In a new study from Jay Baer and Daniel Lemin, posted by Ted Kitterman, 83% of respondents say word-of-mouth influences their purchases, and that personal connections matter more than ever when getting a product recommendation. When selecting a new product or service, many consumers look for an indicator that their transaction will be safe and satisfactory, and younger consumers value recommendations from friends and family to inform their decisions, says the report.
Younger consumers are almost as likely to recommend your product because they have heard good things about it, rather than waiting for a personal experience with your organization, says the report. Although 48% of Gen Z respondents would recommend a product after a positive personal experience, 30% would make the recommendation based solely on overheard praise. Older consumers are more discerning. For millennials, 23% would praise a product or service based on hearsay, and only 16% of Gen X respondents would make a similar recommendation. For Baby Boomers, the percentage drops to 13%.
Though internet search ranks as the most popular source for researching a product, family and friends follow close behind as important sources of information. 46% of respondents say family members are a resource when researching a potential purchase, and 45% say friends are important. Women rely on word-of-mouth recommendations 22% more than do men, says the report.
However, the study suggests word-of-mouth publicity is a ubiquitous phenomenon, with 83% of respondents having made a recommendation to a friend or family member, and 55% making a recommendation at least once a month. However, younger consumers are more likely to engage in this behavior, with 77% reporting they make a recommendation at least once a month.
One thing word-of-mouth can provide, that few other messaging options can match, is a level of trust, says the report. Trust in corporations and public institutions has taken an unprecedented hit in recent years. As advertising efficacy wanes, and the media landscape continues to reshape how consumers find new products, most people still follow recommendations from good ol’ mom. And, despite the explosion of influencer marketing, the study states that 25% of Americans don’t trust celebrities or other famous figures to recommend products. Some big names have pull, including Oprah Winfrey, Barack Obama, Beyoncé and Ellen DeGeneres.
The study also considered the impact of age on word-of-mouth trust, and a very clear “trust cycle” pattern emerged. Up to approximately age 40, Americans trust people their parents’ age and older. Once consumers cross that 40-year-old barrier, they begin to trust people their own age. This lasts until approximately the age of 60, when consumers begin to also trust the opinions of people who are the age of their children.
The study ranks in importance the weight of different kinds of consumer experience have on a purchase, from personal experience and the recommendation of a close friend, to posts by the brand on social media and other, less personal channels. And, personal experience with a brand was the most important, followed closely by brand familiarity, family recommendations and online reviews. At the bottom of the scale are social media posts from brands and posts by friends on social media.
The study concludes that word-of-mouth is directly responsible for 19% of all purchases, and influences as much as 90%, and that businesses should take online reviews more seriously. Every human on earth relies on word-of-mouth to make buying decisions. Yet even today, fewer than 1% of companies have an actual strategy for generating these crucial customer conversations, concludes the report.