Word-of-mouth marketing increases trust, leads, and conversions. But what is word-of-mouth marketing exactly, and how can you harness its power to grow your business?
In the age of social media and constantly evolving marketing techniques, one method still remains effective: members of your target audience talking about you in positive terms.
It’s not as though people talking about products or services is new, but in today’s digital world, the impact of strategically engaging in word-of-mouth advertising and other types of marketing can be massive.
In this guide, we’ll explore the ins and outs of the topic, including its advantages and best practices, and also look at effective ways to implement your own word-of-mouth marketing strategy. Learn how to turn your happy customers into loyal brand ambassadors.
- Word-of-mouth marketing involves happy customers positively speaking about a business to others without any form of coercive incentive.
- Word-of-mouth marketing works because it builds trust, costs less than other marketing tactics, and can increase both your sales and customer loyalty.
- Methods include employing user-generated content (UGC), influencer marketing, referral marketing, and customer experience marketing.
- Social media is crucial for encouraging positive word of mouth and leveraging its benefits.
- To measure the success of your efforts, track social media engagement metrics, online reviews, and customer retention data.
- Despite some drawbacks, such as a lack of messaging control, word of mouth tends to be a highly successful marketing technique with long-lasting results.
- Word-of-Mouth Marketing Definition
- Why Word-of-Mouth Marketing Is Effective
- Word-of-Mouth Marketing Strategies
- How to Encourage Word-of-Mouth Marketing on Social Media
- Measuring the Success of Word-of-Mouth Marketing
- Word-of-Mouth Marketing Best Practices
- Challenges and Limitations of Word-of-Mouth Marketing
- Final Thoughts
Word-of-Mouth Marketing Definition
Word-of-mouth marketing involves happy customers positively speaking about and referring a business to others without any form of coercive incentive.
Businesses can leverage these organic, unpaid recommendations and conversations to promote their product, service, or brand.
However, word-of-mouth advertising is different from traditional advertising. Instead of directly promoting your company, you rely on the power of personal connections and genuine endorsements.
Examples of word-of-mouth marketing include customer reviews, posts, and comments on social media sites, blog posts, and in-person discussions.
Why Word-of-Mouth Marketing Is Effective
Word-of-mouth marketing is a powerful strategy for businesses for three core reasons: it can build trust, promote your company in a cost-effective way, and increase customer loyalty. As an added bonus, you might also be able to go viral.
Trust and Credibility
Consumers tend to trust the opinions of their friends, family, and peers more than advertisements. That makes word-of-mouth marketing a more credible source of information.
This is particularly true in today’s environment, where potential customers are constantly exposed to ads and brand messaging. They’re more skeptical of promotional messages, as the rapid rise of ad blockers and banner blindness shows.
Social proof, in which customer feedback confirms brand and product messaging, also enhances perceptions of your brand and conversions.
Compared to traditional marketing channels like TV, print, and radio ads, word of mouth is more cost-effective. When it occurs naturally as a result of happy customers sharing their experiences, it’s free promotion for your business.
Even if you implement a specific marketing campaign to foster word-of-mouth promotion, the costs are typically lower than traditional advertising campaigns.
Sales and Customer Loyalty
Finally, people talking about your business positively helps increase sales and attract new customers.
Through both organic social media posts and more intentional efforts, you can ensure your brand and products appear in more online conversations. Over time, this builds the brand recognition and credibility you need for your audience to pull the trigger.
In addition, word-of-mouth marketing tends to generate more loyal customers, allowing you to generate higher retention rates and more repeat business.
Viral marketing is, in many ways, the white whale of content marketing. It occurs organically, with few indicators you can mold into a formula of how to repeat it. Most brands that build their business model around it fail.
That said, social media marketing focused on word-of-mouth strategies can increase the chances of a message going viral. The more customers are willing and ready to talk about you, the more likely your content is to go viral and reach new audiences.
Word-of-Mouth Marketing Strategies
Organic word-of-mouth marketing takes place without your influence, but specific strategies can help you guide the conversation and maximize its potential.
The most common strategies include:
- Influencer marketing
- Referral marketing
- Customer experience marketing
User-generated content describes any content that customers create (rather than your company). UGC is a highly effective marketing strategy because it showcases genuine experiences and opinions from satisfied customers.
Users might share a wide range of content, including:
- Blog posts
To encourage user-generated content, prompt customers to share their experiences on social media platforms, consider hosting contests, or provide incentives for customers who create content about your brand.
Influencer marketing involves partnering with relevant users with a sizable following and credibility in your niche or among your audience to promote your products or services.
This is a powerful option because it taps into the natural social instinct to trust those we consider experts in an area of interest. Having a relevant influencer as a brand ambassador can build loyal fans and even drive media exposure.
To make influencer marketing a successful word-of-mouth marketing strategy, choose influencers who align with your target audience and genuinely believe in your offerings to ensure authentic and effective messaging.
Referral marketing focuses on rewarding existing customers for recommending your company to others. It usually involves formal referral programs that encourage loyal customers to share their experiences with family members and friends.
For your referral program to work, you’ll need to offer incentives, such as discounts or free products, to current customers who bring in new business. If successful, you can generate a steady stream of new customers and strengthen the loyalty of your existing customer base.
