age groups, millennials trust word of mouth the most, especially when it’s coming from within their friend circle. This also applies to word-of-mouth marketing on social media.

Unlike Gen-Xers and baby boomers who see social media circles as impersonal, up to 74% of millennials say that their online friends’ recommendations impact their buying decisions.

16. 73% of consumers say that a brand’s reputation among people they know is an important buying consideration.

(Edelman)

Along with word-of-mouth marketing strategies, successful brands know that consistently building a good reputation brings rewards. Statistics about word of mouth from a recent report show that 73% of consumers will consider whether a brand has a good reputation among the people they know before deciding whether to purchase its product.

17. Direct incentives for the consumer are the best way to get a referral.

(ReferralCandy)

Product quality alone isn’t enough to launch the word-of-mouth chain among consumers. To jump-start this process, more and more companies choose to give incentives to customers.

Statistics on word-of-mouth marketing spending suggest that material or monetary incentives (e.g., store or brand credit) work the best — 39% of consumers say they’re much more likely to recommend a product in such cases. Social media recognition (25%) and loyalty program points (23%) are less effective but can still help boost referrals.

18. Referred consumers are 37% more likely to stay loyal to the brand.

(Invesp)

Once a brand wins over a new consumer, it has to work hard to retain them. To do this, companies use different strategies like rewards programs and personalized marketing.

But the immense power of word of mouth may make customer retention easier.

Research shows that consumers who discovered a brand via a referral are 37% more likely to stay loyal. They’re also four times more likely to spread the positive word of mouth further.

Word of Mouth Statistics for 2021: In Conclusion

Word of mouth is perhaps the most primitive form of advertising.

Long before we were living in modern societies, the best way to gain peace of mind before purchasing a product was to look for a recommendation from a trustworthy source.

As our overview of word-of-mouth marketing statistics for 2021 shows, the basic principle of WOMM has survived to this day. And with the rise of social media and online communication in recent years, it’s hard to imagine a future in which these strategies will lose effectiveness.

FAQ

What is a word-of-mouth marketing strategy?

A WOMM strategy is an effort to spark positive discussions — online and offline — about a product or service. The goal is to get consumers to recommend the product or service in everyday communication and thus influence other people’s purchasing decisions.

How effective is word-of-mouth marketing?

Word-of-mouth marketing is one of the most effective advertising techniques out there.

A strong WOMM strategy can result in five times more sales than a paid advertisement. It is most effective in the dining out category of products and services — 37.6% of customers are influenced by recommendations when deciding on a restaurant to visit.

However, word of mouth can also be negative and cause severe damage to a brand. Worse yet, customers are 24% more likely to share a negative experience than a positive one.

How much of business is word-of-mouth?

Word of mouth is very valuable, driving more than $6 trillion of consumer spending annually.

WOMM accounts for an estimated 13% of all consumer sales. It’s no surprise considering the effectiveness of WOMM — it results in up to five times more sales than a paid ad.

Industry experts agree that as the consumer markets continue to evolve and saturate, WOMM will play an even more significant role. Currently, 90% of people are more likely to buy from a brand based on a friend or family member’s recommendation.

What percentage of marketing is word-of-mouth?

It’s impossible to say precisely which percentage of marketing is based on word of mouth.

As the process is out of businesses’ hands, a lot of it doesn’t depend on their efforts and strategies, so it’s difficult to establish reliable word-of-mouth metrics. While brands can hire influencers to generate the buzz around a product, they can’t control what happens next.

All we know is that experts estimate WOMM is responsible for 13% of global consumer spending each year. Various sources also report that word of mouth influences anywhere between 20% and 50% of purchasing decisions people worldwide make.

What is one of the most powerful forms of word-of-mouth marketing?

There are several effective forms of WOMM, but reviews and testimonials stand out.

Thanks to the ever-growing popularity of digital media, consumers are now more informed than ever, and they rarely purchase a product impulsively. For 77% of them, positive reviews are among the top considerations when deciding on the purchase.

Encouraging and incentivizing reviews is usually very effective. However, the product quality and customer service must be top-notch to avoid negative feedback.

How to do word-of-mouth marketing?

Brands don’t usually rely on a single WOMM strategy. Instead, they combine multiple approaches and switch them up over time to see what brings the best results.

Reviews and product testimonials are now among the most commonly used strategies. In fact, it’s quite uncommon to find a company or an online retailer that doesn’t offer reviews.

According to word-of-mouth marketing statistics, incentives for consumers have also proven to be very effective as they increase the chances of consumers sharing positive thoughts on the brand. The incentives can be monetary (e.g., store credit), recognition-based (e.g., sharing someone’s post on the company’s official social media accounts), or loyalty-focused (e.g., giving select customers access to special offers as a reward for their loyalty).

Sources:

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