Despite the proliferation of artificial intelligence, data science, and advanced marketing automation technologies, word-of-mouth marketing has — and always will be — the most effective form of marketing.

We’re all more inclined to believe an endorsement from a trusted friend or colleague than from a random person on the internet (much less from an advertisement).

Taylor Swift is a perfect case study of the power of word-of-mouth marketing.

The American singer-songwriter didn’t build her estate by selling one album at a time. She found success by nurturing relationships.

Swift occasionally sends flowers, special event invites, and gifts to her fans.

The ripple effect is that those fans don’t just buy her album. They become diehard evangelists.

Even more telling, the fans don’t just buy a single album.

During the promotion of her 1989 album, each physical disc case contained five imitation polaroids with artwork and lyrics written on them. The catch is that there were 65 potential polaroids, meaning each album had a unique combination of collectibles.

You can guess what happened next: hardcore fans bought her album multiple times in an effort to collect every polaroid. As a result, Swift sold a staggering 1.27 million in 7 days.

Quite impressive.

Even though her marketing strategy was well-thought-out, it wouldn’t have been successful if Swift didn’t have a loyal fanbase.

The stats below validate the strength of word-of-mouth marketing and serve as an eye-opener for any business seeking to drive sales and create a horde of loyal customers.

• Nearly 93 percent of customers trust their friends and family’s opinion when purchasing products and services (Kantar)
• 83 percent of customers are willing to refer their friends to a brand after a positive experience (Texas Tech University)
• Prospects are 4 times more likely to buy when referred to by their friends (Invespcro)
• Word-of-mouth marketing generates two times more sales than paid ads (McKinsey)

In this article, we lay bare everything you need to know about WOMM and how you can use it to reach more customers and improve your bottom line.

Let’s dive in.

What is Word of Mouth Marketing?

Word-of-mouth marketing, as the name suggests, relies on your existing customers to generate discussions about your brand and recommend it to their network.

It truly is the most proven and ancient form of marketing. Before email marketing, before direct mail, and even before the printing press, businesses relied on word-of-mouth marketing to flourish.

For clarity, word-of-mouth marketing isn’t the same as word-of-mouth advertising.

While the two can generate the same results, the latter is a paid form of advertising. You can, for instance, pay an influencer or individual to champion your brand.

With word-of-mouth advertising, you can control the content pushed out by other people. WOMM, on the other hand, is a form of free advertising triggered by your buyer’s feelings, thoughts, and impressions.

What are the Benefits of WOMM?

Word-of-mouth marketing isn’t easy to earn. It can take months of reliable service and reputation-building to turn a customer into an evangelist.

However, the benefits are unrivaled by any other marketing channel. Let’s go over a few of them.

It Encourages Customer Loyalty

Word-of-mouth marketing is one of the surest ways to create customer loyalty. Statistics show that 65 percent of your sales will come from your repeat customers.

And, by having customers that can vouch for your products, you’ll have a group of loyal repeat customers.

Not to mention the fact that the cost of acquiring a new customer is five times more than retaining an existing one.

Most humans don’t like change. When we find a plumber we like, we stick with that plumber. When we find software that helps us do our jobs better, we stick with that company.

WOMM takes advantage of our cognitive biases and reluctance to change course.

It Promotes Brand Affinity and Trust

Back in the ’80s, before modern-day video game consoles, gamers would have to go to arcades to get their gaming fixes.

If you’ve ever been to an arcade, you know it’s loud — very loud. Each machine is buzzing and beeping and practically screaming, “play me!”

This is no accident. Arcade cabinet manufacturers knew the loudest, most abrasive game was likely to garner the most attention from patrons (and thus, the most quarters).

The internet is the same way today. From the moment we look at our phones or computers, companies are screaming for our attention.

Social media feeds are littered with ads, YouTube videos have unskippable “commercials,” and banner ads cover almost every news site we visit.

WOMM is one of the few marketing channels that cut through all that white noise.

A powerful endorsement from a friend or colleague hits a different part of our brains than video ads and recommendations from strangers.

