Case Study: In Local Attribution Word of Mouth Dominates

Key Performance Indicators (KPIs) in local digital marketing are an indicator of your marketing success. But KPIs are most valuable of we can ascribe some attribution to them. How many actions actually led to a sale?

transaction payment

In the first part of this series we looked at these KPIs for Barbara Oliver Jewelry in Buffalo for for the last quarter of 2016. Concurrently with that research, the staff at Barbara Oliver surveyed every new customer and asked how they discovered her business and came to buy from her.

Advertising & Marketing Mix

As noted, the jewelry store was doing a range of advertising during the quarter; Radio, billboards, Yellow Pages (print), SEO and a small amount with Facebook & GetFiveStars.

offline ad sources

In total all offline advertising directly led to just 9% of the new sales transactions.

Radio was the most expensive of her advertising expenditures by a long shot. It generated 4% of her new sales. The demographics of that grouped were mostly men, listening to drive time that still had not purchased Christmas present. While the volume of those sales was not high, the dollar volume was significant enough to consider future radio ads.

Because it was the Christmas quarter and Barbara Oliver Jewelry is located in the 3rd floor of an office building with no street level visibility, they took out a bill board. It generated 1% of total sales. While it might have succeeded on a branding level it didn’t succeed in terms of actual sales to new customers.

The third largest expenditure for the quarter was the print Yellow Pages. While this generated roughly 2% of new sales, they tended to be very low dollar items and it is likely going forward that this expenditure will be either cut or axed. Another 2% of new customers fell into the general awareness category and couldn’t pinpoint any particular or single source for their visit.

Word Of Mouth – In Person

Barbara’s business, like many upscale high service businesses is very dependent on word of mouth, whether person to person or digital, for new customer acquisition. She spends a great deal of time with each customer on developing an understanding of an emotional personal purchase.

customer referrals

She and her staff spend time training and learning enough about each of theses clients to become friends their friend. 33% of Barbaras new clients came from person to person word of mouth referrals.

These were most often older, well healed clients and often female. This demographic has a well developed referral network and is less likely to use on-lines reviews as a trusted information source.

Word Of Mouth – Online Reviews

By far the largest group of new customers came, one way or the other via the internet. Several interesting things about this group. When asked about how they found Barbara they would say things like “reviews on the internet” or “read about her on the internet” but even with prodding were unable to identify a site any given site or sites as the source for the inspiration.

reviews source

These purchasers tended to be Millennial and Barbara had this to say about that cohort:

“No question, the millennials are all about the reviews.  They do however then tell others as I have gotten a lot of secondary business once their friends drink the kool-aid.  The referrals still mention that they go and check out the reviews for themselves, interesting clients.  I personally love them as they want information which we do very well, and they want to keep it local rather than their predecessors who thought online was the only way to go. Can’t hire them but love them as customers.”

In this group, even if there is a person to person word of mouth referral they STILL then go on to read reviews. While its difficult to know with assurance what other sites they visited, we know from our KPI research that one way or another the actions came from Google.

customer sources

 

Incredibly, at least in the case of Barbara Oliver Jewelry, word of mouth, whether online or offline contributes 91% of all new sales. Reputation is everything and if your business is well run, will provide an ongoing stream of new customers.

This is one reason why Net Promoter Score is such a valuable metric. In Barbara’s case it is an off of the charts value of 92 and is clearly an indicator that her client base loves doing business with her.

Online Reviews & Reputation

Reviews are clearly important. Barbara has been at them in one form or another since 2009. She has slowly and steadily expanded the sites that she has asked for reviews at and that has served her well.

No matter the brand search variation, you will find two or three Reviews from the Web sources in her Knowledge Panel and an equal number of other sites with stars populating the organic search results. No matter where or how you look she has a stellar, consistent reputation story to tell and it pays off.

But reviews in and of themselves are not enough. She has to do well enough in the local search ranking game so that folks see her reviews and come back after searching to do brand searches and/or visit her website for confirmation.

Given that Google appears to be succeeding at getting searchers to take action right from the search results. When 70% KPIs are coming from searcher actions directly on Google one can really say that Google is a business’s new home page. It doesn’t obviate the need for a website but it does point out that businesses need to think long and hard about conversion optimization on Google.

This is the 2nd post in a series, to read the first post go here.

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About the Author

Mike Blumenthal
With unmatched industry expertise and knowledge, Mike is a co-founder and serves as GetFiveStar’s Chief Review Officer helping our customers get the most of the platform. Mike is widely cited as the foremost Local Search expert in North America and affectionately known among his colleagues as ‘Professor Maps’.

2 thoughts on “Case Study: In Local Attribution Word of Mouth Dominates

  1. margaret - May 4, 2017 at 10:58 pm

    well heeled, not healed…

    Great case study!

    A recent YP study showed searchers in this sector use at least two sources for information when researching a company, and testimonials are in their top criteria for selection.

    The long history this store has with reviews on her site and around the web helps her stand head and shoulders above competitors, for sure.

    Thanks again for these insights (and all that juicy detail), Mike.

    Reply
  2. Mira Jindani - June 28, 2017 at 12:03 am

    Thanks Mike for this very useful article. How do you think the new Google review system (Local Guides) will affect the review landscape?
    Thanks!

    Reply

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