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Word-of-mouth marketing: How to unleash the power of referrals

Posted by Tasnim Ahmed

September 28, 2022    |     6-minute read (1065 words)

Consumers today are increasingly inundated with ads and branded content across media channels — TV, radio, podcasts, newspapers, websites, social media and beyond. And with the pervasiveness of advertising content, more people are experiencing what has been dubbed “ad fatigue.”

According to HubSpot research, 91% of individuals think ads are more intrusive than they were two or three years ago, 87% feel there has been rise in the number of ads in general, and 79% think they are being tracked through retargeted ads. This shows marketers are burning a lot of cash on advertising, but consumers are becoming increasingly weary.

Statista estimates that global spending on advertising will reach $781 billion in 2022 and $885 billion in 2024. But how do brands justify this level of spending in terms of its efficacy at capturing or regaining consumers’ attention? 

Word-of-mouth marketing or WOMM, sometimes also referred to as word-of-mouth advertising, is an underused and affordable marketing channel that is substantially more impactful than traditional ad spending. When you succeed in impressing your customer to the point where they spread the word among friends, that’s WOMM. 

According to statistics compiled by ThriveMyWay, 88% of customers place more faith in their friends and family when it comes to trusting a brand, and 92% of customers worldwide trust user-generated content and online word-of-mouth more than advertising. Further, word-of-mouth marketing accounts for 13% of all sales and $6 trillion in annual consumers global spending, ThriveMyWay found.

Although word-of-mouth marketing could be your best chance of winning consumer trust and loyalty, keep in mind that on the flip side, consumers won't hesitate to criticize your brand when it delivers a poor experience. It may seem like word-of-mouth conversations are out of your control and could even backfire, but there are a few tactics that you can implement to drive organic, positive dialogue. 

Ways to leverage word-of-mouth marketing include:



User-generated content


Consumers trust user-generated content more than advertising. Although you need to actively promote your brand by curating user-generated content, try to avoid coming across as aggressive or pushy. Encourage customers to create content through referrals, loyalty programs or contests with giveaways where you ask them to share their images or videos showcasing or using your products with your branded hashtag. Give them credit by tagging them in your posts and keep resharing their content. 

Influencer marketing


Influencers can shape the purchasing decisions of followers who deem their word as credible. Identify influencers that are relevant to your brand and share your products for free to review. You may want to try collaborating with micro-influencers who have a smaller number of followers but who are considered industry or subject matter expert in their niche. Micro-influencers tend to build more solid connections than conventional influencers.

Not every influencer will share a review. Some need to truly believe in your product to share a review. But if your product or service can solve a real-life problem, it’s much more likely to resonate. Additionally, associating your brand with a particular cause in which they are interested also can effectively boost influencer support. Separately, if your budget permit, you could hire a brand ambassador to be the face of your brand and speak about it regularly to ignite consumer interest. 

Employee advocacy


If you only publish content from your official brand account, most of your audience will comprise existing followers. But you can expand that network through your employees. The advantage of a good employee advocacy strategy is it raises brand awareness and amplifies messaging. Employees will not only share positive feedback and experiences, but also endorse the brand’s products and services in their social circle.

Social media


Imagine being the brand that receives the most retweets … that would be a major accomplishment. But this feat only become possible if you are proactive on social media. Keep the conversation going on social platforms by using different approaches to engage with followers. Consider incorporating customer reposts, such as retweets and regrams, into your content calendar to show that you value customers’ opinions and feedback.

Customer reviews, ratings and testimonials


Reviews are a highly effective form of WOMM. In a December 2020 Statista survey of online customers in the U.S., 94% of respondents said that positive reviews made them more apt to frequent a business. Using emails, surveys and whatever other sources you have available, post genuine customer reviews about your business in multiple mediums, including social media, your brand website, online marketplaces and other review websites such as Google and Yelp. 

Campaigns


What better approach to start a conversation with consumers than to run a campaign that sparks excitement? As an example, consider Dropbox’s WOMM campaign in its early days. The company attracted a massive amount of referral traffic with the promise of free storage space. New customers and the people who referred them received 500 MB of extra storage space. Customers could earn more space by referring more people, fostering loyalty. 

Dropbox understood the most important referral criteria of all — relevance. Instead of giving out T-shirts or mousepads, the company gave users greater storage space, which is what they originally signed up for. Dropbox also used an intuitive user interface and riveting content to make the referral process as simple as possible. Users had the option to increase their account space as soon as they signed up by referring friends directly (SMS, messenger apps, email, etc.) or via social media sharing. People got more storage, and the product became more desirable in the eyes of consumers.

Today, referral marketing has emerged as a preferred strategy for e-commerce brands aiming to increase sales while lowering their cost per action. Rewards could range from freebies, discounts, gift cards or coupons to cashback.

Exemplary customer service


Businesses that provide exceptional care to customers will elicit their spontaneous affection in return. Part of delivering an exceptional client experience includes selling high-quality products that people want to own. Remember that your positive reputation can only be enhanced by speeding up response time and by providing personalized customer service. Your responses showcase your brand voice while also conveying that you value customers.

The takeaway



An effective WOMM strategy can help cement customers’ loyalty while building out a network of brand advocates. So, keep participating in conversations with customers, pay attention to what they have to say and ensure the experience your business offers is consistent with your branding.

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