Word of mouth marketing (WOMM) has always been a powerful tool to influence business results. The popularity of consumer review sites like Yelp, Trip Advisor, Urban Spoon and even Amazon is a good indicator of how important word of mouth is to today’s consumers. According to Nielsen, 92% of consumers trust recommendations from friends and family over all forms of advertising.
For credit unions, the number one source for new member growth in community charter credit unions is not traditional media. Believe it or not, it’s word of mouth. It makes you wonder why so many financial institutions continue ignoring this very important, extremely effective type of marketing. Word of mouth impacts purchasing behavior, increases brand awareness, boosts traditional marketing and improves cost effectiveness.
Nothing impacts a consumer’s decision to buy something more than word of mouth, either in-person or via social media. A company by the name of ShareThis recently released a groundbreaking study (Return on a Share Report) which is the first to quantify the monetary value of online recommendations. Not only do other people’s opinions matter to consumers, they also increase what people are willing to pay for products and services.
Park City Credit Union in Wisconsin learned how effective word of mouth is at increasing brand awareness when it changed the way it donated money. Instead of just writing a check (as it had done for decades), it started getting others involved in the process. It hosted events which benefitted local consumers and local charities, and people started talking about the difference Park City was making in the community. The credit union’s brand has always been to support its community, it just changed the way it got the word out. That is what differentiated Park City from its competition.
Park City is a textbook example of how word of mouth works in conjunction with traditional marketing. The events it organized gave the community something to talk about. That’s the key to effective word of mouth. You have to give people something to talk about. That usually happens when they have a pleasant experience, when they find a product or service they can’t live without or when you do something that aligns with their belief system.
Thanks to the advent of social media, getting people to spread the word is easier than ever. If you are on Facebook for personal use, you know hardly a day goes by when a friend isn’t asking for a recommendation, praising good customer service or ranting about a bad experience with a business.
- 43% of consumers are more likely to buy a new product when learning about it on social media (Nielsen).
- 85% of fans of brands on Facebook recommend brands to others (Syncapse).
- 81% of U.S. online consumers’ purchase decisions are influenced by their friends’ social media posts (Market Force).”
You can find a lot more information about word of mouth in the August issue of my monthly newsletter. Get more statistics, read the findings of the ShareThis study referenced above and learn more about how Park City used word of mouth to increase awareness so much, it was named Business of the Year by a local of chamber of commerce.