Disadvantages of word of mouth advertising

What is Word of Mouth Marketing?

Word of Mouth Marketing (WOMM) is when a product influenced the customers so much that it becomes their routine dialogue. The customer keeps on sharing his experiences with others and advertises the product in the disguise. Companies and businesses encourage word of mouth marketing by organizing events, where customers communicate with other customers and influence their decision.

Who Uses Word of Mouth Marketing

Word of mouth marketing is when customers share their product experience with their friends and relatives. According to an estimate, 92% of the people trust their friends rather than media. That’s why companies and businesses encourage WOM marketing by providing a quality product to the customers.  

By encouragement I mean that companies provide new insightful information about the product that customers aren’t aware of. They also teach customers the new techniques and methods of sharing information about the product to influence their decision.

How Effective is Word of Mouth Marketing?

Here are some of the statistics of the word of mouth marketing that will help you to analyze its effectiveness.

• According to a study, 13% of the total annual consumer sale comes from WOM marketing with the worth of 6 trillion US dollars.
• WOM marketing generates 5 times more sales than the paid media campaigns, and people trust and buy recommended products 90%.
• 88% of the people put a high level of trust in the people that they know.
• A company that emotionally connects with customers generates 3 times more sales than the brand that does not.
• 28% of the customers say that WOM marketing is a significant factor influencing their brand affinity.
• 64% of marketers believe that WOM marketing is a very effective marketing tool.
• 70% of the marketers are planning to increase their spending on online WOM marketing, and 29% of the marketers are planning to spend on offline WOM marketing.
• 80% of the advertisers use WOM marketing for brand awareness, and 43% of the marketers use WOM marketing for direct sales.

Word of Mouth Marketing Strategies

Here are some of the following word of mouth marketing strategies that you should use;

Offer Something Unique

You should come up with something unique and different and offer it to the customers, that would amaze people and they would share their experience with others. It doesn’t mean that you have to redo everything again, just work on some old ideas and present it differently. Or you should follow some different marketing strategies.

Rating and Reviews System

Sometimes people like your product, but they won’t recommend it to dozens of their friends and family members. It means that you can use their feedback for your marketing purposes. According to a study conducted by Bright Local’s Customer Review Survey in 2017;

• An average person studies at 7 reviews before trusting any brand.
• 85% of people trust online reviews like real-life recommendations.
• 49% of the people think that a 4-star rating is a minimum requirement for the purchase decision.

Tap into People Emotions

Emotionally connecting with your customers is a very powerful tool that would make customers talk about the company’s product. It could be a common belief that the company’s product and customers have in common.

For instance, e-commerce retailer ‘Ben & Jerry’s’ emotionally connect themselves with customers by showing them that they’re environmentalists.

Referral Program

A referral program is a great idea of convincing people to refer the company’s product with their social circle. But if you attach rewards with more referral and successful conversion, then people would take it seriously to win the rewards because they are a great source of motivation. Rewards could be in the form of bonuses, cash prizes, gifts, or discounts. Referring programs should be simple and done with few clicks.

Offer Incentives

If you offer incentives to the customers that would do WOM marketing for your brand, then more and more people would be willing to do it. It doesn’t matter that incentives are big or small; customers would do WOM marketing for you if they get something in return.

You should offer discounts to your customers if they do refer.

Connect with Industry Influencers

You should connect with those people that have a great influence over the public and also have a plethora of following. It means that their platform is well established, if they do WOM marketing for your brand, then it would have a major influence.

Mention, tag, and feature those influencers in your content, and provide them free services that they would actively engage.

Focus on User Generated Content

User-generated content means that the content relevant to your product generated by customers. It could be random and poorly worded, but honestly that would attract customers. You can identify customers’ content by using the hashtag, offer rewards to those who would create content like social media post, picture, or gif, and make them feel that you are a part of their community.

Advantages of of Word of Mouth

Some of the advantages of word-of-mouth marketing are as follows;

Trust

People are willing to trust something when they see other people happy using the same product. According to an advertising report prepared by Nielsen Global Trust that 92% of the people follow the recommendation of their friends and family, rather than traditional marketing. Word of marketing takes a turn in the age of science and technology by forcing marketers to rely on the referral of their customers.

Lost Cost

The marketing and advertising budget of companies comprise of hundred and thousands of dollars. WOM marketing and referral programs don’t have any cost compare to them. Like email marketing or social media marketing, you just have to create engaging content and send it to the customers.

