Question: What is the one thing a customer wants to hear before purchasing a product or service?
Answer: An honest opinion, which is why 40% of surveyed customers report being strongly inclined to purchase a product or service if it comes “recommended.”
This desire to make informed, thought-out buying decisions is what sustains the “market” for recommendations—where current and prospective consumers exchange opinions—and it’s what has led many companies to engage in social media relations and word-of-mouth marketing in hopes of influencing purchasing behavior.
The problem, however, is that there is an inherent gap between this supply and demand of recommendations. Not only have companies traditionally struggled with turning positive opinions of one group into sales among others, but recommendations are hard to come by, as less than one-third of customers have the inclination to recommend a product or service.
ENCOURAGING RECOMMENDATIONS
Given this reality, many organizations are grappling with how to go about “encouraging” or “enabling” recommendations and how to turn these recommendations into sales. There has yet to be a complete answer, as consumer attitudes and behaviors are usually product-, service- and industry-specific, but there are some ideas for the “general” case, which happens to include—for better or worse—anything and everything, from pencils to banks.
A market research study conducted by Peppercom’s Business Intelligence Group asked the following two multi-pronged questions:
1. What set of product or service characteristics determine a person’s predisposition to make a recommendation? Do consumers recommend products/services because they’re trendy, cheap, or because of something else like great customer service?
2. What correlates with a person’s predisposition to purchase a product/service based on a recommendation? Do consumers respond with a purchase if opinions come from sources they trust (i.e., social and traditional media), or are product/service characteristics themselves the main drivers?
CHARACTERISTICS DRIVE RECOMMENDATIONS
To answer these questions, Peppercom surveyed 350 consumers and found that individuals are more likely to recommend products/services due to factors like customer service, brand, performance and trendiness.
Other product/service characteristics, such as price, quantity, environmental considerations and durability, as well as the availability of discounts and coupons, are, as a general rule, statistically insignificant when it comes to enticing recommendations. Moreover, gender plays an important role, as women are more than twice as likely to engage in recommending behavior.
TRUST DRIVES PURCHASES
On the flip side, when purchasing as a result of a recommendation, the product/service characteristics don’t really matter. Instead, Peppercom’s research found that consumers respond positively if recommendations come from information sources they trust.
The data also showed that individuals who trust family and friends, product comparison sites, experts and critics, and social media such as blogs, are more likely to purchase a product/service due to a recommendation. Moreover, individuals who trust company/product marketing materials, such as the corporate Web site, buy into the brand promise and don’t care about the opinions of others.
SO, WHAT DOES THIS MEAN FOR YOU?
Armed with the power of market research, a communications, marketing, or public relations initiative can move beyond conventional wisdom and “gut feelings” and become research-driven and strategic. You want to give your product/service the best opportunity for generating the highest return on marketing dollars invested.
To do so, you need to use word of mouth to drive sales, and stimulate the current customer base (and other sources of information) to recommend your product. The success of this comes in a twofold formula.
1. Go to market with a marketing, communications or public relations initiative that stresses the product attributes that are most likely to entice recommendations. As Peppercom’s data and analysis shows, you’ll want to disseminate messages that highlight the features of your product/service that will maximize recommendations by your target audience.
2. Get the right sources of information, in particular, the ones your potential consumer trusts, to advocate on your behalf. By reaching out to them indirectly via trustworthy sources of information, you’d not only get a product-specific message across, you’d also expose your potential customers to trustworthy recommendations.
Today’s marketing and communications professionals are under more pressure than ever and the “target all” approach inevitably wastes resources. As such, you must ensure that every dollar invested in marketing, communications and public relations is well spent and results in positive outcomes.
Certainly, one of the most coveted results is having a company’s or client’s product or service recommended by one happy customer to a potential customer. In fact, we highly recommend it. PRN
CONTACTS:
Steve Cody is managing partner and co-founder of Peppercom, Inc. Milos Sugovic is a research analyst with Peppercom’s Business Intelligence Group. They can be reached at [email protected] and [email protected].