Sales Strategy

Harnessing Word of Mouth Marketing: Key Statistics and Trends for 2023 July 16, 2023 (0 comments)

New York, NY--The power of word-of-mouth marketing (WOMM) is demonstrated by its contribution to the $6 trillion of annual consumer spending, representing 13% of all sales, according to a report. As an age-old concept, WOMM thrives on the principle of social proof, a psychological phenomenon where individuals base their choices on the observed behaviors of others.

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According to a report by LXA Hub, this mental shortcut is a double-edged sword for marketers. While positive WOMM can boost a brand, negative reactions can seriously harm its reputation. Brands must instill an emotional connection with their audience, as such brands receive three times more WOMM than their less emotive counterparts.

Given this, brands are increasingly leveraging influencers to emulate trusted recommendations. A Nielsen report states that 92% of consumers trust suggestions from friends and family over advertisements. Furthermore, 88% of consumers value online reviews, confirming the high degree of trust in WOMM.

Google has registered a staggering 1500% increase in "influencer marketing" search queries over the last three years. Influencer marketing has proven effective, with 63% of consumers aged 18-34 trusting influencer-brand endorsements more than the brands' advertisements. Consequently, companies are increasingly allocating their marketing budget toward influencer campaigns.

As per the report, in terms of return on investment, 74% of consumers view WOMM as a key factor in their purchasing decisions. WOMM carries significant weight in driving sales. Similarly, in B2B scenarios, colleagues' recommendations highly influence software purchases.

Brand loyalty is also tightly bound to WOMM, with a 5% increase in customer retention, potentially boosting a company's profitability by 75%. Word of mouth also plays a pivotal role in brand discovery, especially among millennials who rely heavily on friends and family recommendations.

The report highlighted that many marketers still aim to enhance their offline WOMM strategies in the face of burgeoning online marketing. Negative reviews, though less common, can be highly detrimental to a brand, as unhappy customers tend to share their negative experiences more widely than satisfied ones. Therefore, brands should proactively manage customer experiences to limit the spread of negative WOMM.

Learn more in the entire LXA Hub report.