Repeat After Me: ‘Word of Mouth Marketing Really Works!’

I read an interesting article in the Journal of Marketing recently that confirmed what I’ve known for a long time: word of mouth (WOM) marketing really works. WOM has taken a backseat to digital marketing efforts lately, but there’s no reason why a marketer can’t do both, and at the same time.

In my own experience, WOM (also known as referral marketing) drives a greater number of customers and more valuable business than any other marketing source. In fact, referrals account for more of our business than in-bound marketing, and often take only one phone call to close. In the last half of 2010, a time of significant growth for my company, 60% of our new customers came from a referral.

The Journal of Marketing article highlights a study conducted by the University of Pennsylvania and Goethe University of Frankfurt, which found that referred customers were both more profitable and loyal than other customers. In the study, referred customers had a higher contribution margin, a higher retention rate and were more valuable in both the short and long term.

While some experts believe that asking for a referral should take place face-to-face, email marketing is a very effective channel for WOM.

To find out a few things to keep in mind when adding word of mouth marketing to email campaigns, click here to read the rest of the MediaPost article.


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