The Big Deal about Word of Mouth

from marketingcharts.com:

Real-Life WOM Beats Online by Wide Margin

In spite of increased online activity and news coverage about the growing influence of blogs and social networks, new research from Mintel continues to show that real-life referrals are more influential to consumers than those received online.

The survey, which echoes prior research from Rubicon, found that 34% of American consumers bought a product or service based on a recommendation from a friend or relative, while 25% bought based upon a recommendation from their spouse or partner.

In contrast, only 5% bought a product based on a referral based on what a blogger had to say about it. The number was the same for a recommendation from a chat room.

“It’s interesting to find that as much time as we spend online, we still prefer a personal recommendation from someone we know and trust,” said Chris Haack, senior analyst at Mintel. “Young adults are somewhat more likely to turn to the internet for advice and referrals, but even they listen to their peers first.”

Price Drives Recommendations

Most people base a recommendation on price and convenience, according to Mintel. This is especially true in the current economic climate, where shoppers are increasingly intent upon finding deals. More than 64% of respondents say that price drives them to recommend a product or service, while quality (55%) and convenience (33%) rate second and third.

Mintel also reported that Asian and Hispanic respondents are considerably more likely to recommend a product they saw advertised. Asians (14%) and Hispanics (10%) are also more likely to report being influenced by bloggers to purchase a specific product or service.

While the study confirms the importance of personal word-of-mouth, it does not negate the importance of online reviews in the purchase-research process, especially during the economic downturn. Other research has shown that shoppers are increasing their due diligence by looking at online reviews, and that nine in 10 shoppers steer clear of e-tailers with bad reviews.

“The sheer number of people that purchase based on recommendations proves marketers need to pay attention to word of mouth,” said Haack. “It’s becoming easier for businesses to lose control of their marketing messages, so companies need to carefully monitor and respond to consumer conversations about their brands.”

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