In today’s digital age, where information travels at the speed of light and we are bombarded with ads and online reviews, the value of genuine word of mouth recommendations is incredibly significant for Customer advocacy. These personal endorsements from friends and family have always played a crucial role in shaping Customer decisions, but even more so now. Recent Australian statistics and scientific insights highlight the power of ‘word of mouth’ and the fact it is most definitely here to stay and something not to overlook in your business.
Recent Statistics Around Word of Mouth and Customer Advocacy
Before we get into the science behind word of mouth recommendations, let’s take a look at some recent statistics that will help us understand the significance:
- Trustworthiness: According to the 2021 Edelman Trust Barometer, 61% of Australians trust recommendations from family and friends more than any other source of information, including online search engines, news outlets, or social media influencers.
- Buying Influence: A 2020 report by Roy Morgan revealed that 61% of Australians stated that word of mouth recommendations influenced their purchase decisions, making it the most influential factor, even ahead of online reviews and advertising.
- Customer Loyalty: Australian consumers are more likely to become loyal Customers after receiving a positive word of mouth recommendation. A study by Nielsen found that 92% of Australians trust recommendations from people they know, and this trust can lead to long-term Customer loyalty.
- Referral Programs: Organisations in Australia are increasingly recognizing the power of word of mouth. In fact, 69% of Australian businesses have a referral program in place, according to a report by Mention Me.
These statistics demonstrate that word of mouth recommendations play a significant part in Customers’ choices and can greatly impact Customer Advocacy and therefore the success of your business. So, what actually motivates people to advocate for products or services, and how does this process work inside our brain?
The Science Behind Customer Advocacy
To understand how Customer advocacy works, let’s have a look at the fundamental principles that drive people to recommend products or services to others. Several psychological and neuroscientific factors come into play:
- Social Status: Human beings are inherently social creatures. Recommending a product or service can enhance one’s social status and provide a sense of belonging to a particular community. This is a powerful motivator for word of mouth recommendations.
- Emotional Connection: People are more likely to advocate for something they feel emotionally connected to. Products or services that evoke positive emotions like happiness, delight or excitement are more likely to be recommended.
- Reciprocity: Humans have a tendency to feel that it is necessary to repay or reciprocate. When someone receives a helpful recommendation, they often feel a sense of obligation to reciprocate by providing recommendations of their own.
- Neurological Reward System: When individuals share positive experiences or recommendations, their brains release neurotransmitters like dopamine, creating a sense of pleasure and delight. This neurological reward system reinforces the behaviour of advocacy.
- Trust and Authenticity: Trust plays a crucial role in word of mouth recommendations. People are more likely to trust recommendations from friends and family because of pre-existing trust in these relationships. Authenticity in advocacy is key to building and maintaining this trust.
- Confirmation Bias: People tend to seek out information that confirms their existing beliefs and preferences. Positive word of mouth recommendations align with this cognitive bias and can reinforce their choices.
Understanding these psychological and neurological factors can help your business create Customer experiences that not only get your Customers to come back but also motivate them to become advocates. By aligning your products or services with these motivators, you can tap into this incredible potential of word of mouth recommendations.
The Reach of Word of Mouth Recommendations
Word of mouth recommendations are not limited to a small circle of friends and family; they can actually have a far-reaching impact:
- Through Social Media: Online, word of mouth has evolved way beyond face-to-face interactions. Social media platforms provide a powerful medium for sharing recommendations, and a single endorsement can reach hundreds or even thousands of people instantly.
- Online Reviews and Communities: Online review platforms, like Tripadvisor, and specialised communities have become hubs for word of mouth recommendations. These platforms allow individuals to share their experiences with a global audience.
- Influencer Marketing: Influencers, who often gain their following through authentic word of mouth, have become a popular avenue for businesses to leverage the power of recommendations. These influencers have built trust and credibility among their followers, making their endorsements highly effective.
- Referral Programs: Many businesses in Australia have recognised the potential of word of mouth and have implemented referral programs to encourage their Customers to advocate for their products or services. These programs incentivise customers to share their positive experiences. Whether these are truly authentic reviews or not, remains questionable. But nevertheless powerful.
Basically, word of mouth recommendations have the potential to go beyond geographical boundaries and influence a huge audience. They are not just conversations; they are influential marketing tools that can shape the entire Customer journey.
The Role of Word of Mouth in the Customer Journey
Understanding the Customer journey is crucial for your business if you are looking to make effective use of word of mouth recommendations. Here’s how they fit into the Customer life cycle stages of the Customer journey:
- Awareness: Word of mouth can introduce a brand or product to potential Customers. When people hear about a product or service from trusted sources, it ignites their curiosity and prompts them to explore further.
- Consideration: As people research their options, they are more likely to favour products or services that have been positively recommended by friends or family. These recommendations can significantly influence their decision-making process.
- Purchase: Positive word of mouth can be the final push that convinces a potential Customer to make a purchase. The trust established through word of mouth can help overcome any remaining hesitations.
- Post-Purchase/ Service: Word of mouth recommendations don’t stop at the point of purchase. They continue to play a role in shaping the Customer experience. Happy Customers are more likely to become advocates, and their recommendations can lead to repeat business and referrals. At the same time, bad word of mouth at this stage can still influence a Customer to stop using a product or service.
- Loyalty: Building Customer loyalty is a key goal for businesses. Word of mouth recommendations from loyal Customers can help create a community of brand advocates who not only purchase regularly but also actively promote the brand.
In conclusion, word of mouth recommendations are a powerful force in the business landscape. Recent statistics highlight their significance, and the science behind Customer advocacy tells us about the underlying motivators that drive people to recommend products and services. Understanding the reach of word of mouth and its role in the Customer journey is absolutely essential for businesses seeking to leverage this incredible marketing tool. By delivering positive Customer experiences and building trust, your business can tap into the huge potential of word of mouth recommendations to drive growth, build Customer loyalty, and shape your success in today’s competitive marketplace.
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