Marketers Underestimate Word of Mouth, Overestimate Influencers: Report

Sometimes in the retail business, you do not know what you do not know. That knowledge gap can lead to sales projections that fall short. It can end up with marketing strategies that fall flat.

Marketing and business communications company R.R. Donnelley & Sons (RRD) last month released a study which reveals that traditional marketing channels, including word of mouth, direct mail, and in-store signage, are largely untapped and underestimated by marketers.

RRD contracted with FINN Partners in July 2021 to survey 250 marketing professionals and 1,000 consumers in the U.S. and U.K. The surveys were conducted online, and the data is weighted to be nationally representative.

The study uncovers significant differences between marketer assumptions and what consumers actually say influences their brand awareness and purchase decisions.

For instance, nearly one-third of consumers (28 percent) said word of mouth is the preferred method for learning about a new brand, product, or service. Only four percent of marketers identified word of mouth as a consumer preference.

Fifty-five percent of consumers surveyed have discovered a new brand, product, or service in the past year through word of mouth. That discovery came well ahead of other means.

Traditional Marketing Comeback

Marketers overestimated the power of Snapchat as well. While 21 percent said that consumers use the platform to discover new brands, only seven percent of consumers agreed.

A surprising 82 percent of marketers believe influencers drive consumer purchases. But the reality is that just over a quarter (26 percent) of consumers say that influencers make them more likely to purchase new products or services.

The study also revealed that word of mouth has a higher research-to-purchase ratio (40 percent) than social media (30 percent), online/digital ads (27 percent), or print ads (16 percent).

“In a tumultuous and challenging year, consumers embraced traditional marketing methods as they sought to discover, research, and ultimately purchase from new brands,” said John Pecaric, president of RRD Marketing Solutions and Business Services.

His company’s research left little confusion or doubt about what retail planners need to do to align their strategies with consumers’ buying insight. It is time for marketers to listen to shoppers.

“Based on our survey results, marketers may need to revisit their strategies and assumptions about what customers are looking for and adjust accordingly in order to meet their expectations,” he said.

Redefine and Re-Engage Word of Mouth

The survey results underscore four key themes that all point to the power of traditional marketing methods. The results also highlight how social and digital marketing continues to evolve.

Theme one reflects how word of mouth’s traditional definition has changed. It is now more than consumers sharing product and brand recommendations with one another verbally. The term has evolved to include interactions between acquaintances on social media.

Word of mouth outranked all other forms of brand discovery. The survey results speak to the continued importance of word of mouth. Consumers want marketers to deliver timely and relevant messaging, so they have something to talk about, both in-person and online.

Gen Y’s Excitement Over Direct Mail

Theme two focuses on Generation Y’s (or millennials, those between the ages of 25 and 40 years old) newfound fancy for direct mail marketing. More than half (51 percent) of consumers were more excited to receive direct mail in the past year than last year.

The highest levels were Gen Y (65 percent), Gen Z (57 percent), and Gen X (53 percent). Baby Boomers are least likely to be excited about receiving direct mail (36 percent).

Some 67 percent of marketers made significant changes to their marketing strategies in the past year. The consumer data suggests that marketers should continue to fine-tune their efforts and consider re-investing in traditional marketing channels.

Retailers, Sellers at Odds

Theme three reflects a disparity in what retailers and marketers expect. More than half (62 percent) of consumers are eager to return to their pre-pandemic shopping habits. More than a third (35 percent) of consumers admit that the changes they made to their shopping habits due to the pandemic will last less than six months.

This contrasts with marketers’ assumptions, however. Less than half of the marketers polled (43 percent) expect consumers not to return to their pre-pandemic shopping habits for another six to 12 months.

Consumers also show a preference for retailers who effectively use in-store signage and displays, with a majority (58 percent) saying that in-store signage is influential to their purchase decisions. Eight in 10 prefer to shop in stores with signage that helps them navigate the store and avoid crowds.

Social Media Still Solid, Not So for Influencers

Theme four involves understanding what really matters to consumers. The research indicated shoppers’ preference for some forms of traditional marketing channels. But their engagement with brands online and via social media continues to evolve. This poses additional complexities for marketers looking to connect with their audiences.

A large majority (82 percent) of marketers believe influencers drive consumer purchases. But in reality, just over a quarter (26 percent) of consumers say that influencers make them more likely to purchase new products or services.

At least one in three consumers follows brands they like on Facebook, YouTube, and Instagram. This is also where engagement is most likely to happen, according to researchers.

Some 41 percent of consumers have made in-app purchases on Facebook, followed by 25 percent on Instagram and 11 percent on Pinterest. Baby Boomers are the least likely to make in-app purchases. Boomers overwhelmingly prefer Facebook when they do.

Selling vs. Satisfying Causes Divide

Marketers typically are working against a set of campaign objectives and company messages that they try to push into the market. Whereas consumers have a very specific set of things that will inspire them or a specific set of products and services they hope to find or buy, explained Brian Walker, chief strategy officer at Bloomreach.

“The gap between these marketer priorities and consumer expectations comes down to the disconnect between leveraging customer data to ensure you are delivering messages that are relevant for customers, versus what messages you as a marketer feel you need to drive through your campaigns,” he told the E-Commerce Times.

Marketers leveraging data to drive personalization and optimization of their marketing see much greater results in click-through rates, open rates, retention, and conversions of customers. Most importantly, they see better lifetime value of those consumers.

That results from using an informed understanding of the customer. It also comes from marketing that is relevant to that understanding to close the gap between their priorities and their customers’ expectations, he added.

Divide Impacts Retailers

The impact is felt in the winners and losers. Retailers that have invested in data infrastructure and in driving personalization and optimization are yielding much better results than those who are sticking to batch and blast marketing through online and legacy offline channels, observed Walker.

“It is also leading those who have not focused on data infrastructure to reconsider their investment strategies for the coming year,” he said.

E-commerce is showing no signs of slowing down. The retail industry is now in a digital-first era.

“Retailers are recognizing that those who have focused on personalized experiences are the ones that are winning in this era of digital commerce growth,” Walker noted.

Bottom Line

Influencers can play a key role in acquiring customers who may not be familiar with your products or brand, according to Walker. However, it is critical that influencer strategies are followed up with a retention and reactivation strategy focused on personalization and optimization of customer engagement.

“That follow up is the difference between acquisition marketing, which plays one role, and really sustainable long-term marketing, which drives a more overarching strategy focused on customer lifetime value,” Walker said.

The full report from RRD is available here.

Jack M. Germain

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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