Word-of-Mouth and Referral Marketing Blog

Word of Mouth Marketing: How To Build a Strategy That Works

Word of mouth

The last time I purchased something online, I purchased the starter pack of these produce bags by The Swag.

My boyfriend’s sister had some and said they were amazing, kept her produce fresher for longer, and were super eco-friendly too.

That’s really all it took to convince me and within a few minutes (and clicks), I had dropped $60 on 4 of those bad boys.

That’s the power of a personal recommendation.

And as a business owner, that’s the kind of marketing you want behind your brand.

That is the core of word of mouth marketing and is the marketing strategy that you should be using right now.

In this article, I’ll break down exactly what word-of-mouth marketing (aka WOM marketing) is and share a few convincing stats on its efficacy. Then I’ll get down to the nitty-gritty and walk you through how to set up WOM marketing for your ecommerce business.

What Is Word-of-Mouth Marketing?

Word of mouth marketing, often called word of mouth advertising, is a marketing strategy based on personal recommendations. It has been around since the beginning of time, though in traditional marketing, these recommendations were genuinely given by word of mouth.

The difference between traditional WOM advertising and word of mouth advertising today is the lightening speed at which personal recommendations can be shared online.

Especially through social media.

Now, much of these personal recommendations come from an influencer on social media, an online review, or a happy customer simply sharing their positive experience.

And when done correctly, it can have massive effects (more on that in a minute).

Helpful Resources:

How Is WOMM Different From Referral Marketing?

WOM marketing heavily relies on the consumer to spread news about your brand or products. Referral marketing, on the other hand, provides a direct incentive to the individual to share your brand or product with their friends and family.

Where referral marketing targets loyal customers, WOM marketing targets the entire addressable audience.

This is often done through viral marketing and influencer marketing, where you’ll see brands launch trendy campaigns with brand advocates in hopes of spreading brand awareness across the masses at lightning speed.

How Reviews Affect Word Of Mouth Advertising

If viral marketing seems a bit overwhelming, especially if you’ve never even opened a Twitter account, then you’ll be happy to know that it’s not the only word of mouth marketing strategy that you can use.

A good, old-fashioned online review will do the trick.

In fact, 90% of consumers search reviews before purchasing a product and 86% of consumers trust word-of-mouth recommendations.

Given that we live in a digital age, online reviews and ratings serve as modern personal recommendations.

It doesn’t end there, though.

Once one person chooses your product based on those online reviews and given they’ve had a positive experience, up to 59% of those happy customers will tell their friends and family about it as well.

And considering that it takes just 1,000 customers to generate half a million conversations about a brand, those customer reviews are a massively important part of the foundation of your WOM marketing strategy.

Other Types of Word-of-Mouth Marketing

There are a lot of different ways to run word-of-mouth advertising, from using social media to encouraging customer referrals. The main idea behind all of it is to get the good word out about your brand or product. These are some of the most successful word-of-mouth strategies:

  • Buzz Marketing or Viral Marketing – Buzz marketing, also known as viral marketing, uses creative content to generate excitement about a brand or product that is about to launch something new.
  • Content Marketing – Content marketing, and more specifically, blog marketing, allows bloggers and digital platforms to share about your product. Depending on the blog or platform, readers can learn about your product and be influenced to make a purchase. And if not, content marketing is an important part of raising brand awareness and building SEO for your site.
  • Social Media Marketing – Social media marketing and influencer marketing rely on super popular social media accounts to share about your product or service.

Why Is Word-of-mouth Marketing Important?

So far, I’ve talked a lot about how the praise from a happy customer can influence the purchasing decision of a potential customer.

But it does a lot more than that.

Word of mouth marketing can not only help you get new customers, but it can also boost sales with existing customers too.

1. Brand Loyalty Is Cheaper Than Finding New Customers

It is five times more expensive to get a new customer than it is to keep an existing one. By increasing your customer retention by just 5 percent, you can increase your profits by 75 percent. Customers acquired through WOMM spend 200% more than the average customer and make twice as many referrals themselves.

And the way to keep existing customers shopping in your online store is by giving them a positive experience that they can’t help but rave about.

2. Brand Trust Is Cheaper Than Placing Ads

Considering that 94% of people skip pre-roll ads yet a consumer is up to 50 times more likely to buy a product if it’s recommended by close friends or family, it’s safe to say that many marketing executives are wasting their cash on paid advertising.

It’s true.

Global market research firm Nielsen found that 92% of consumers trust word-of-mouth recommendations from friends, far more than any other sources, including online opinions (70%) and editorials (58%).

word of mouth marketing strategy

In a survey across five continental markets, Nielsen also found that most consumers (83%) not only trusted word of mouth and recommendations but were equally likely to take action based on word of mouth.

