Is Word-of-Mouth More Important than Advertising?

 “Mad Men” popularized the glory days of advertising which dominated marketing 101 for decades.  In the world of customer advocacy, digital marketing and social media, does advertising have the same clout as “Word-of-Mouth” marketing? 

This is a serious question for every corporation – as they determine the budgets allocated to different marketing programs.  Which will have the impact we need?  What will the ROI be for each effort?  Where should the “next dollar” of promotion go?

Customer Insight – the key to understanding marketing program influence and impact

A global CPG company selling through traditional channels – big box stores, grocery stores and home improvement stores – wanted to rebalance their promotional mix to the highest ROI and wanted customer input in the process.  As a result, a blend of qualitative research and quantitative research was mobilized to capture the preference, influence and impact of various promotional efforts on customer repurchase and non-customer consideration and selection of the products in their category. 

Shoppers and customers were interviewed, videotaped and surveyed across dozens of store locations in a national research effort.  What they found was incredibly insightful and transformational for their business. 

• Customers trusted word-of-mouth more than advertising – by a 2-to-1 margin
  • 50% of shoppers had a “high degree of trust” in recommendations from friends and family – but only 24% from retail associates or brand advertising
• “Word-of-Mouth” was used 1.5 times more than advertising or price promotions/coupons
  • 41% of shoppers received information from friends and family – compared to 23% from brand advertising and 29% from price promotions/coupons
• A small investment in capturing and amplifying satisfied customer testimonials and feedback had a measurable lift in brand awareness, preference and selection – that showed up on retail shelves within weeks.
  • Customer testimonials created a refreshed digital content library of verbatim comments and videos that were leveraged for online user communities, facebook sites, twitter feeds, amazon site user reviews and website content that improved search results and awareness.

Call 1-800-549-7170 or send an email to nitin@goldresearchinc.com  for a free consultation on this topic.

Gold Research is an award-winning Customer Journey Management firm with extensive experiences in B2C and B2B journey mapping, path-to-purchase research with a special focus in deploying “real-time” and behavioral/neuroscience research formats to gather in-the-moment customer insights.