Long-term Value

According to a study on integrated marketing and sales conducted by the University of North Carolina that the people who purchase your brand’s product through referrals are more likely to purchase it again than those who are through media and advertising. It is because referral marketing attaches a memory of a referring person. Therefore, referring memory lasts longer than an ordinary advertisement.

Branding

A market comprises a lot of big competitors; it becomes difficult for a small business owner to establish his brand. However, WOM marketing and referral provides a unique touch to your brand. It could be in the form of tips, articles, or other materials that interest people, and they would share it with friends.

Disadvantages of Word of Mouth

Some of the disadvantages of word-of-mouth marketing are as follows;

Slow & Limited

WOM marketing is good, you can’t expect it to reach and influence everyone through it. It works slowly and it has a limited reach. The electronic version of the referral program is much faster, and it doesn’t guarantee the conversion. There’s a limit to one’s contact, and it would work in the beginning but not in the long term.

Time is very important for new businesses. If your business doesn’t produce something in the beginning, then it would keep on accumulating expenses. WOM marketing works, but it is slower and you never know whether it works or not.

Difficult to Track

It’s difficult to track the conversion rate from the referrals. Small businesses don’t have the expertise of whether the converts are either from the referral or the new ones. George Silverman said that you would need to know not only what is said but who said it, and the sequence of information should continue. The reason that you require such information is that you would it for planning in the future.

Bad reviews

Bad reviews and negative feedback of unsatisfied customers can badly impact the overall performance of your business. It would also discourage and create doubts in the minds of new customers. They would run away before even check it out your product/service, and they would also share the bad experience among their social circle.

Word of Mouth Marketing Examples

ALS Ice Bucket Challenge

ALS launched a challenge of pouring ice bucket over you in 2014, the participant has to make a video and send it to them. The purpose was to raise funding, people across the world participated in the contest. The campaign was a great success over social media and it collected 115 million US dollars in 8 weeks.

Netflix

Netflix studies the pattern of shows that people watch and then recommend similar shows to them. The regular watchers of Netflix share their experiences over social media, and Netflix targets the social circles of its followers.

Slack

Slack is a great tool for small businesses that they can use it for free in the beginning, but it depends on the referrals and WOM marketing. Now, slack has a much wider audience because of its referral programs.

Conclusion

If you are a small business owner, then word of mouth marketing is a great tool for you to reach more people. But you can’t rely on them forever because it has a limited range. Eventually you would need paid media to go beyond. Most importantly, you should be certain about the performance of your product, because negative marketing spread much faster than positive referrals.

Word of mouth (WOM) marketing is when customers share their product or service experience with their friends, relatives, and family members after using it. Other people would start using the product or service based on your recommendation. We’re living in the era of the digital age, but the significance of WOM is still there. Today, we’ll discuss the word of mouth marketing advantages and disadvantages.

Word of Mouth Marketing Advantages 

Some of the pros and advantages of word-of-mouth marketing are as follows;

Creates Impact

Before implementing any other marketing and promotional strategy; it is significant to keep in mind this statistical figure that 50% of the US people would prefer word-of-mouth recommendations. When they have to select one valid source of information out of many about a particular product or service, then they would prefer the recommendation of their friends. (Word of Mouth Marketing Advantages and Disadvantages)

Almost Free of Cost

Your loyal customers are sharing their positive product or service experience with their friends and acquaintances, and you don’t have to pay them for their referrals and recommendations. WOM marketing allows you to approach such an audience that you can’t reach through any other medium. However, WOM is a type of strategy that works well with other marketing and promotional strategies like content marketing, ad campaigns, and SEO strategy.

Valuable Referrals

It is possible that people are familiar with your brand name through marketing and promotion. But if they receive recommendations and referrals from their friends about your brand, it would help your business to attract a lot of new customers. According to an estimate, approximately 84% of customers believe in the recommendation and referrals that they receive from their friends.

Keep Multiplying

Word-of-mouth marketing is a completely different form of marketing and promotional strategy. Other strategies require consistent investment and work, but WOM doesn’t. You just have to develop and maintain the quality product, and it would make people keep talking about your product and service. Ultimately, the growth of your customers would keep on increasing.

Easy to Launch

As I mentioned earlier, another form of marketing strategy requires huge investment and planning to start, but WOM is very simple and easy to launch. You just have to make sure that your product or service is adding value to the lives of customers and that they are successfully engaging with it. All it requires is your creative approach; you can launch and boost your word-of-mouth marketing campaign with a very limited budget.

