Word-of-Mouth - Still Preferred?

Years ago, when a friend or relative made a major purchase, like furniture, it was the talk of the neighborhood. Everyone would come out to see the delivery people take the merchandise inside the home of their friend and/or relative. And, everyone wanted to know about the purchase and the purchase experience. If the experience was good, then the company received a raving recommendation and ultimately the company gained new customers.

I can remember my parents buying furniture at furniture stores and department stores; and, as a kid it was great fun. But more importantly, prior to the actual purchase, my parents always received information from their friends and relatives about the purchasing process, whether they’d be able to haggle with prices and even what sales person they (the friends/relatives) deemed the best. It was a big deal and products were picked carefully with lots of thought and diligence. Of course, once the products were delivered, the cycle of word-of-mouth began again.

So, in today’s world where the Internet reigns supreme for several, and where Twitter, Facebook and LinkedIn provide news and information to many, are word-of-mouth referrals still an important factor in major purchases? According to Mintel’s latest Word-of-Mouth Survey, it is! Mintel found more than one-third of consumers bought a product or service based on the recommendation of a friend/relative.

According to a furniture retailer in a recent merchandising survey for Furniture/Today’s sister publication-Casual Living, “We’ll continue our commitment to demonstrate the highest level of customer service. It’s what gives us such a high rate of repeat & referral business.”

So, while consumers are becoming a little less pessimistic and consumer confidence is growing, currently at 54.9 (1985=100) - its highest level since last September according to the Conference Board, retailers should remember that person-to-person, real life referrals remain important to the consumer. Also, according to Mintel’s survey, those who purchase in today’s economic climate are compelled to recommend a product or service based on price (64%), quality (55%) and convenience (33%).