Word-of-mouth marketing: Does it still work in the digital age?

Imagine this: You’re ready to have your kitchen renovated. You’ve been meaning to get it done for years, and you can finally afford it. Now it’s time to find a contractor to do the job.

What’s your first step? 

Will you start with a Google search? Will you call that number on the billboard you saw? Or, will you talk to your neighbor about who she used for her renovations?

Even in 2020, word-of-mouth advertising is the first choice for many when evaluating businesses. The reason is obvious. We trust people we know. By extension, we want to trust whom they trust. If they had a good experience with a business, we are more likely to view that business favorably.  

According to a massive study by Nielson done a few years ago, 92% of customers trust “word-of-mouth or recommendations from friends and family, above all other forms of advertising.”

With all of this in mind, I sat with digital marketing expert Marcus Sheridan to talk about how word-of-mouth marketing has changed in the digital age.

Why is word-of-mouth marketing still important today? (Or is it?)

John Becker: Companies of all types have relied on word-of-mouth marketing since commerce began. Why is word-of-mouth so important?

Marcus Sheridan: One thing that has never subsided, despite what's happening with digital, is our reliance on others for information about products, services, and companies. For the things that we're interested in, we prefer to ask our friends. And if we can't ask our friends, we want to ask unbiased users of that product, service, or company, and learn from them. 

If there's a chain of trust, we trust our friends first, we trust buyers second, and we trust companies third.

Sometimes, when researching a company, we’ll go straight to a search engine. Imagine, say, that you’ve just moved to a new town and don’t have anyone to ask. Most often, though, it’s a combination. You might get a recommendation from a friend for a particular company, and then, just to confirm the recommendation, you’ll go and vet the company online. But we prefer to get our recommendations word-of-mouth.

The best book I read on this recently was Talk Triggers by Jay Baer. A “talk trigger” is anything that a company does that makes people in the marketplace talk about that company. Now, this could be any number of things. Most important, to me, is providing a great experience for a customer. 

Happy customers talk, and so do dissatisfied customers.

In a bigger sense, companies can trigger discussion by having a great website or establishing themselves as thought leaders. 

If you can help steer the discussions that are already happening in your industry, that’s a talk trigger, too. And, if you’re publishing this thought leadership, people start linking and backlinking to your work, so you are at the center of a conversation.

Yes, digital "word-of-mouth" marketing matters

JB: According to Brightlocal, “91% of 18-34 year old consumers trust online reviews as much as personal recommendations.”  Are online reviews the closest thing to word-of-mouth marketing in the digital space?

MS: Yes. In the absence of personal recommendations, we go to websites to seek reviews. Honestly, we frequently trust online reviews more than word-of-mouth recommendations. Think about Yelp, which is by far the most important marketing tool for restaurants in the world in 2020.

Yelp is the vehicle that carries word-of-mouth. It's where people can not just share with their friends, they can share with the world. I look at Yelp for probably 90% of the meals that I eat on the road, so Yelp dictates a big part of my diet. 

In the moment that I am choosing to visit a restaurant because of the reviews, Yelp has become in that moment not just a customer experience or service tool, but an essential marketing tool. 

Even if a restaurant was recommended highly, what happens if I look at Yelp and find there are only three stars, with a lot of reviews? I think, this place is really not worth the risk. Once again, Yelp becomes a marketing tool at that point. I will choose to go elsewhere.

I believe it was also Jay Baer who said “customer service is the new marketing,” and I think that’s absolutely right. Yelp proves it.

Businesses continually need to be providing a good experience to customers. Remember, they are not only rating your product or service, they’re rating the whole experience, from end to end. 

...especially negative "word-of-mouth" reviews

JB: According to a huge 2017 study done by Power Reviews, people find longer reviews and 1-star reviews to be the most helpful. Does that surprise you?

MS: When people are making buying decisions, they want to feel satiated and informed, and that absolutely applies to reviews. In They Ask, You Answer we identify the most important content people want to see before they make a purchasing decision. A huge focus of customers is on potential problems.

When we are close to buying something, we tend to research negatives much more than positives. If we're starting to get pretty serious about a purchase, the next thought becomes, well, if I do buy that or if I do use them or if I do eat at their restaurant, how could this go wrong? When we research problems or 1-star reviews, we're really assessing risk. 

I use Airbnb for any family vacation we go on, and I read almost every review. I'm always more curious about the ones where it went wrong. I'm also more focused on the reviews that say more because you get a much greater sense for the why behind the review. If a review is just, “we had a great experience, we highly recommend it.” It doesn't help you at all. The beauty and the value is in the details.

It all goes back to everyone being risk-averse. We hate surprises, so we want to know the good, the bad, and the ugly. And this is why review sites still have so much importance. 

How companies should approach their word-of-mouth marketing today

JB: How can companies work to cultivate and promote their word-of-mouth marketing? 

MS: First, ask yourself what really makes you different. If someone were to say, “aren't they the company that...fill in the blank?” If you don’t have anything to fill in that blank, you don't have that talk trigger. So for example, with [my company] River Pools, someone might say, isn't that that company has an unbelievable website that answers all the questions? Yeah, that's River Pools. That’s a talk trigger. 

Now, you can't have generic ones. “Isn't that the company that gives great service?”  Nobody says that. That's not a specific trigger. So, what is the thing that people talk about that is shareable, that spreads? 

Second, you don't want to ignore your reviews. Again, Jay Baer talks about this in a book called Hug Your Haters, which is about handling online reviews.

All of his studies found the same thing. People who leave negative, scathing online reviews — they aren’t always seeking a resolution. They often just want to feel like a business has heard their complaint. And so, if you quickly acknowledge their complaint, more than 50% of the time you've already won the battle. That's all they needed. 

The worst thing you can do is ignore them. A negative review is a chance to win back a customer and to examine your own business as you seek improvement.

If you get a negative review, how can you turn it into a positive? Well, instead of defending yourself, you show gratitude, you try to make it right. You respond, “Hey, here's what we've changed since then and this is what we're really excited about. We wish everybody was as honest as you!” 

One of the best examples I've ever seen of this is Domino’s Pizza. For years Domino’s was known for having crappy pizza, and they came out and they said, “we did a bunch of studies and you all said that our pizza was terrible. And so, we've listened and this is how we've changed.” 

That was amazing because they acknowledged the marketplace. That got everybody talking about Domino's again. They embrace a They Ask, You Answer mindset. This was very transparent. “You said it. We answered it.” To this day, Domino's business has just absolutely changed. It's like night and day from what it was five years ago. And it started with this campaign of honesty about their shortcomings.

JB: In my experience, when companies do engage with negative reviews, they render the online space way more human. People will be much less vindictive if someone's like, “Hey, sorry you had a bad experience, come on back in.” Or, “we're, we're working on that.” Suddenly they realize that they're not just shouting into the void — that there is a person on the other end.

MS: Absolutely. The humanization of business is going to make a dramatic comeback. That’s part of why They Ask, You Answer resonated with so many people. Transparency is humble. It’s a mindset of “That's what I would want to know if I were a buyer.” 

The golden rule is real. It works. And if that's not humanizing, I don't know what is.

Image courtesy of Connecticut Headshots.