It’s hard not to be impressed when you hear someone grew their business via word-of-mouth. After all, if a company can rely solely on customer recommendations to sustain or even scale, that’s a clear indicator its product or service is pretty damn good.
But while word-of-mouth marketing can be effective (and also usually cheap, or even free), it has its limits. Sure, it may help an entrepreneur launch their practice or earn a small retailer those crucial first sales, but it’s unlikely this tactic alone will provide the reliable, sustainable stream of business established organizations need to generate consistent revenue.
But this doesn’t mean you should trash your word-of-mouth marketing strategy altogether (especially if it’s driving results). Instead, it’s important to understand when word-of-mouth alone is least effective and how you can boost your business results by including it among a more holistic strategy. Before we delve into why (and when) word-of-mouth marketing isn’t always enough, let’s cover a few basics.
Word-of-mouth marketing refers to any type of recommendation a satisfied customer provides to a prospective customer. This can be written (an online review) or oral (a casual conversation).
Because buyers are more likely to trust other buyer experiences than messages shared by a company, word-of-mouth is one of the most useful tools for establishing credibility and growing brand recognition.
Here are a few examples of word-of-mouth marketing:
Keep in mind, the active ingredient in word-of-mouth marketing’s success is authenticity. For example, a shocking 91 percent of 18- to 34-year-olds and 79 percent of 35- to 54-year-olds trust online reviews as much as personal recommendations, according to data from BrightLocal. But as soon as it’s obvious a reviewer was paid for their feedback, trust levels begin to dip.
Word-of-mouth has plenty of benefits and is an essential part of a comprehensive marketing strategy. But it also has a few disadvantages, which is why it often performs best in conjunction with other efforts.
Here are a few common drawbacks:
It can take a long time.
Successful marketing requires the right message in the right place at the right time. While word-of-mouth marketing might tick the boxes for “right message” and “right place,” its timing isn’t always best.
Take, for example, an HR professional telling another HR professional about their positive experience using new workforce management software. While the second person may be interested in learning about the product, or even in the market for a new solution, it could be several months before they finally get around to following their colleague’s recommendation — if at all.
It limits your reach.
How many existing happy customers do you have? How many of those customers would be willing to review your product or service, or tell their friends about the success they’ve experienced with your business? And how many of those word-of-mouth marketing interactions will drive prospects to your organization? And how many of those leads will actually convert?
While it’s almost impossible to earn a conversion rate of 100 percent through any single marketing tactic, it’s especially tricky with word-of-mouth marketing. You’ll always be limited to the number of satisfied customers willing to evangelize your offering.
It can spread misinformation.
A simple mention of the term “negative online reviews” can send some business owners into a full-blown anxiety attack. While everyone wants more reviews, nobody wants to deal with the bad ones. And the only thing worse than a bad review is an untruthful one.
Word-of-mouth marketing can trigger a release of inaccurate information that’s misleading at best and reputation-damaging at worst. Of course, you can respond to reviews, flag inaccurate or offensive content and do your best to boost your reputation through other means. But if you’re relying solely on word-of-mouth marketing and then something goes amiss, you’ll be in a tight spot.
It isn’t targeted.
A positive review may go semi-viral, earning you plenty of incoming traffic from highly qualified buyers, or it might land on deaf ears. A recommendation might reach precisely the sorts of buyers most likely to benefit from your product or service, or it might be shared to a network of people in an entirely different role or industry than your ideal buyers. There’s really no way of knowing.
While word-of-mouth marketing can help spread your brand name around, where it’s shared and who hears the message is largely out of your control. This sometimes results in unqualified leads and lengthy periods of radio silence.
It’s difficult to measure.
You can usually measure the effectiveness of online reviews and recommendations through analytics. Many third-party review sites give businesses access to an internal dashboard and, even if they don’t, you can check your referral sources through your marketing automation software to determine what’s driving traffic and leads.
But when it comes to tracking word-of-mouth marketing offline, it’s pretty much impossible to quantify. You can’t be everywhere everyone is talking about you, no matter how hard you try.
Here are a few scenarios when word-of-mouth marketing alone isn’t recommended.
Once you’ve achieved a certain level of brand recognition, word-of-mouth may get your name on the short list, but it won’t make the sale. In this case, you need to delve into multichannel efforts that can help amplify the movement your word-of-mouth efforts began.
As previously mentioned, seeing results from word-of-mouth marketing can take a long time. And if your business is in a position where you need to increase deal velocity, word-of-mouth efforts alone aren’t going to get you the outcome you need. Instead, you need to make sure your prospects are hearing the right messages at the right times to keep them moving (quickly) through the buyer’s journey.
If senior stakeholders are bearing down and demanding results, it’s not the time to experiment with only using word-of-mouth efforts — especially since they can be so challenging to measure. Instead, it’s critical you stick to initiatives you can monitor closely for the sake of performance management as well as reporting.
If you’re attempting to break into a new sector, you may not have enough relevant customers to make a word-of-mouth campaign worth your time. While having existing clients share their success stories can be helpful when trying to stake a claim in a new market, you need to ensure you’re also creating highly targeted content tailored to the new decision-makers you’re hoping to reach.
If your offering is complicated to explain, you can bet your customers aren’t doing it justice. While their pure delight may be enough to drive someone to check out your product or service, you need to spread plenty of factual, educational messages about your product to help counteract any misinformation.
Word-of-mouth marketing can be wildly powerful and is one of the most useful tools for organizations of all sizes that want to increase brand authenticity and earn prospects’ trust. However, this tactic alone is rarely enough to drive consistent qualified leads and keep your business steady and growing. By understanding the limits of word-of-mouth efforts and identifying how to build it into a larger, more holistic strategy, you’ll be well-positioned to meet your goals.