How important is 'word of mouth' marketing?

Martin from Word of Mouth Marketing Australia has dropped into BizHub to give us the inside facts about word of mouth marketing.

What is word of mouth marketing and why is it important?

First of all, word of mouth marketing is when a friend, family or colleague recommends a business to another person.

Have you asked your customers how they heard about your business? Quite often, especially service-based businesses, it is through a friend.

Which works better - ads or word of mouth?

Think about the services you currently use - your hairdresser, dentist, accountant, plumber, favourite restaurant. Did you see an advertisement about it or was it recommended to you?

Relationships are built on trust, so it is not surprising that we'd trust our friend's opinions and personal recommendations over an advert.

Recommendations also tend to come from people who have used your product or service. They are also more believable over other forms of marketing because people speak about their 'own experience'. Marketers tend to speak about what they perceive people want to hear. Users tell it how it is.

The stats say that 90% of customers prefer word of mouth over any other form of marketing for information on products services or ideas. 14% of people trust advertisers - not a great figure if you advertise.

Why word of mouth works

Word of mouth is effective because:

  • It is based on personal recommendation
  • It is the most powerful and cost effective form of marketing
  • It is honest, reliable and free
  • It is based on the users experience of the service or product
  • It is in customer speak
  • It provides a solution to the customers real need not our perception of their need

Ask for feedback

Asking for customer feedback is something all businesses should do to improve their customer service and business.

Asking them face to face and writing it down has the most impact.

You should find out the good, the bad and if there are any opportunities.

Some examples of questions to ask them are:

  • What did we do well?
  • Where could we improve?
  • What could we provide to make your life easier?

Feedback can assist with business improvements and if you gain permission they can be used as customer testimonials.

Meet the business

Word of Mouth Marketing Australia helps businesses develop practical strategies to encompass word of mouth marketing in their marketing plan. 

Visit to find out more.