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Word of mouth drives new customers

BY Marianne Wilson

The recommendation that consumers rely on most when it comes to driving brand awareness is decidedly low tech.

For 45% of consumers, the first time they hear about a retailer they have never purchased from is through friends and family, according to a new study by Yes Marketing. In “The Retail Shopper’s Journey to Loyalty” study, word-of-mouth recommendations significantly outweighed other sources, including product review sites (8%), influencer recommendations (4%) and news sites (2%) when it comes to driving brand awareness.

In addition, 69% of consumers have avoided shopping with a retailer they have never purchased from before because of negative feedback from family or friends. The findings indicate that building trust and goodwill with customers early on is crucial for marketers, according to Yes Marketing.

The report found that comprehensive product information and message relevance are among the top factors that build trust with a new retailer. More than a third of consumers (36%) reported that having enough product information is the number one driver of trust in retailers they’ve never shopped with before.

“Building trust is key at the acquisition and retention stages of the shopper’s journey,” said Jim Sturm, CEO of Yes Marketing. “To win over skeptical customers, retailers must convince consumers that their products are valuable and that their brand is trustworthy, especially in industries like luxury goods, home furnishings and electronics where the price tag is higher and consumers purchase less frequently.”

In other findings:

• In terms of the products themselves, almost half (47%) of consumers ranked price as the most influential factor in their decision to purchase from a new retailer, followed by quality (39%), indicating an opportunity for marketers to emphasize these elements in communications with new prospective customers. When it comes to convenience, 40% of consumers rank shipping as the number one factor in their decision to purchase from a new retailer.

• Nearly a quarter of consumers (24%) say proximity to a store is the most influential convenience factor when choosing to purchase from a retailer for the first time.

• Across channels, 32% of consumers say they receive marketing messages too frequently from retailers they’ve purchased with, and more than a third (36%) say they receive too many emails.

• Conversely, 7% of consumers say they receive marketing messages too infrequently from retailers they’ve purchased with.

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