Why Word-Of-Mouth Marketing Is the Ideal Solution To Reduced Marketing Budgets

With sales plummeting and revenues significantly impacted, brands are looking to cut costs wherever they can-and for many, the obvious candidate has proven to be their marketing department

By Pranav Kosuri


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Four months have passed since the World Health Organization (WHO) officially declared COVID-19 a global pandemic. In the time since, the situation has shown no signs of improving. Although lockdown restrictions have been lifted in many parts of the world, a potent mix of fear and anxiety has conspired to keep people at home. In this environment, businesses across sectors have taken a hit of unprecedented proportions. With sales plummeting and revenues significantly impacted, brands are looking to cut costs wherever they can—and for many, the obvious candidate has proven to be their marketing department.

Objectively, the logic behind this decision is sound. Widespread economic uncertainty and the ever-present threat of job losses have driven most households to be more prudent with their expenditures. While products deemed "essential' have seen an explosive rise in sales, the demand for discretionary products has fallen by the wayside. When coupled with the pause that most businesses have placed on new product launches, and faced with consumers who are unlikely to be receptive to traditional marketing methods, the decision seems like the only recourse for businesses on the brink.

The onus has now been placed on marketers to step up and prove their worth. In the face of these circumstances, many may balk at the prospect. And with slashed budgets and the pressure to produce heightened to unimaginable levels, who could blame them? However, many brands already possess an asset that could potentially resolve their troubles, is readily available, and costs a mere fraction of the price demanded by traditional methods—word-of-mouth marketing. Also known as crowd marketing, this term describes the actions taken by a business that drive customers to organically promote their products, services, or brand. Modern word of mouth marketing describes both targeted efforts and naturally occurring instances where users share their satisfaction with a brand. It is, for all intents and purposes, unpaid promotional activity on behalf of a company by consumers who truly believe in their brand's vision and products. And it relies entirely on the one resource that most brands already have in abundance—a large and dedicated fan base across social media platforms such as Facebook and Instagram.

Although there are many ways in which a brand's fanbase can showcase their support, the most impactful and sought after outcomes are the creation of user-generated content (UGC) and the appearance of customer advocacy. The former consists of any content or material referencing a brand that has been created by a customer and posted online. This covers a wide gamut, and can include anything from pictures and videos to captions and original music. Customer advocacy, on the other hand, involves encouraging and amplifying the voices of fans when they discuss a brand's products or services. By putting the brand's satisfied customers in focus, a company has the opportunity to mobilize their consumer base and create active followers who will willingly share their content.

Despite the many ways in which a vocal consumer base can amplify and enhance a company's marketing efforts, consumers continue to remain an overlooked marketing asset during a brand's development. However, a brand that makes the effort to leverage the massive opportunity presented by their own social media platforms may just find themselves sitting on a goldmine. According to a study conducted by global marketing research firm Nielsen, 92 per cent of consumers believe suggestions from friends and family more than they do advertising. The importance of effectively harnessing every aspect of crowd marketing becomes even more important given that 70 per cent of consumers consider online reviews the second most trusted source of brand information, while 50 per cent view UGC as more trustworthy than a brand's own social media content.

These figures are especially important given the situation businesses around the world currently find themselves in. With customers unable to leave their houses and traditional marketing techniques proving increasingly ineffective, brands must learn to make the most of limited marketing budgets. Word-of-mouth marketing allows businesses to cut through the noise of competitors in the social media sphere and directly engage with their core consumer base, encouraging and incentivizing them to share their experiences and showcase their loyalties.

Although the marketing field is facing its biggest challenge yet, the pathways offered by crowd marketing offer a chance to make up for time lost. By making consumers feel as though they are a vital part of the ecosystem, rather than a statistic on a spreadsheet, brands can create an organic support system that promotes both brand recognition and recall.

Pranav Kosuri

Co-Founder, Brandie

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