The benefits of WOM promotion are outlined below are as follows:
Brand awareness and loyalty : The triggers are little hints that generate brand awareness, even without any actual advertisement. For example, a company executed a Kentucky Fried Chicken (KFC) campaign in Japan in 1974. It was translated as Kentucky for Christmas and promoted a party meal of fried chicken as Christmas dinner. The campaign was a huge success, and to date, several Japanese families order KFC when the Christmas holiday season rolls around. In addition, the association of brands with such triggers increases the likelihood of audiences remembering and talking about the brand.
Customer goodwill : The brands that are discussed are the ones that provide value. It could mean problem-solving or providing excellent customer service, a customer that perceives value shares the experience with others. One of the effective ways to gain a customerâ€™s goodwill is by providing value. Thus, earning a positive customer review maximizes a brandâ€™s WOM.
Customer trust and emotional linkup : People tend to feel strongly for a brand or a product. As a result, they are less likely to pick another product, even if a more logical option is introduced as people respond more to emotions and instinctively share their perceptions with others. If a brand offers a positive customer experience, the WOM efforts go a long way.
Cost-effective : WOM is one of the influential and cost-effective modes of promotion across large groups of people. Businesses spend millions of dollars to run TV commercials or on digital marketing campaigns, but WOM promotion remains an inexpensive marketing channel. It does not cost the customers anything to spread the word about the products/services of a company. In addition, the companies are relying more on customers to share positive product experiences with friends and families by building brand advocates.
Disadvantages of Word-of-Mouth Promotion
The disadvantages of WOM promotion are as follows:
Lack of message autonomy: When a business creates an advertisement, the autonomy over the marketing message conveyed to the prospective customers lies with the business. In WOM promotion, the customer has complete control over the message based on the experiences with a brand. If the message is negative or inappropriate, it can tarnish the image of a product/service or a company.
Lasting negative consequences: WOM is one of the most credible forms of promotion. Still, a brandâ€™s reputation is at stake depending on the positive or negative message shared by the customers. Negative WOM can have a lasting adverse effect on a company by resulting in sales decline and brand damage.
Unpredictable results: The results of WOM promotion are always unpredictable; thus, it is a non-viable launch tactic. WOM effectiveness is difficult to evaluate than conventional marketing strategies. Companies can conduct awareness surveys to determine an increase in brand awareness or track sales data to check for any increases in marketing revenue. However, as WOM promotion happens during informal customer conversations, it is difficult to identify whether business improvements resulted from WOM marketing.
Examples of Word-of-Mouth Promotion
The following brands are brilliant examples of WOM promotion: Coca-Cola
Coca-Cola has survived many market volatilities and remains a leader in the soft drink segment. The company is good at surprising audiences, and spreading messages of multiculturalism and goodwill. In 2012, Coca-Cola installed happiness machines across the globe. Customers looking for a cold beverage would get a free coke in turn for hugging the machine, dancing, or performing acts. Casper Mattress
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