Customer Experience Marketing
Customer experience is at the core of word-of-mouth marketing. You need to build social currency by delivering exceptional products and services coupled with outstanding customer support.
Focus your entire buyer’s journey on customer experience. Every touchpoint with your company should be a positive experience.
Be responsive to any messages on your social media account, and address negative comments and reviews promptly and proactively. Encourage users to engage with you and react to their feedback openly and transparently.
How to Encourage Word-of-Mouth Marketing on Social Media
Though traditional word-of-mouth marketing has existed as long as businesses have, social channels like Facebook, TikTok, and Instagram now play a significant role in modern word-of-mouth marketing.
Here, your audience has a platform to easily share their opinions and experiences about a product or service with their network, amplifying their reach.
Here are some ways you can capitalize on these channels:
- Engage with customers by responding to comments, messages, and reviews and proactively sharing content that resonates with your audience.
- Share UGC, such as customer photos or testimonials, to showcase authentic experiences with your brand.
- Partner with the right influencers to create sponsored content and expand your reach to a new audience.
- Share insider knowledge with select audiences to bring them into the loop and make them more likely to share content on your behalf in the future.
Measuring the Success of Word-of-Mouth Marketing
To ensure the effectiveness of your efforts, you’ll need to measure their success. These tips can help you get started:
Track Relevant Social Media Metrics
Keep track of your social engagement and reach to understand how well your word-of-mouth marketing efforts are performing. Key metrics to consider include likes, shares, comments, and the number of followers on your social media accounts.
Monitor Online Reviews and Review Sites
Regularly check your customer reviews on platforms like Google Business Profile, Yelp, or industry-specific review sites to assess the overall sentiment about your brand. Respond to positive and negative reviews to improve customer satisfaction and foster positive word of mouth.
Analyze Sales and Customer Retention Data
Monitor your sales data to gauge the impact of your word-of-mouth marketing efforts. You can also analyze customer retention and loyalty metrics to understand how well you’re building long-lasting relationships with your customers.
Word-of-Mouth Marketing Best Practices
These best practices can help you guide the conversation about your company online and ensure that any word of mouth you engage in aligns with your business goals.
Provide and Promote Quality Products and Services
As noted earlier, the foundation of successful word-of-mouth marketing is delivering high-quality products and services. Otherwise, conversations around your business online won’t be positive.
Consider surveying customers frequently to understand their needs. Ask about improvement opportunities and how likely they are to recommend your product or service. Then, strive to exceed their expectations.
Deliver Exceptional Customer Service
From timely responses to addressing any issues promptly, excellent customer service is essential for driving positive word of mouth. Consumers trust companies they know to be responsive as they make their purchasing decisions.
Customer service tools can help ensure customers receive quick, accurate, and helpful assistance. For example, live chat and chatbot technology allow you to respond quickly to inquiries, questions, concerns, and any other forms of feedback.
Positive customer reviews, photos, and videos can be great drivers of word-of-mouth marketing. Provide incentives and rewards to customers who share their experiences with your business on social networks and review sites and with their friends and family.
Partner With Relevant Influencers
Influencers are a powerful form of word-of-mouth marketing because your audience already trusts them.
Find influencers who align with your target market and have a genuine interest in your offering and work with them on a content strategy to promote your brand and encourage conversations among their followers.
Monitor Metrics and Analyze Your Data
Track your social media metrics, customer reviews, and sales data regularly to stay updated on your performance.
Analyzing this data can help you identify areas for improvement and develop more successful tactics over time. For example, you can determine whether it’s better to spend your time and resources on influencer marketing strategies or a referral program.
Challenges and Limitations of Word-of-Mouth Marketing
Word-of-mouth marketing offers plenty of advantages, but its challenges and limitations are also worth keeping in mind as you build your strategy.
Difficulty in Controlling the Message
One of the downsides of relying on word-of-mouth marketing is you’ll have less control over the message. Even if you can guide it, you’ll still be at the mercy of your audience.
Some customers may just not want to talk about you. At its worst, negative word of mouth can even damage your reputation. An active strategy to engage with your audience is crucial in any type of word-of-mouth effort.
Time and Effort
Generating positive word of mouth takes time and requires consistent effort. You won’t see instant results, and it usually takes longer than other marketing efforts.
You’ll need time to provide excellent customer experiences. Strategies like referral marketing and influencer engagement require significant planning. Patience is key as you look to unlock the long-term benefits of this approach.
Word-of-mouth marketing helps boost confidence, loyalty, and sales. Now that we’ve answered the question, “What is word-of-mouth marketing?” you know it’s a free marketing tactic that can pay dividends.
To be successful, your strategies need to be targeted. But if you get it right, you can build loyal customer bases, increase sales, and foster genuine, authentic connections with your audience.
With patience and persistence, word-of-mouth marketing can deliver significant long-term benefits for your business.
Barbara Lawson is a marketing writer with over ten years of experience teaching marketing at a university level. Her content is backed by extensive research, and her expertise in the field is invaluable. Living in the beautiful city of Burlington, Vermont, Barbara enjoys practicing yoga to stay centered and focused.