Word Of Mouth Vs Advertising

Word Of Mouth Vs Advertising

For any business to survive, they need clients to purchase their goods or services, and the two main methods have always been word of mouth and advertising. These two options are always best used in conjunction, with distinct pros and cons for each.

First and foremost, for large campaigns, advertising is always the best. If a company provides a bulk service or product to many people, such as a broadband provider of phone network, then advertising is key. Advertising allows a company to reach many times more users reliably than word of mouth. Word of mouth is a great tool, well cultivated by exceptional service and value for money , but how often do you personally talk to someone about their potential new broadband provider? The answer is rarely at best.

If your company specializes in offering bespoke, custom services to a small number of clients (usually high value CLV) then word of mouth might be your best option. Tailored services like this, which people may need but not be looking for, often go by friend and family recommendations. Accountants and finance are great at this, having a loyal customer base which provides them will a steady rollover income.

Lawyers are the best example to be compared here. Think of it this way, if you had an accident on the way to work and needed a lawyer, you’ve probably heard of a few on TV or radio which you could look into. They cast a wide net with these adverts, and get many people trying them out just from their adverts. But, if you needed a specialist lawyer such as a divorce lawyer, then friends and family recommendations would come as a priority. They can give you a fuller, truer, more experienced picture of your potential lawyer which you wouldn’t get from an advert. Small claims is something which thousands of lawyers specialise in, and the routine means that there isn’t much difference between any candidates.

The main disadvantage to either method of obtaining business is simply cost. Word of mouth can only be achieved by having low prices or exceptional quality; it’s unheard of for people to recommend something which doesn’t qualify either category. Of course, low cost minimizes the profit potential of a company, and can also lead to operating on the fine line between success and failure, where a few bad months would put you out of business.

Advertising is a much more up-front cost for the business, with money being spent not only on the adverts themselves, but to afford offers and incentives which naturally accompany them. A newspaper advert may only cost a few hundred pounds, but the incoming revenue will also be low. On the other hand, you could invest in an arena advert seen by tens of thousands of people, but it will cost alot. Word of mouth doesn’t rely on offers at all, so there’s the added benefit of avoiding loopholes in offers.

There is a natural stigma surrounding advertising for many business to business companies (B2B), where companies would much prefer to go with a brand they trust than try out an unheard of competitor. Businesses which need the services of other companies rely on what they know, and word of mouth more than advertising.

End customers are the opposite, where they would often prefer to go with the best or cheapest option they can find themselves, which is usually with an offer in an advert. As always, it’s best to do your research before deciding on signing up to a new product or service. After all, word of mouth only goes so far, and with the massive rise in multi-level marketing (MLM) online today, it’s best to be sure you can trust the person recommending.