A quick guide on how to win over new customers with a low-cost, word-of-mouth marketing strategy.
Think about the last time you used a product or service that solved your problem so well, you wanted to tell everyone you know about the experience. Perhaps you found the perfect pair of headphones for work. Or handmade chocolates that you can send as a cute gift. Whether you talked to a friend or relative directly, posted about it on social media, or left a review, telling others about your experience is word-of-mouth marketing in action.
This powerful form of marketing fuels a whopping $6 trillion of annual consumer spending globally. It can also be more effective than paid ads, resulting in 5x more sales.
This form of marketing isn’t just for big brands. Any company that provides services or sells products can benefit from word-of-mouth marketing strategies. For instance, in a survey by Alignable 85% of 7,500 small business owners reported word-of-mouth referrals as their top source of new customers.
Here’s everything you need to know about word-of-mouth marketing so you can start benefiting from this powerful form of advertising.
Word-of-mouth marketing is when consumers share positive experiences with a product or service with their peers, whether in person or online. In the connected marketplace where shoppers are always-on,
Because the information comes directly from your customers, word-of-mouth advertising is authentic and cost-effective. It’s also highly valuable. Over 50% of consumers read at least four reviews before buying a product, and 93% say online reviews have influenced their purchasing decisions.
Digital word-of-mouth marketing is how your customers speak about you online — in product reviews, social media posts, blog posts, and emails.
In the consumer-to-consumer commerce world we live in, digital word of mouth is how potential customers find out about your brand.
No matter what strategy you pursue, word-of-mouth marketing helps increase your social exposure, create excitement about your products or services, foster brand loyalty, and build trust.
Considering that consumers talk about brands casually at least 90 times a week, this type of marketing can have a substantial impact. Word-of-mouth marketing can help grow your business in the following ways
Think of the last time you needed a recommendation for a doctor. What’s the first thing you did? You likely asked a friend or family member who they use or posted a question on social media.
The positive experience of others becomes a key factor in your buying decision. You’re more likely to buy or use a service because you trust the feedback from your peers.
Brands and retailers can “borrow” that trust to gain new customers with minimal effort.
When it comes to building trust and loyalty, businesses need all the help they can get.
According to HubSpot Research, 65% of people don’t believe advertisements and 71% don’t trust sponsored social media ads.
Yet people do trust their peers. 88% of consumers regularly consult online reviews from other shoppers to help make confident buying decisions. Since the information comes from actual customers — not the company — word-of-mouth marketing helps build a strong, loyal community.
The more businesses can encourage or make it easy for happy customers to share their experiences, the better. As loyal followers talk to others, those individuals get excited, become customers, and tell more people — creating an ongoing source of word-of-mouth advertising.
When you consider that about 65% of sales are from existing consumers, you want to ensure that you’re keeping your loyal base happy and making it easy for them to spread the word about your company.
People can’t buy from you if they don’t know about your business or products. Therefore, getting the word out about your business organically, especially new products and services, is essential.
Word-of-mouth marketing is a perfect way to make people aware of your brand and what you have to offer.
Sometimes word-of-mouth advertising can catch hold, especially on social media. This excitement can quickly spread among your ideal audience causing a powerful viral effect.
There’s two ways to increase the influence of word-of-mouth marketing: organic and amplified.
1) Organic word of mouth
Organic word-of-mouth marketing occurs naturally. Customers freely talk about your brand, service, or product. This can occur online, over the phone, or in person. Examples include reviews, ratings, social media comments, or conversations in the checkout line.
It’s unlikely you can control consumer conversations in the street. But these conversations are also happening in the reviews, social posts, and other forms of user-generated content (UGC) shoppers are creating about your brand — you just amplify their voices across your e-commerce site and beyond.
You can syndicate product reviews and display them across all your customer acquisition channels. Or you can browse your tagged posts on Instagram and take the photo of a customer happily sporting one of your products and feature it on your product pages. Featuring this UGC can increase average order value by 15%.
2) Amplified word of mouth
Amplified is when companies offer rewards, affiliate programs, freebies, discounts, contests, or they partner with influencers.
The goal is to motivate people to talk about their experiences. Example: A business may receive more entries to a contest if they tell others about the competition on social media.
These types of word-of-mouth marketing strategies can be easier to track than organic ones, but they require more effort from your team.
Now that you know how word-of-mouth marketing works, here’s six ways you can use it to increase engagement and boost sales.
Whether you use them to generate awareness about a new product launch or a subscription service, referral programs are designed to get your customers talking.
Additionally, a referral or loyalty program that’s created with your ideal audience in mind can build trust by showing customers you care about their needs and interests.
Before launching Girlfriend Collective, the brand decided not to use paid ads. Instead, they launched a referral program that allowed people to get a free pair of $80 leggings by sharing a referral link on Facebook.