Entrepreneurs Underestimate Phrase of Mouth, Overestimate Influencers: Report | Advertising and marketing

By Jack M. Germain

11/17/2021 3:47 PM PT

Sometimes in retail you don’t know what you don’t know. This knowledge gap can lead to incorrect sales forecasts. It can end up with marketing strategies that fail.

Marketing and business communications firm RR Donnelley & Sons Company (RRD) published a study last month showing that traditional marketing channels, including word of mouth, direct mail, and in-store signage, are largely underutilized and underestimated by marketers.

In July 2021, RRD commissioned FINN Partners to survey 250 marketing professionals and 1,000 consumers in the USA and Great Britain. The surveys were carried out online and the data are weighted representatively across the country.

The study reveals significant differences between the assumptions made by marketers and what consumers actually say influences their brand awareness and purchase decisions.

For example, nearly a third of consumers (28 percent) said word of mouth is the preferred way to learn more about a new brand, product, or service. Only four percent of marketers cited word of mouth as a consumer preference.

55 percent of the consumers surveyed discovered a new brand, product or service through word of mouth in the past year. This discovery was far ahead of other means.

Traditional marketing comeback

Marketers have overestimated the power of Snapchat, too. While 21 percent said consumers use the platform to discover new brands, only 7 percent of consumers agreed.

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

The study also found that word of mouth had 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 turbulent and challenging year, consumers embraced traditional marketing practices as they wanted to discover, research, and ultimately buy 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 consumer buying insights. It’s time marketers listened to buyers.

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

Redefine and activate word of mouth

The survey results highlight four key themes, all of which point to the power of traditional marketing methods. The results also illustrate how social and digital marketing is evolving.

Topic one reflects how the traditional definition of word of mouth has changed. Today it is more than just verbally sharing product and brand recommendations with one another. The term has evolved to encompass interactions between acquaintances on social media.

Word of mouth outweighs all other forms of branding. The survey results speak of the continued importance of word of mouth. Consumers want marketers to deliver timely and relevant messages so that they have something to discuss both in person and online.

Gen Y’s excitement about direct mail

Topic 2 focuses on the newfound desire for direct marketing among Generation Y (or millennials between 25 and 40 years old). More than half (51 percent) of consumers enjoyed direct mail more than in the previous year.

The highest scores were Gen Y (65 percent), Gen Z (57 percent), and Gen X (53 percent). Baby boomers are least happy about direct mail (36 percent).

About 67 percent of marketers changed their marketing strategies significantly in the past year. Consumer data suggests that marketers should continue to refine their efforts and consider investing in traditional marketing channels.

Retailers, sellers at odds

Topic three reflects the different expectations retailers and marketers have. 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 shopping habits changed by the pandemic will last less than six months.

However, this is contrary to what marketers have assumed. Less than half of the marketers surveyed (43 percent) expect consumers not to return to their pre-pandemic shopping habits in the next six to twelve months.

Consumers also prefer retailers who use in-store signage and displays effectively, with a majority (58 percent) saying that in-store signage has an impact on their purchasing decisions. Eight out of ten prefer to shop in stores with signs that help them find their way around the store and avoid the crowds.

Social media still solid, not so for influencers

Theme four is about understanding what is really important to consumers. The research found that buyers prefer some forms of traditional marketing channels. But her engagement with brands online and through social media continues to evolve. This presents additional complexity for marketers looking to connect with their audience.

A large majority (82 percent) of marketers believe influencers are driving consumer buying. But in reality, just over a quarter (26 percent) of consumers say influencers are more likely to make them buy 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, according to researchers.

Around 41 percent of consumers 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 mostly prefer Facebook when they do.

Selling vs. sharing satisfying causes

Marketers typically work against a set of campaign goals and company messages that they are trying to bring to market. While consumers have a specific set of things to inspire, or a specific set of products and services to find or buy, explained Brian Walker, chief strategy officer at Bloomreach.

“The gap between these marketers’ priorities and consumer expectations stems from the separation between how you use customer data to make sure you deliver messages that are relevant to customers and the messages you, the marketer, deem necessary to drive your campaigns enforce, ”he told the E-Commerce Times.

Marketers who use data to drive personalization and optimization of their marketing achieve much better results in terms of click rates, open rates, customer loyalty and conversions. Most importantly, they see better lifetime value from these consumers.

This arises from the use of an informed understanding of the customer. It also comes from marketing relevant to that understanding, to bridge the gap between their priorities and their customers’ expectations, he added.

Split affects retailers

The effect can be felt on the winners and losers. Retailers who have invested in data infrastructure and personalization and optimization get much better results than those who stick to batch and blast marketing through online and legacy offline channels, Walker observed.

“It also leads those who haven’t focused on data infrastructure to rethink their investment strategies for the year ahead,” he said.

Ecommerce is showing no signs of slowing down. Retail is now in a digital era.

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

Bottom line

According to Walker, influencers can play a key role in attracting customers who may not be familiar with your products or brand. However, it is critical that influencer strategies are followed with a retention and reactivation strategy that focuses on personalizing and optimizing customer loyalty.

“This follow-up is the difference between acquisition marketing that matters and truly sustainable long-term marketing that drives an overarching strategy that is focused on customer lifetime value,” said Walker.

You can find the full report from RRD here.

marketersJack M. Germain has been a reporter for the ECT News Network since 2003. His focus is on corporate IT, Linux and open source technologies. He is an esteemed reviewer of Linux distributions and other open source software. Jack also deals extensively with business technology and data protection issues, as well as developments in e-commerce and consumer electronics. Email to Jack.

Comments are closed, but trackbacks and pingbacks are open.