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How Online Reviews Have Changed the Definition of Word of Mouth Marketing

This article discusses the role of word-mouth marketing, the impact of user-generated content, and the customer experience. Then, we’ll focus on customer referrals, online reviews from customers, third-party review websites like, and their effect on sales.


Customer referrals

In the past, word-of-mouth marketing was considered a mysterious, untrackable black box with little to do with business growth. But the word of, mouth marketing can be a powerful data-driven growth lever. And if implemented correctly, it can be the difference between a struggling business and a thriving one. Among other things, referrals are the gold standard of lead generation because they are the most qualified customers and the easiest to sell.

In today’s digital age, a brand can’t rely on traditional word-of-mouth marketing alone. With nearly 240 million people on the U.S. Do Not Call list, it’s not enough to rely on this source to reach potential customers. Customer referral programs are an effective alternative to waiting for prospects. They allow customers to become advocates for your brand, bring new customers, and help customers.

The most effective word-of-mouth examples encourage social sharing by enabling consumers to share your brand’s products and services with friends. Today, personalized codes and URLs make sharing easy and are one-to-one. So when a friend refers someone to a brand they trust, they’re more likely to buy from that company than a brand that doesn’t value their referrals.

The most apparent advantage of word-of-mouth marketing is that it is highly effective, but it’s not expensive. Compared to other marketing strategies, word-of-mouth marketing has little to no upfront cost, whereas advertising can cost hundreds of thousands of dollars. Moreover, it’s easy to measure, unlike traditional forms of marketing. Despite the challenges associated with word-of-mouth marketing, it’s still an effective and affordable option for generating sales.

Customer referrals have made word-of-mouth marketing more effective than ever. Word-of-mouth marketing can spread virally through online platforms and offline recommendations. It’s a proven way to reach a broad audience and build a loyal customer base. In addition to being a cheap and effective way to get more potential customers, word-of-mouth marketing is also free if your business can build a positive reputation through customer referrals. 


Customer experience

In a world where 90% of businesses compete on customer experience, a business needs to know its customers well. Companies can measure their behavior and personalize interactions by building complete customer profiles. A customer’s experience is more important than ever, and the power of word-of-mouth marketing is changing too. Organizations must acknowledge their customers’ needs and be responsive to them, or they will lose them to the competition.

By analyzing the customer experience, companies can make better campaign decisions. They can determine which marketing tactics work best by understanding customer trends and adjusting their strategy to match those trends. Customer experience management aims to improve the customer experience and boost ROI. Ultimately, a business must make the customer experience a memorable one. And by doing that, they can create solid and extraordinary brands.

In the past, word-of-mouth marketing involved satisfied customers recommending a product or brand to friends. The practice of hosting teleconferences, featuring client reviews in catalogs, TV ads, and other outbound methods has decreased. Today, customers increasingly rely on strangers for their pre-purchase advice. This is why a good brand must create a product or service that meets customers’ expectations and is perceived worthy of word-of-mouth marketing.

Fortunately, some companies are paying attention to the quality of customer experiences. Intuit, for example, is using this method to gauge customer satisfaction. It distributes survey results to departments across the company which is working on the next-generation Treo battery. Ultimately, this helps customers decide whether or not they should do business with the company again. However, if a company’s customer experience is subpar, they will regret it. In the worst-case scenario, the customer will decide to shop elsewhere.

Providing customers with an excellent experience is one of the best ways to build a great brand image. If your customer has a great experience, they’re more likely to refer the business to others and may even purchase from you again. Word-of-mouth marketing is among the most influential factors in buying decisions in the digital age. Currently, 84% of consumers trust online reviews over personal recommendations.


User-generated content

In the age of social media, users are increasingly skeptical of traditional advertising and drawn to customer reviews and user-generated content. It is increasingly important to be authentic to appeal to consumers, and a recent study suggests that nearly half of millennials base purchases on recommendations from friends and family. In addition to trusting customer reviews, UGC can increase a brand’s search engine rankings.

The power of user-generated content extends beyond social media and the web. Using consumer-generated content in content marketing campaigns can drastically lower the cost of a campaign, and the brand can invest more of its resources into getting UGC seen by a wider audience. The new phenomenon is making traditional word-of-mouth marketing more effective for B2-B and consumer brands. It is the next level of word-of-mouth marketing, proving to be a considerable force in today’s marketing mix.

UGC can be any type of content created by a consumer, often in the form of a blog post, social media post, or video. It has the advantage of being unbiased and therefore perceived as authentic by consumers. Furthermore, 80% of consumers agree that UGC influences their buying decision more than search results or promotional content. So, what are the benefits of user-generated content?

UGC has the potential to increase sales dramatically. For example, a famous Canadian athleisure brand, LuLuLemon, actively encourages users to post photos on social media and has daily photo challenges where followers are encouraged to post images of themselves wearing LuLuLemon apparel. A successful UGC campaign can also repurpose UGC content from brand ambassadors.

UGC has become a must-have strategy for social media marketers. It has numerous benefits for brands, including increasing social engagement, improving brand awareness, and expanding their reach. For example, video equipment company GoPro relies on user-filmed videos to maintain its YouTube channel. Three of these videos have accumulated over 400 million views. The company can now use user-generated content in its entire marketing strategy.



Impact on sales

Online reviews can have a profound effect on sales. Specifically, they’re the most-trusted method of word-of-mouth marketing. Additionally, spammy reviews may turn customers off. On the other hand, positive reviews increase sales by up to 18 percent. Here’s how they work.

Positive reviews are more prominent than negative ones, influencing customers’ buying decisions. However, consumers tend to ignore reviews with harmful emotional content because they can’t relate to the product. Furthermore, online reviews of luxury goods differ from everyday products. Therefore, it’s essential to consider both positive and negative thoughts in your online marketing strategies. The study also explored how online reviews affect sales revenue. The results were fascinating: an average of 18 percent of the sales increase was achieved by companies that received positive customer reviews.

In addition, positive reviews can increase a brand’s conversion rate by as much as 270%. Likewise, a negative review can influence an average of 35% of potential customers. Nonetheless, 40 positive reviews can undo the damage caused by a single negative review. When a product has multiple online reviews, the chances of a customer making a purchase are significantly higher. The Spiegel Research Center found that displaying website reviews increased conversion rates by as much as 380%.

These results suggest that online reviews do have a significant impact on product sales. One recent study analyzed online reviews’ impact on video game sales. It showed that online reviews influence less popular games than games with more internet experience. It also found that the effects of online consumer reviews varied across products in the same product category. This suggests that online reviews should depend on the product’s and its consumers’ characteristics. It also discusses the implications of this finding for the rise of niche products in recent years.

Moreover, emotions play a significant role in influencing product attitudes. This study found positive reviews boosted positive attitudes while negative ones lowered them. Overall, consumers were more likely to purchase a product if the reviews were positive or neutral. Positive reviews had a less significant impact on the sales of luxury and daily-use products, but negative reviews had a more substantial influence on daily-use products. Although the power of online reviews on sales has been studied for years, research shows that the impact is significant.