McKinsey identified word of mouth as the primary factor behind 20-50% of all purchasing decisions. Word of mouth was the leading factor across the stages of awareness, consideration and purchases in the customer journey.

Helpful Resources:

8 Steps to Create A Solid Word-of-Mouth Marketing Strategy

Okay, so we know that it’s cheaper to keep a happy customer than to find a new customer and we know that a satisfied customer is at the core of your WOM marketing campaign.

So how do you mobilize those happy customers into sharing about your brand or product?

Before you get into different word-of-mouth marketing tactics, it’s important to lay a solid foundation. Here are 8 steps to setting up your business with a firm WOM marketing strategy.

1. Offer a Quality Product That Solves a Problem

The first, and perhaps most overlooked, step in a word-of-mouth marketing strategy is to actually have a product or service worth bragging about. No marketing campaign can outlast a bad product or experience, so be sure that what you’re offering is something that your potential customer will actually like.

This is where customer reviews can prove to be doubly powerful. Not only will they serve as social proof if the customer leaves a positive review, but it will also inform you of any potential barriers to success if they leave a poor review.

And if you don’t want to wait to amass enough reviews to know whether or not the products you offer are good quality, then test them out for yourself.

Then, ask yourself these questions:

  • Is this easy to use?
  • Does it significantly improve my day-to-day life? How?
  • Will I continue to use it? Why or why not?
  • Would I recommend it to my friends? Why or why not?
  • How could this experience be improved?

Intimately understanding your product will help you better understand your target audience as well as improve your word-of-mouth marketing campaign.

2. Provide Impeccable Customer Support

Another crucial aspect to consider when beginning your WOM advertising campaign is that even if you have the most amazing product ever BUT your brand is a pain in the ass to deal with, customers will not return to shop with you.

And they will not recommend your brand or products to others.

After all, there are over 7 million online retailers in the world. Surely at least one of them sells the same products that you do. And if they provide better customer support to their current customers and those happy customers share their experience in a positive online review, then you can expect your potential customers to go to them instead of you.

If your customer service is good enough, then your customers will be more than happy to talk about it.

3. Make an Easy and Seamless Purchase Experience On Your Online Shop

One of the easiest ways to convert a potential customer into a satisfied customer is to make the purchasing process as easy as possible.

Seriously… think about it.

Think about the last time you were stuck in traffic. All you had to do was get from point A to point B. And when the traffic was so unbearably bad that it turned your mood sour, it didn’t affect your feelings about point B.

But you likely won’t take that route again (or at least not at that time).

And your store is like that route. So don’t provide any roadblocks along the way.

To improve the customer experience while shopping on your site, take a look at these factors:

  • website layout and how aesthetically pleasing it is
  • site speed and page load time
  • shopping cart design and how many steps there are to checkout
  • site architecture and how easy it is to find the products that customers want
  • general conversion rate optimization tricks that can be used throughout your website

Why is this important?

Because a good website design can increase your conversions by up to 400% and a whopping 93% of consumers say that good design influences their purchasing decision.

So, yeah. Clean that website up.

4. Ask For Reviews And Ratings (And Then Share Them)

I know that WOM advertising sounds a little like black magic, as if when you provide a good thing then everyone will go raving about it.

Unfortunately, that’s not always the case.

So you gotta push for it a little bit by asking for reviews and ratings. While it may take a little bit of work, it’s definitely worth the effort:

  • 85% of consumers trust online reviews just as much as they trust an organic word-of-mouth recommendation
  • people read on average 7 reviews before making a purchasing decision
  • 49% of consumers only purchase products or services with a 4 (out of 5) star rating

In this way, online reviews serve as a virtual personal recommendation, so it’s worth gathering them.

people read on average 7 reviews before making a purchasing decision

If you’re unsure how to politely ask for reviews, you can:

  • send a follow-up email post-purchase offering a discount on future purchases if they leave a review
  • personally reach out with a very simple email follow-up, sharing that you’d love to know how they enjoyed the product and how you can improve
  • make it super easy (and obvious) to leave reviews on your site

Etsy has a beautiful system asking for reviews. When I purchased this cross stitch pattern one day when I was feeling especially crafty, I received this email a few days later. It’s super simple and allows me to leave a review directly from my inbox:

word of mouth

5. Encourage User-Generated Content (UGC)

With digital marketing, all you need is a good internet connection and a little bit of cash to get started.

The problem?

