Why do we spend much on advertising and so little on word of mouth?

spend so much advertising

In the hours that make up your day as a marketer, what
percentage of your time goes to advertising? And what percentage of
your budget?

According to eMarketer, US ad spending is forecasted to grow
6.6% in 2018, reaching $220.96 billion. 

With billions of dollars, countless agencies and infinite hours
spent on planning and optimizing paid media, surely it’s the top
resource your consumers use when making purchase decisions? Okay,
maybe it’s not number one, but it has to be in the top three? Top
five? 

No. Not even close. 

This leads me to today’s number of the day. Eight.

Our recent study, “Chatter Matters: The 2018 Word of
Mouth Report
,” found that advertising was the eighth most
valued source of information when we make substantial
purchases. 

If it’s not advertising that affects consumer decisions, what
do consumers actually trust?Chatter Matters found tha

  1. Personal experience
  2. Brand familiarity
  3. A word of mouth recommendation from friends and family
  4. Online review from friends and family
  5. Expert reviews
  6. A discount or coupon
  7. News coverage
  8. Brand advertising

Recently, my colleague Zontee Hou
shared the psychology about why the higher the stakes, the more
important word of mouth becomes
. But how much
more? Recommendations from friends are valued 27% more than
advertising when making a substantial purchase.

Recommendations from friends are valued 27% more than
advertising when making a substantial purchase.

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As you can imagine, there are nuances to these numbers depending
on audience and vertical. For instance, online word of mouth via
social media is most important to consumers when buying goods and
services in the electronics and home improvement
categories. Conversely, offline referrals are the most powerful
and persuasive when consumers are researching entertainment,
children’s products, and restaurants. 

These numbers bring me to the question I want you to think
about: how are you prioritizing your efforts as a marketer to
integrate more intentional opportunities and touchpoints for your
consumers to share about truly remarkable experiences? Because we
know that good is just a prerequisite for being in business. Good
doesn’t make people talk. Customers never say “let me tell you
about this perfectly adequate experience I just had”.

To make people talk and spur word of mouth, you must give
customers the ingredients for a story. This is the
talk trigger
.

To make people talk and spur word of mouth, you must give
customers the ingredients for a story. This is the talk
trigger.

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In their new book, Talk
Triggers: The Complete Guide to Creating Customers with Word of
Mouth
, Jay Baer and Daniel Lemin provide you through
a specific framework to help you and your team figure out the
unique talk trigger for your organization.

These are the four characteristics of an effective talk
trigger:

  • It must be REMARKABLE: The differentiator must be
    interesting enough to be memorable. It must be worthy of remark. It
    must be dynamic enough to be the spine of a story.
  • It must be REALISTIC: The differentiator must be big
    enough to be memorable, but small enough to be trusted. Talk
    Triggers that are too grand cause suspicion. You want to find the
    Goldilocks Zone for your differentiator.
  • It must be RELEVANT: The differentiator must relate in
    some way to the overall business, so as not to cause confusion and
    dissonance among customers.
  • It must be REPEATABLE: The differentiator must be
    extended and available to all customers. A “loyal customer
    discount” is not a talk trigger because it’s offered only to a
    few, special people. That’s a client retention program, not a WOM
    program.

As you gear up for the next marketing planning season, take a
good and hard look at your customer experience. What is the one
thing that not just makes someone’s experience great, but that
makes someone tell their friend about how great it was? 

To see how important word of mouth is to your industry, download
the complete Chatter
Matters report
, the most recent word of mouth research
available to marketers.

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Why do we spend much on advertising and so little on word of
mouth?
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