Why Word Of Mouth Is So Effective

Mar 9, 2020

Two women shopping shopping togetherWhen it comes to growing your business, what worked for advertisers five years ago does not have the same effect today. For example, social media marketing platforms are so inundated with paid advertisements that users are conditioned to ignore them completely. 

Instead of spending more and more on the same ad channels to be competitive, marketers everywhere are shifting resources to building relationships with their customers. Why? Because it’s incredibly effective as a marketing tool.

When a business builds valuable relationships with its customers they become engaged and invested in your brand. When someone becomes invested in your brand, they promote your business for you via word of mouth. 

But does it work as a marketing tool? The answer is yes. Here are some of the top reasons that make word of mouth marketing so effective.

Grows Your Brand Awareness

You know there’s a need for your product or service, but how do you get your business in front of your target audience? Relationship marketing and word of mouth can help. 

People are looking for credibility and social proof before spending money with a business, so many times they’re more likely to learn about you from reviews or their network than if they started the search on their own.

Improves Brand Equity

Brand equity is the value of your brand from the audience’s perspective rather than by the product or service. An example would be why users are more likely to buy a product from Amazon than from a new eCommerce store. 

Word of mouth builds brand equity. When someone you trust is endorsing a brand, you’re more likely to perceive the brand with value than if you come across it just by seeing an ad. Getting people talking about your business gives your brand more perceived value. 

Gain More Trust

Recommendations made by friends or family are super persuasive. According to Invesp, people are 90% more likely to trust a recommendation coming from a friend. 

Building a community of brand advocates and providing them with a platform to talk about your business makes you a credible provider in your market. This is why referral marketing programs are so successful at driving leads that are genuinely interested in your business.

Makes You More Money

We’ve been hearing for years that it’s more expensive to acquire a new customer than to keep an existing one. Providing stellar customer service creates those wow-worthy moments that get people talking about you.  

Not only does word of mouth drive more qualified leads to your business, but those leads make you more money. Referred customers have a lifetime value that’s 16% higher than non-referred customers.


Businesses everywhere are allocating resources to relationship marketing in addition to traditional marketing and advertising efforts. That’s because providing your customers with a personalized experience and top-notch customer service is a guaranteed way to get them talking about your business.

While establishing word of mouth is a long-term gain, it’s well worth the investment. Word of mouth gives your business more exposure, credibility and perceived value. When your audience trusts your brand, they’re more likely to choose you, spend more money and stay for a lifetime. 

 

Pulkit Bhardwaj is a writer for ReferralCandy and CandyBar

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