If other people talk highly of a product from their own experience, it cements the brand as trustworthy in a way no other marketing channel can.

It Builds Organic Communities

WOMM has the power to organically unite customers who all share an affinity for a product or service. The best part? This can often happen without any intervention from the brand itself.

Facebook Groups are an excellent way to see this in action. For example, there’s a group for Yamaha Drummers, Salesforce Developers, and Dewalt Powertool Owners.

The crazy part is that these brands had zero involvement in forming these communities — other than creating the products that made them possible.

These groups were formed entirely by word-of-mouth marketers who wanted to connect with like-minded brand enthusiasts.

The result are these vibrant communities of fans who encourage deeper adoption of the products, help resolve issues, and keep the brand top-of-mind.

Most organizations would pay top dollar for this kind of advertising, but these brands are getting it for free thanks to word-of-mouth marketing.

It Help Reach the Older Generations

Believe it or not, some folks still don’t buy things online.

With the internet user base just above 59 percent of the population worldwide, billions of prospective customers don’t rely on the web to research, peruse or shop for products.

Word-of-mouth is a perfect strategy to reach this group of prospects, who are, in most cases, the older generations.

Interestingly, 18 percent of Generation X discover products and services via word of mouth compared to 12 percent of Gen Z and 16 percent of Baby Boomers.

What Factors Can Affect WOMM Effectiveness?

The success or failure of your word-of-mouth marketing campaign is dependent on several factors. These are:

Brand Loyalty

The level of loyalty your current customers have for your brand will determine how often they’ll recommend your product or services to their peers.

The more loyal your customer base is, the higher the likelihood of recommending your brand. And once other customers are referred, they refer their friends, and the cycle goes on.

Brand Trust

According to HubSpot data, 75 percent of shoppers don’t trust advertisements, but 90 percent believe recommendations by their family and friends. 70 percent of prospects trust customer reviews.

Because would-be shoppers trust people more than friends, leveraging WOMM can bring better results than paid advertising.

It also implies that prospects who get to know about your brand via WOMM are more likely to spend their cash on your products.

Product Quality

It is almost impossible to find success in word-of-mouth marketing if your products are substandard.

Obviously, customers will only recommend a product if their experience is positive. So, if consumers have nothing good to say about your product, you can be sure that they won’t vouch for it.

Inversely, those once-promising advocates can become detractors, which is equally as impactful to your brand reputation (in the opposite direction).

You’ve probably heard something similar to this from a friend: “I used to love their service, but ever since new management took over, they’ve really dropped on the ball on quality. I can’t even recommend them anymore.”

Think of how much weight that long-time customer holds with their personal network! Poor product quality or customer service can quickly flip the script and significantly hurt your business reputation.

Website User Experience

Prospects are looking for a seamless order process and user experience when they land on your website.

Want to know how crucial providing a good user experience is to converting leads?

Check out the stats below:

• 53 percent of mobile visitors will abandon a webpage if it takes more than 3 seconds to load (Google)
• 50 percent of customers will abandon their carts if the pages are slow (YOTTA)

This is especially relevant for eCommerce businesses that don’t have a physical storefront.

Your website user experience is your lifeblood, and it can not only be the difference between a sale or a missed opportunity, but a promoter or a detractor.

Customer Service

You can’t have a lousy customer desk and expect customers to recommend your brand. In fact, 65 percent of customers will stop engaging with your brand after a single poor encounter.

The effectiveness of a word-of-mouth marketing campaign goes hand in hand with a great customer experience.

When consumers consistently enjoy top-notch customer service with your brand, they won’t have a problem telling others about and encouraging them to buy from you.

The truth is that most customers are “lukewarm” on your brand until they have an issue that necessitates a customer service call. Then, based on your response, they can either become your biggest fans or your biggest detractors.

In fact, your company should view customer service issues as an opportunity to prove your worth. Most detractors can be won over and turned into lifelong promoters with great customer service.

I still remember customer service conversations from years ago where the representative solved my problem and even went above and beyond to keep me happy. Those things stick in your customers’ minds and deeply impact their cognitive loyalty to your brand.

