The Impact of Word of Mouth Marketing on Consumer Buying Behaviour

Consumer behaviour has always been a subject of great interest for marketers. A Huge amount of money and time is spent to understand how customers buy products. How they make purchase decisions. What factors are responsible for their buying behaviour? But understanding consumer behavior is not that easy. Consumer behaviour is very complex and dynamic. It keeps on changing. It is almost unpredictable. You just cannot fathom what’s in the mind of the consumer.  And at the same time understanding consumer behaviour is highly crucial for your business.

 “Behind every successful business is a genius marketing team that understands its customers and, behind every failed business is a team that misunderstood its customers.”

What is Consumer Buying Behaviour?

Understanding Consumer buying behavior is the most important part of marketing. Without understanding consumer behavior, a business is very unlikely to survive. So what exactly is Consumer Buying Behaviour?

Business Dictionary.com defines Consumer Buying Behaviour as

The process by which individuals search for, select, purchase, use and dispose of goods and services, in satisfaction of their needs and wants.”

Another definition on Study.com suggests,

Consumer buying behaviour is the sum total of a consumer’s attitudes, preferences, intentions, and decisions regarding the consumer’s behaviour in the marketplace when purchasing a product or service.” 

In very simple terms, consumer buying behavior encompasses the pre-purchase behavior, purchase and post-purchase behavior of an individual. It is a general process that more or less every consumer, irrespective of their individualities, goes through while buying a product.  

Marketers across the globe follow a standard 5 step model to understand consumer buying behavior. Marketing scholars are of the opinion that generally, every person goes through the following 5 steps when they purchase something.

  • Problem Recognition or need recognition

It is the first stage where a person starts to feel that they have a particular unfulfilled need. It can be triggered both internally as well as externally.For e.g. if my old phone is not working properly, I will start feeling the need of buying a new phone. Here the need generated internally. No one else induced it.

But in many cases, the need can be induced by others. For e.g. I have bought a phone a year ago. Although my phone is working perfectly well, but lately everyone around me seems to be talking about a newly launched phone. This will make me feel that I also need a new phone.

  • Information Search

After a person has recognized their needs, they actively start seeking information about the product or service they need. They will ask their friends and family.  They will look on the internet.  They will try to get some information from social media and review websites. They will visit many websites and try to compare and contrast.

  • Evaluation

After collecting all the required information regarding the products or services, an individual starts evaluating the features, prices, brand image, product appeal, etc. against their needs, preferences, attitudes, budget and convenience, etc. The buyer is most likely to choose a product or service that satisfies most of the criteria set by them.

  • Purchase

After the evaluation is over, the consumer will make a purchasing decision. The purchase can be made offline or online. The purchase decision is affected by the availability of the product as well as the convenience of buying the product.

  • Post-Purchase  Evaluation

After the purchase is made, the consumer would start using the product or service. After some time the consumer would be able to evaluate their purchase decision. It is the stage where a consumer decides whether the purchase was a smart purchase, whether it satisfied their needs, whether it was a value purchase, whether they would make a repeat purchase, etc.

As marketers, you can influence a consumer right from the time of problem recognition to post purchase evaluation. You can influence them through targeted advertisement, content marketing, email marketing, mobile marketing, etc.  But one thing that can prove to be more effective than any other form of marketing is Word of Mouth.

Word of Mouth Marketing or Word of Mouth Advertising

Entrepreneur.com defines Word of Mouth Marketing as An unpaid form of promotion in which satisfied customers tell other people how much they like a business, product or service.”

Word of Mouth marketing is simply people who love your brand, talking about it to their friends and family. Word of Mouth is not a new concept. It has been there since ages. People from times immemorial have been buying products or services after getting recommendations from friends and families.  Word of mouth happens both offline and online.  

But an online word of mouth is easy to monitor for a marketer. And with the advent of social media, the importance of word of mouth marketing has achieved great levels.  With social media, your brand’s fan can recommend you to their friends staying a thousand miles away. Social media has actually made Word of Mouth Marketing a powerful and effective thing.

How does Word of Mouth Marketing Work

If someone loves your product or service, they are going to spread the word about your brand to their acquaintances.  All you are required to do is create a loyal customer base that is absolutely in love with your brand. They are not just your customers; they are your die-hard fans. Most of the times, they do not require any prompting from you to talk about your brand to others.

But to capitalize the Word of Mouth Marketing optimally, marketers often encourage their fans and happy customers to talk about their brand. This encouragement is done by providing certain incentives to your loyal customers for talking about you on social media and other platforms. The incentives can be in various forms like cash backs, discount coupons, free gifts, etc.  Many brands are increasingly coming up with different referral programs whereby they give incentives to their customers for referring their brands to other people.

What is the Impact of Word of Mouth Marketing on Consumer Buying Behavior?

One might wonder how effective word of mouth marketing really is. Do people really listen to others before buying something?  The answer is yes. When a person is in the information search stage of the buying decision process, they are actively seeking information from others. At this time Word of Mouth marketing can do wonders. And it is not just information search; word of mouth also affects need recognition and evaluation stages which ultimately affects the purchase decision.

You might choose not to believe me. But there is a lot of statistics and numbers to prove the impact that word of mouth marketing has on consumer buying behavior.

A Study Published on  Business2community.com  revealed the following Facts about Word of Mouth Marketing

  • Word of mouth isn’t limited to certain industries or demographics. It is effective in every industry and works for all demographics, but a certain age group and income group does rely more on referrals.
  • 82% of Americans seek recommendations when making a purchase of any kind.
  • 67% say they are at least a little more likely to purchase a product after a friend or a family member shared it via social media or email.
  • 88% of Americans say they would like some sort of reward (monetary, loyalty points, etc.) for sharing a product via social media and email.
  • 77% want money as a reward for sharing a product.

According to Insightpool’s Word of Mouth marketing statistics:

  • Word of Mouth is the primary factor behind 20% to 50% of all purchasing decisions.
  • 81% of people said that they are influenced by what their friends share on social media.
  • For 49% of American consumers, friends and family are their top source of brand awareness.
  • 43% of consumers are more likely to buy a new product when learning about it on social media.
  • 72% people say reading positive customer review increases their trust in the business.
  • Consumers sharing a brand’s message more than double the sales that resulted from paid advertising.
  • 85% of fans of brands on Facebook recommend the brand to others.
  • Brands that leverage social influencers to spread their message are seeing up to 10X increase in their conversion rates.
  • Customers acquired through social influencers have 37% higher retention rate.

Khalid Saleh in his blog “The Word of Mouth Marketing-Statistics and Trends” shares the following word of mouth statistics.

  • Word of Mouth contributes to 13% of consumer sales which amounts $6 trillion of consumer spends.
  • People are 90% more likely to buy from a brand that is recommended by a friend.
  • Word of Mouth results in 5X more sales than paid media.
  • 88% people trust word of mouth recommendations from the people they know.
  • According to 28% of consumers word of mouth is the most important factor in strengthening or eroding brand affinity.
  • 64% of marketers say that word of mouth is the most effective form of marketing.
  • 82% of marketers use word of mouth marketing to increase their brand awareness.

The numbers speak for themselves. These statistics clearly prove that Word of mouth marketing does have a clear impact on consumer buying decisions.  Word of Mouth marketing is also the most effective form of marketing and should be actively harnessed by marketers.

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