New Research Confirms the Importance of the Recommendation
Paul M. Rand
Recommendations are being regarded as a new key measure of determining whether or not products, services and business are successful. From prior research, we know that 92 percent of all consumers report that a word-of-mouth recommendation is the “leading reason they buy a product or service” (Nielsen 2012).
While word-of-mouth recommendations have long been considered the “holy grail” of marketing, new primary research from Zócalo Group uncovers insights into what actually constitutes a recommendation, where and when customers recommend, and who and what is trusted in today’s digital and social media-rich world.
Through the explosive growth and connectivity of social media, every aspect of a company is now openly discussed. Brand and company comments now cover the gamut from whether you’re loyal to employees, considerate of customers and fair with partners. Companies that understand how they can actively shape, monitor, and manage how their brand is recommended, are experiencing a transformative way of doing business today.
According to Zócalo’s 2013 Recommendations Study, 91 percent of consumers make a recommendation after having a positive experience with a particular brand. In addition, consumers also express their altruistic sensibilities, with 49 percent saying that they made a recommendation because they “wanted to help the person [they] made a recommendation to.”
When consumers were asked what they thought of most often as an online recommendation, the top answers were YouTube video reviews (46.5 percent), friends “liking” brand pages on Facebook (46.1 percent) and online positive brand reviews (45.5 percent). As for offline recommendations, the top three answers for consumers were the most direct expression: someone they know expressing their love for the brand (64.5 percent), closely followed by a friend or coworker (64.3 percent). It’s important for brands to understand what consumers consider a recommendation because as companies focus on how best to engage consumers, those consumers’ actions online and offline are impacting purchase decisions for other consumers.
As for what sources consumers trust for recommendations, the study found differences between the perceived trustworthiness of different sources of recommendations. Direct, in-person recommendations lead, with 63.1 percent of respondents saying they are the most trustworthy. The channels most used for recommendations are similar to those that were named the most credible—in-person encounters (68.9 percent) and Facebook posts (37.1 percent) are two of the top places people make recommendations. In terms of who they listen to, respondents said friends (79.5 percent) and family members (73.4 percent) the most, with celebrity spokespeople (4.1 percent) on the low end. Although engaging celebrities will continue to have a place in building awareness for brands, we now know that when it comes to consumers purchase decisions, they are recognizing the difference between a celebrity endorsement and a genuine recommendation.
Brands need to understand where, how and why they are—or aren’t—being recommended. Both consumer and business to business brands now have the power to directly influence and impact how they are recommended—and bought. This research gives us an even clearer look and how both explicit and implied recommendations are changing the game. Insights from this study should help you create program strategies and make them even more effective.
Full details of the survey are available at http://zocalogroup.com/knowledgehub/recommendations-study/
Paul M. Rand is the President and CEO of Zócalo Group (www.zocalogroup.com) and author of Highly Recommended: Harnessing the Power of Social Media and Word of Mouth to Build Your Brand and Your Business (McGraw Hill, September 2013)