General Authenticity

A study by Stackla involving 1,590 consumers found that 90 percent of the participants regarded authenticity as crucial when deciding which brands they like and support.

General authenticity revolves around integrity, truth, purpose, and passion. It should be the core of your business that you want to connect with your consumer base and earn referrals.

Authenticity is more than your brand’s mission statement — it means letting your core values permeate every facet of your business. It means making the “why” behind your company abundantly clear.

The more authentic you are to your customers, the easier it is to convince them to refer your brand to others.

Word of Mouth Marketing Strategies

One of the reasons word-of-mouth marketing is so effective is because the barrier to entry is so high. There really is no official blueprint on how to change people’s minds into loving your brand.

However, if you study some of the best brands with a robust community of evangelists, you can reverse-engineer their success. You can look at the tactics that they used to achieve success and emulate them in your own business context.

At the end of the day, it won’t be any single one of these tactics that magically create a thriving community of promoters. But all of them working in tandem will go a long way in creating positive customer experiences that result in powerful word-of-mouth marketing.

Make User Experiences Memorable

One proven tactic to get people talking about your brand is to offer an experience worth sharing.

Unique and great experiences spark conversations among your customers and, most importantly, make them want to share with their friends and family even without any formal prompting.

Hidden Crown is a good example of a beauty brand excelling in creating a memorable experience for its customers. They offer to help their customers with color-matching hairstyles through an interactive portal that allows prospects to submit photos of their hair.

From there, a color expert will personally contact them to make a recommendation on how best to color their hair.

Create Unique Content

You can power your word-of-mouth marketing campaign by creating content that stands out. People want valuable, unique content to make informed buying decisions.

While blogging is still incredibly valuable (otherwise, we wouldn’t be writing this), far and away, the most shareable content is video content.

In fact, according to HubSpot, 83 percent of people are more likely to share video content with their friends than any other type of content.

This is all the more relevant as social media platforms like Instagram and Facebook favor video content over text content in users’ feeds.

Warby Parker and Dollar Shave Club are good examples of brands that have perfected the art of making unique video content.

Use Storytelling to Captivate Customers’ Emotions

Storytelling is as old as humankind itself. We respond differently to stories than we do just pure facts.

That’s why the best brands use narrative and storytelling to capture customers’ emotions and create more interest in their brand.

The story that you tell is not about you or your company. Your customer is the hero of the story, and you are merely the guide. They are Luke Skywalker; you are Obi-Wan Kenobi.

This commercial from LEGO is a masterclass in storytelling. Rather than listing off a bunch of features of the product, they emphasize how it will impact your life — namely, it can help you create lasting memories with your loved ones.

If you can stack this strategy with the previous one (video marketing), you can create some truly impactful content worthy of word-of-mouth marketing.

Leverage User-generated Content (UGC)

User-generated content allows your customers to participate in your brand’s growth instead of being mere spectators.

When followers and customers generate content, they give a firsthand account of what it is like to use your product. Think of it as an endorsement of your brand from actual customers.

When shared with the correct market, UGC is a powerful tool to spread the word about your company and bring in converting leads.

And according to an Adweek infographic, 85 percent of users say UGC is more powerful than brand videos and photos.

You can generate user content strategies by creating unique hashtags on Instagram or Twitter, incentivizing people to share content, or showcasing user-generated content on your website.

Some brands that excel in this include Sephora and Crocs.

Share Testimonials

Up to 79 percent of consumers trust online reviews and testimonials as much as personal recommendations.

Testimonials, at their core, help support your brand’s quality, value and performance, making consumers more comfortable engaging with your brand.

Sharing testimonials enable you to generate social proof. Why is social proof crucial for your brand? Because 63 percent of customers need to hear a brand’s claim 3 to 5 times before they believe it (The Marketing Blender).

You can upload testimonials in video or written form on your website. Some good places to get reviews include Yelp, Houzz, Angie’s List, and G2 Crowd.