Establishing Relationship

WOM marketing campaign allows you to connect with people and establish a relationship with them. Ultimately, it amplifies your probability of increasing your sales and revenue and the success of your company or business. (Word of Mouth Marketing Advantages and Disadvantages)

Develop Trust

We are living in the world of the internet and digitalization. Marketers and advertisers are bombarding our minds with advertisements all the time like on the bus station, TV, web applications, browsers, etc. In short, you see ads for various products all the time intentionally and unintentionally. WOM marketing develops trust among customers and they would trust the referrals and recommendations of their trusted source, rather than being skeptical about it.

Brand Awareness

WOM marketing doesn’t stop when a person refers a product or service to their friends and social circle. Rather they would share it with their friends and acquaintances if they like the product or service, and it would keep on spreading the brand awareness of your business. (Word of Mouth Marketing Advantages and Disadvantages)

High Sales

One of the common reasons that attract the attention of customers is the low price. If customers are doing WOM marketing of your product or service due to low price, then it would spread even faster and amplify the sale to a great extent. However, it would mean more revenue and sale for your company. It happens because people trust the source of reference that is recommending the product or service.

Short Term Scalability

The most important benefit of WOM is that it offers scalability in a short time and gives you immediate results. You can launch your WOM marketing campaign, and then you can see its results whether it is increasing the conversion rate or not. It means if you produce something valuable and interesting, then people would keep on sharing it and recommending it. It would amplify your growth and allow you to approach more people.

Word of Mouth Marketing Disadvantages 

Some of the cons and disadvantages of word-of-mouth marketing are as follows;

Uncontrollable

The thing about a WOM marketing campaign is that it is out of your controllable, you can stop people from saying things about your brand or product. They say good things or bad things about your product or service, and share it with their friends and social circle. However, you don’t have control over the views and opinions of other people and why they say things. (Word of Mouth Marketing Advantages and Disadvantages)

Double-Edged Sword

WOM marketing is like a double-edged sword and it can work both, it works both ways. It could either boost your brand and promote your products, or jeopardize the growth of your business if they say negative things. However, your competitors could spread false rumors about your brand or product, and they aren’t good for the growth of your business.

No Exact Metrics

WOM marketing doesn’t offer you any type of exact metrics and KPIs to measure the performance and growth of your business and conversion rate. You don’t have sufficient data to make improvements in your current marketing strategy or remarket things. (Word of Mouth Marketing Advantages and Disadvantages)

Low Coverage

The other flaw of the WOM marketing campaign is that you can’t approach the global audience with it. It would only allow you to approach the local audience of a few regions, and its coverage rate is very low. However, you don’t know for sure whether people would share your product and service experience with friends or not. (Word of Mouth Marketing Advantages and Disadvantages)

Bad Press

If negative reviews and bad referrals and fake memes start spreading over social media, they would like a spark on the haystack and jeopardize your entire marketing effort. It is important to keep in mind that false rumors spread faster than good recommendations.

Employee Opposition

If the employees of the company aren’t happy and satisfied with their paychecks, working conditions, and holiday plans, then they would go on strike and share their experiences on social media. Such types of news and reports would push away from your brand because you aren’t treating your employees fairly.  

Conclusion: Word of Mouth Marketing Advantages and Disadvantages 

After an in-depth study of the word of mouth marketing advantages and disadvantages; we have realized that WOM marketing is highly beneficial for your business. If you’re running a WOM campaign for your business, then you should keep in mind its pros and cons.

Advantages and disadvantages of word-of-mouth marketing

This article aims to identify some of the advantages and disadvantages of word-of-mouth marketing. It also explores the definitions of word-of-mouth marketing and provides the readers with a comprehensive insight into the topic.

Definitions of word-of-mouth marketing

According to Kotler et al. (2009) word-of-mouth (WOM) is an interpersonal communication of products and services where the receiver regards the communicator as impartial.

According to the Cambridge dictionary (2021) word-of-mouth (WOM) refers to people talking about something or telling people about something.

The idea of word-of-mouth has changed over the years. The traditional method that relied on spreading a message orally from one person to another, has been largely replaced with targeted efforts using social media. In fact, social media have unleashed the power of word-of-mouth marketing.

Advantages of word-of-mouth marketing

Word-of-mouth has a number of advantages and can be an important part of an integrated marketing communications. It can work alone; however, it often performs best in association with the other promotional techniques such as advertising and sales promotion.

