Through the Grapevine: Harnessing the Power of Word-of-Mouth Marketing

As consumers grow more skeptical of traditional marketing methods, word-of-mouth marketing is more powerful than ever. The social media revolution only adds to this, with consumers able to voice their opinion with a single photo on Instagram. Just how powerful is word-of-mouth marketing?

McKinsey labels two factors that determine the value of word of mouth:

(1) volume, the number of people talking, and

(2) impact, the influence of each of these people. Impact is a variable solely based on trust: who says it, what they say, and where they say it.

McKinsey estimates that a recommendation by a trusted friend has 50x the
power of that of a stranger. For the modern consumer, an individual’s network of trust is larger than ever with the huge variety of social platforms. Companies with a strong online presence have the power of earned media: brand awareness grows as word of mouth travels through the vast web of social connections. Volume increases, and impact is high.


At the heart of effective word of mouth is the product. Consumers talk about a product most when their experience deviates from expectations. Word-of-mouth marketing encourages companies to create products that outperform expectations; flaws in functionality have nowhere to hide.

Virtually all companies have a deep understanding of traditional marketing methods; in essence, the learning curve is flat. This means that even huge investments in traditional marketing campaigns can yield average to small returns. On the other hand, comparatively few companies are exploiting the considerable benefits of word-of-mouth marketing. For the company that invests the time to learn how to manage their word of mouth, the returns on investment are enormous.


  • Word-0f-mouth is the main factor behind 20-50% of purchasing decisions (McKinsey & Co., 2010)
  • Online shoe retailer Zappos gets 75% of its customers via word-of-mouth (
  • Tesco’s 2012 Share & Earn app allowed users to choose their favorite products. When a friend made a purchase, the user gained double Clubcard points. Tesco saw recommendations as a percentage of Facebook comments rise from 26% to 54% (PeerIndex)
  • Men’s shorts company, Chubbies, has marketed itself solely through social media since it was founded in 2011. Today, it ships in the U.S. and to 40 other Countries (CNN Money)