Research shows word-of-mouth marketing is more effective than online advertising

Companies today are spending a larger portion of their marketing budget on online advertising, taking advantage of social media and the increasing number of internet users. From content marketing to email marketing campaigns, brands have found numerous ways to reach consumers and spread their messages across the web. While these efforts are worth making, it’s important that brands don’t lose sight of the overall picture and remember that offline interactions are necessary, too. In fact, word-of-mouth conversations between family members, friends, co-workers and acquaintances are actually more effective than online advertising, according to a recent study led by SDSU Marketing Professor Dr. Andrew Baker, as published in the Journal of Marketing Research.

“Even with the billions of dollars spent each month on online advertising, blogging and other internet messaging, our findings indicate that direct conversation has the greatest impact on influencing intentions to purchase a particular brand,” shares Dr. Baker. And these findings make sense when we each consider our own shopping habits. How many times have you questioned reviews found online because you didn’t know the person’s character, interests or values? How many times have you booked an appointment with a certain hair salon or bought a particular product because a close friend you trust recommended it? No matter how good your business is at marketing its brand online, nothing beats old-fashioned, word-of-mouth marketing.

So how does a company increase brand recognition through face-to-face conversation? Along with offering superior products and/or services, of course, these four tactics encourage recommendations among close connections.

Offer a referral discount

Money is a great motivator in almost any situation, including increasing referrals. When you offer a deal that allows existing customers to get great value every time they refer a friend and that gives their friend a discount as well, it’s a win-win-win.

Surprise customers with thoughtful gestures

Standard service is fine, but it’s not what makes a business stand out. Free samples and trial periods that allow customers to try out a product are one way to delight customers and get them talking. Spending quality time with customers who need help picking out a product or have questions is also a simple way to ensure a positive experience.

Listen to complaints and work hard to come up with solutions

Dismissing consumer complaints will get customers talking about your company — but not in a positive manner. Rather than ignoring issues, own up to problems and work with the customer to come up with a satisfying solution. Even if you can’t fix the issue, listening to your customers and taking their complaints seriously at least shows that your business cares.

Continue to treat loyal customers well

It’s easy to spend more time and energy on potential customers, but your existing customers deserve attention, too. Those customers who are familiar with your brand and products recommend them to friends and family. Therefore, ignoring current customers means you’re missing an opportunity to market your brand by word-of-mouth.

Online marketing is an essential form of advertising for most companies, but it shouldn’t be the only form of marketing your company relies on to grow business. Word-of-mouth marketing has proven itself more effective than online marketing. Your company can use the four strategies above to spark conversations and increase customers.