Millions of other people are doing it and traditional advertising can leave you bankrupt before you even make a sell.

So how do you reach your potential customer and convince them to make a purchase without paying for traditional marketing?

By letting your happy and loyal customers do the marketing for you.

For free.

This is the idea behind user-generated content (UGC) and is the modern word-of-mouth marketing strategy of most brands today.

It’s also why social media marketing and influencer marketing, in particular, have become such powerful tools for businesses.

UGC is a powerful tool in both raising brand awareness and influencing purchasing behavior. In fact, 85% of social media users say that they trust UGC more than they trust brand content or traditional marketing.

Frank Body did this exceptionally well. Their WOM strategy was so good that I first heard about it from my brother before I even saw it on social media.

And, of course, upon hearing about it, I turned to social media to check it out.

word of mouth marketing

SheThinx is another brand that does UGC really well, posting pictures of their happy customers posing in their period panties.

word of mouth advertising

If you can make it cool to share your product on social media, then your word of mouth marketing campaign is on its way.

6. Create an Official Referral Program

If you’re a bit impatient to wait for the personal recommendations to trickle out to your target audience, then you can take matters in your own hands and launch a referral program.

There are tons of referral apps out there that can help you do this, including your very own, ReferralCandy. These referral apps give a little extra push to your happy and loyal customers to spread the word about your brand.

It works by sending an automated email after purchase, offering your chosen incentive to customers if they refer a friend. When the friend makes a purchase using the original customer’s code, then the incentive is paid out.

All you have to do is choose the incentive for your program and let the app do the rest.

WOM marketing

7. Connect with Industry Influencers & Thought Leaders

Influencer marketing is incredibly powerful and you’ve likely seen all the #ads on social media already. People grow to love influencers, for whatever reason, and so they trust their recommendations on any given brand or product.

Truthfully, though, it’s quite difficult to do. It’s difficult to get in touch with an influencer that’s worth your money and it’s difficult to afford an influencer that actually has any influence.

In fact, it’s not uncommon for social media stars to charge anywhere from $5,000 to $10,000 per sponsored post, depending on how many followers they have.

WOM advertising

But it’s still a worthy contender in this list of ways to create a powerful word-of-mouth marketing strategy because, well, it works.

If you need help connecting with influencers, you can easily find thousands of them on any given influencer marketing platform, such as:

If you choose to go this route, then spend some time truly identifying your target audience and imagining the kinds of influencers that have that audience as their following.

If you need help figuring that out, Caroline Calloway, the ultimate Instagram influencer that made herself famous by basically just being herself, wrote a juicy and in-depth story about the steps she took to get there at iamcarolinecalloway.com.

She’s quite scandalous but if you really want to know how to grow a following, then read her take on how she did it instead of reading the million marketing blogs that recommend the same mundane steps as everyone else (engage! follow! make good content!).

8. Provide a Unique and Shareworthy Experience

As amazing and helpful it would be to have happy customers upload a beautiful image to their social media accounts and thoughtfully tag your brand, that’s probably not gonna happen.

At least, not without a little creativity on your part.

You’ve got to make them want to share your products with others. You can do this by offering an incentive or by making it “cool” to do so. You can do this by creating a movement or by building an authentic community online.

However you do it, you need to find a way to make their experience with your brand worth sharing. Here are some word-of-mouth marketing examples to get you started:

  1. 17 Ways That 15 Companies Got Massive Word-of-Mouth By Delighting Their Customers
  2. How To Get Word-of-Mouth: 40+ Successful Examples To Learn From
  3. How CrossFit Became A Worldwide Craze Through Word-of-Mouth
  4. 8 Ways Companies Earned My Word-of-Mouth: A Consumer’s Perspective
  5. 6 Ways Google Generated Word-of-Mouth For Their Products
  6. 8 Examples Of How Apple Generates Word-Of-Mouth All Over The World
  7. PayPal’s $60m Referral Program: A Legendary Growth Hack

Final Thoughts

There is no quick fix for word-of-mouth marketing and it’s not something you can do on a whim. Instead, it’s something to build into your existing business model so that it works for you even when you’re not spending any cash. If you follow these steps above, then you will lay a solid foundation from which your brand can grow naturally.

Marquis Matson

Marquis Matson

Marquis Matson is an SEO analyst, content marketer, and writer. She specializes in search engine optimization for ecommerce sites in the yoga and wellness niche. She lives as a digital nomad, spending time in Ecuador, California, Thailand, India, Australia, and more. You can find her on LinkedIn, Twitter, at marquismatson.com, or contact her directly at marquis@anafore.com.

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