You can also repurpose reviews and testimonials to include on your landing pages, product pages, and marketing collateral.

Generate Product Ratings on your Website

It is always a good idea to let users leave reviews or ratings for your products or services on your website.

Product reviews are absolutely essential for eCommerce businesses as well.

If your eCommerce platform doesn’t already include a built-in review system, most platforms (such as Shopify or WordPress) offer free or inexpensive plugins that allow you to accept and store user reviews.

Without a doubt, this should be one of the first things you set up on your site.

Below are some stats that will make you want to consider product ratings as a strategy to drive your word-of-mouth campaign.

• 63 percent of prospects that land on your website are more likely to buy if you have reviews. (Chatra)
• Prospective buyers trust reviews 12 times more than product descriptions. (Econsultancy)
• Reviews can boost sales by up to 18 percent. (World Financial Review)

eCommerce stores like Amazon, BestBuy, and New Egg are good examples of brands that have perfected the art of social proof through customer ratings and reviews.

Offer Incentives

People are willing to tell others about your brand for incentives, especially if they already like your products or services. And you don’t have to spend lots of cash to get them to act.

You can, for instance, offer a gift or discount for referrals.

Payoneer is an example of a company that offers incentives for referrals. If you’re a Payoneer account holder, you can earn up to $25 for every friend you invite.

While this may fall into the word-of-mouth advertising category mentioned above, it at least starts a conversation about the brand. Plus, a customer isn’t likely to offer a referral for a company that they don’t believe in.

Run a Referral Program

Staying in line with incentivizing people to tell others about your brand, you can consider creating a referral or affiliate program.

Some of the benefits of running a referral program as part of your word-of-mouth marketing campaign include:

• Referral programs are easy to set up and manage
• Both parties can benefit from the program
• It’s easy to track and analyze a referral program to gauge its impact

You can leverage referral tools like Woobox, ReferralCandy, LoyaltyLion, and Friendbuy to set up and run your referral program.

Again, we’re talking about paying for word-of-mouth advertising, but as a means to an end. These tactics can act as kindling to start the fire of a totally organic community of advocates.

Connect with Influencers

According to a survey conducted by Twitter in conjunction with Annalect, 49 percent of people say they consult influencers before buying. On top of that, 73 percent of marketers say they’ve created a budget for influencer marketing.

This data implies that getting your brand or products talked about by influencers can be an excellent way to leverage the power of word-of-mouth marketing.

Start Social Media Conversations

Social media is an excellent place to hype up your products, especially before launch.

Some of the ways you can create excitement about a new product or brand on social media include:

• Creating hashtags to get your target market excited.
• Telling a compelling narrative about your product to get people talking before it hits the shelves.
• Giving a sneak peek on platforms like Instagram and Snapchat to give people a reason to look forward to the new product.

Social media boasts over 3 billion users worldwide. That’s a huge opportunity to showcase your brand to a massive market.

Monitor and Respond to Brand Mentions

Whether you’re a startup or multinational investing hundreds of dollars into social media presence, it is crucial to monitor what people say about you in social circles.

Every time your brand appears in other people’s Instagram Stories, Tweets, or comments, it counts as a social mention.

The more you make social media a dialogue with your followers, the more ownership they’ll feel as your customers.

The Bottom Line 

Word-of-mouth marketing is arguably the most powerful form of business generation because:

1. It cuts through the noise of social media and the internet
2. It’s exceptionally hard to achieve, which is why only the best businesses do it well.
3. It’s extremely cost-effective, especially when it’s self-perpetuating.

But as we’ve explored, there’s no simple blueprint to turning customers into raving evangelists overnight. It’s a slow, methodical process. It takes years of positive customer experiences, stellar customer service, and an amazing product or service to make it happen.

However, some of the tactics we’ve discussed in this post can jumpstart that timeline for your business and help you build a community more efficiently.

For more info on generating traffic to your eCommerce site, check out our post on the topic here.

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SkuVault is an all-in-one inventory management platform that automates redundant tasks and helps you streamline your entire eCommerce pipeline.

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