According to Nielsen (n.d.) cited in Whitler (2014) 92% of consumers believe word-of-mouth i.e. recommendations from friends and family over all other forms of advertising. Most of the marketing executives also consider it as the most effective form of marketing. When real customers give positive feedback about a product/service, it becomes more trustworthy. The unbiased positive feedback can help persuade potential customers to consider a brand positively.

Word-of-mouth is very good for creating brand awareness. When someone shares something with a friend or a family member, there is a strong possibility that that person will share the information with others as well. Especially, at a time of social media, if something goes viral, it works like a magic and creates massive brand awareness even though the conversations are not translated into purchases.

One of the biggest advantages of word-of-mouth marketing is the affordable cost. It is usually cheaper than other types of marketing. As it is an oral communication, it does require pens, papers, computer systems, or any other supplies resulting in a bit of saving for companies.

According to Kotler et al. (2009) a key aspect of social networks is word-of-mouth. More and more companies are becoming aware of its power. It is virtually impossible to find a company now-a-days not using social media to spread positive word-of-mouth.

Disadvantages of word-of-mouth marketing

One of the biggest disadvantages of word-of mouth marketing is the limited coverage. A satisfied customer may tell a friend or even two about a product/service who then may purchase and use the product/service and share the experience with others. This type of marketing is usually limited to family and friends and can take longer to spread the message than other forms of advertising. Therefore, organisations need to use social media to make the best use of word-of-mouth marketing.

Limited control over the message is a problem in word-of-mouth marketing. There will always be some people who will complaint about a company and share their frustrations online and offline. It only takes a few outspoken dissatisfied customers to create negative brand images which is damaging for a company.

Word-of-mouth marketing strategies

Harrison (2019) proposed three effective word-of-mouth marketing strategies i.e. 1. Encouraging user-generated content, 2. Adding testimonials and reviews, and 3. Creating sharing incentives.

Most people now-a-days love to share things. Therefore, if organisations can make their customers satisfied and provide them with good reasons and ways, they would not hesitate to share their experience with others. It is worth noting that most if not all organisations today apply targeted efforts to encourage satisfied customers to share their satisfaction with others.

Examples of word-of-mouth marketing strategies

1.Some telecommunications companies offer their customers discounts on their bills if a new customer signs up based on their recommendations.

2. ‘The Scarecrow’ – Chipotle’s emotionally powerful video to encourage word-of-mouth.

3. Since its inception, Starbucks has been focusing on creating unique experience for its customers to encourage them to share their positive brand experience with others. No wonder why people keep on coming back to it even though its products are expensive.

4. McDonalds made use of word-of-mouth marketing very convincingly in China. For instance, in 2010, it offered customers to purchase McSpicy Wings at a discount rate with discount coupons from any restaurant in the country. It promised to give out free chicken wings at seven of its restaurants if one million customers shared the storey of McSpicy Wings online. Interestingly, within four weeks, McDonald’s achieved the target with pledges from over two million people (Magni and Atsmon, 2010).

We hope the article ‘Advantages and disadvantages of word-of-mouth marketing’ has been helpful. Hope the definitions of word-of-mouth marketing are clear to you. You may also like reading Personal selling – definition and examples. Other relevant articles for you are:

Advantages and disadvantages of branding

Advantages and disadvantages of franchising

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Last update: 30 March 2021

References:

Cambridge Dictionary (2021) Word-of-mouth, available at: https://dictionary.cambridge.org/dictionary/english/word-of-mouth (accessed 30 March 2021)

Harrison, K. (2019) 3 Powerful Word-Of-Mouth Marketing Strategies That Can Help Your Small Business Grow Faster In 2019, available at: https://www.forbes.com/sites/kateharrison/2018/12/30/3-powerful-word-of-mouth-marketing-strategies-that-can-help-your-small-business-grow-faster-in-2019/?sh=5b3ace5c2420 (accessed 30 March 2021)

Kotler, P., Keller, K., Brady, M., Goodman, M., and Hansen, T., (2009) Marketing Management, 1st European Edition, England: Pearson Education Limited

Magni, M. and Atsmon, Y. (2010) The Power of Word-of-Mouth in China, available at: https://hbr.org/2010/04/the-power-of-word-of-mouth-in (accessed 30 March 2021)

Whitler, K. (2014) Why Word Of Mouth Marketing Is The Most Important Social Media, available at: https://www.forbes.com/sites/kimberlywhitler/2014/07/17/why-word-of-mouth-marketing-is-the-most-important-social-media/?sh=31e739c154a8 (accessed 29 March 2021)