What are the benefits of word of mouth marketing?

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What are the benefits of word of mouth marketing?  Well where do you start?

There are many angles from which you can consider that question: cost, reputation, authenticity, virality.

Let’s deal with cost first, as its impact on the finances of an organisation are many.

In previous blogs, we’ve discussed how WoM can be used either as a supplement to existing marketing tactics, or as a standalone strategy in its own right.  Take Zappos, the online shoe retailer, for instance.  Their approach to generating demand for their products, shoes, has been to not spend any money on traditional marketing, but to invest the savings into amazing customer service.  We frequently reference Zappos as a case study in Word of Mouth That Works, and in one of those case studies describe how there is no time limit placed on the length of conversations with customers in the call centre – no call KPIs!  This drives their reputational word of mouth.

So not only do Zappos benefit from an industry shattering low spend on marketing, they generate immense word of mouth driven reputation, that drives their sales.

If we look at the cost of delivering a word of mouth campaign, there are pages of statistics, which we won’t repeat here, that show how more effective it is in terms of return on investment.  And the thing with WoM, is that it’s far easier to measure its RoI than any other form of marketing – even digital and social, that likes to think that it can show RoI.

And finally with cost, let’s consider a far more indirect cost benefit.  We love to use Fiskars as a case study – how they created a community of scrap-bookers that became a de facto R&D group for the development of new scrap-booking related products.  So a WoM derived community of advocates can even relieve you of product development and testing costs.

Now let’s consider reputation.  The key consideration here, is it’s not you telling your target market how good you are.  It’s your customers.  That links back to the question of what, or who, you are more likely to believe: an advert or a family member?

So WoM drives your reputation up, in a way that advertising can never achieve, because it’s not you doing it.

And that brings us to authenticity.  We all know that in this social media dominated age, an organisation just cannot escape the reputational damage from poor service or products, scandal, or any of the multitude of pitfalls that await us.  That almost forces us to be authentic, because if we’re not, we’ll be found out.  And ‘white-washing’, ‘green-washing’, whatever we want to call it, just will not suffice.  If you say one thing, and act in contrary manner, you will be seen to be inauthentic.

It is your authenticity that drives word of mouth.

Finally we have virality, the propensity for a story or message to spread virally.  With backgrounds in marketing, both Jake and I know the sums of money spent trying to create viral campaigns.  It’s not money that drives virality.  We explain in Word of Mouth That Works how you can create content that has that magic ingredient; how you can create a network of advocates and brand ambassadors who will take your amazing content and share it; and how you can keep creating WoM magic over and over again until it becomes business-as-usual.

So we’ve discussed many of the benefits of word of mouth marketing.  Are there any negatives?  Well, it takes a bit of mind-set shift.  And some of our WoMsters in WoMTWo have found that it can take time and energy to find your advocates amongst your existing customers.  But that’s a one-off cost.  Because once you begin to show them that you love them, once they see that you are returning the love, it’s an affair made in heaven.

benefits of word of mouth

Come and find out how you can take advantage of these benefits at www.womtwo.com

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About the author

Alan Casey

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I'm a purpose-led, nomadic, entrepreneur.

I believe that purpose-led business can play a leading role in creating more inclusive communities.  And that being purpose-led leads to amazing word of mouth stories being told about your organisation.

I'm nomadic because I constantly move between the land of my birth, England, the land where I spent half of my life, NZ, and the land where a lot of my development work occurs, Vietnam.

And I'm an entrepreneur because I just can't work in organisations any more.  There are too many issues and problems that I know how to fix, but never have the authority to act on.  So now I spend my time understanding the problems that organisations, have, articulating them, and then creating the solutions.

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