The Math behind Word-of-Mouth Marketing

The Stagering Stats

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While you probably already know word of mouth is the most powerful form of marketing / advertising, here are a few stats to drive home just how important it is to have a viral marketing mindset.

The following numbers relate to the power of organic word of mouth referrals versus all other media.

The Incidence of Consideration indicates how often a person will at least consider a particular product or service when making a purchasing decision.

The Incidence of Acceptance (similar to conversion rate) indicates how often a person will actually purchase a particular product or service.

Various types of media have different rates of consideration and acceptance. Even the numbers shown for viral referrals can vary significantly based on factors such as the credibility of the referring party or the type of product being considered (low cost versus high cost).


Let’s compare the average numbers for the Incidence of Consideration and the Incidence of Acceptance between all forms of media versus organic referrals to see the profit power of referrals.

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The percentage of people who will at least consider your product or service based on learning about you through typical media options (print, TV, Google AdWords, social media, etc.) is less than 1.5%.*

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The % of people who will actually purchase your product or service based on hearing about it through typical media and marketing is less than 0.2%.*

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The % of people who will at least consider your product or service based on learning about you through an organic referral is greater than 80%.*

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The % of people who will actually purchase your product or service based on hearing about it through an organic referral is greater than 35%.*

*Source: The New Art and Science of Referral Marketing.

The difference in effectiveness is staggering.

Exponentially compounding the profitability of viral word of mouth is the fact that organic word-of-mouth
referrals are
free.


Summary and Comparison Chart

We are comparing the numbers from all media versus organic referrals.

Incidence of Consideration

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Organic referrals are 5,233% more effective at causing someone to consider your offering.

Incidence of Acceptance (Sales)

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Organic referrals are 17,400% more effective at generating sales.

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