Everyone in business knows that the best, most affordable marketing tool in the world is, quite simply, a satisfied customer. Any customer who is not only satisfied but also happy with your products or services will recommend you to others and may even become an authentic evangelist for your small business. That’s what word-of-mouth marketing is.
Word-of-mouth marketing is a powerful marketing strategy that helps grow your customer base, product line, and business based on customer experiences. But there’s a lot more to this marketing approach and its related benefits.
What is word-of-mouth marketing?
Word-of-mouth marketing is when customers share their positive opinion of your company or products. Many satisfied customers will often engage in word-of-mouth marketing by sharing their stories related to their experience with your brand. This may imply that your services helped them when they were in need or that your team assisted in increasing their growth rate.
Some common examples of word-of-mouth marketing include Yelp reviews of a local restaurant or online reviews of the latest movie or video game that people are raving about.
Word-of-mouth marketing is beneficial not only for businesses but also for people in general. Think of when you moved or switched jobs and were looking for a new mechanic or doctor. Chances are that your first instinct is to ask other people whom they trust and what they think of those providers. Mostly, folks share their good experiences and may have provided great recommendations that made your decision easier. That is the value of word-of-mouth marketing for customers—it makes life a bit easier and helps speed processes.
Why is word-of-mouth marketing so important?
Businesses across varied industries, functional in multiple geographies, have benefited from word-of-mouth marketing. Many have also implemented a specific marketing strategy to leverage the power of this technique better.
Word-of-mouth marketing benefits all businesses, but small-and-midsize-businesses (SMBs) can benefit the most from it. Most word-of-mouth marketing has little or no expense, making it an attractive option. Startups need to grab their target customer’s attention about their upcoming product launch, but they may not have a considerable budget to hold flashy marketing campaigns. So, they can leverage word-of-mouth marketing at no cost.
Effective word-of-mouth marketing doesn’t require much effort and monitoring compared to other marketing strategies. Paid social, dedicated email marketing, customer relationship management techniques, and television ads are great ways to market your products or services. However, they are much more labor-intensive than letting the customer speak for you.
Benefits of word-of-mouth marketing
If you’re still wondering how effective word-of-mouth marketing is, think of the number of times you’ve asked people for a recommendation and purchased a product or service because you trust them to suggest the best things. This is one of the most important benefits of word-of-mouth marketing—trust.
Other benefits of word-of-mouth marketing include:
- Enhance business credibility: People appreciate hearing recommendations and reviews from those they trust. This lends your business some serious credibility.
- Increase brand awareness: If people aren’t familiar with your brand, hearing positive reviews and experiences from other customers will automatically create a positive association and lasting familiarity with your brand.
- Lower costs: Every SMB owner is looking to reduce their budgeting. Word-of-mouth marketing is about as affordable as marketing efforts can get.
- Boost sales: Word-of-mouth marketing offers people a great impression of your business and may make them curious enough to purchase, even if that wasn’t in their original plan.
Examples of word-of-mouth marketing
Sweepstakes on social media platforms are great examples of word-of-mouth marketing efforts. You’ve probably seen dozens of these promotions where companies offer entry into a raffle or giveaway as long as you like their page, follow their page, share the post, and/or tag friends in the comments. While some cost is associated with whatever the business gives away, the potential return on investment is enormous.
Such sweepstakes help you reach your target audience and grow your following, immediately attract new followers, and create a splash online because you’re giving something away. It’s hard to get such results at low costs. This makes social giveaway promotions a great marketing tactic.
A related example is soliciting online reviews and offering a discount or free products/services for a lucky reviewer. You can offer a discount code to everyone who leaves a review or create a drawing/raffle/sweepstake where any customer who leaves a review within a specific time frame is automatically entered to win.
Referral programs are another terrific word-of-mouth marketing option. Many businesses leveraging this strategy offer discounts to both parties involved. For example, a coffee shop might provide a complimentary beverage to any customer who refers the establishment to a new customer. There are several options, and they are almost as varied as the number of businesses and industries you can think of.
Word-of-mouth marketing strategies
The steps and strategies involved in word-of-mouth marketing are generally a part of the marketing efforts of all businesses. However, you should focus on each step to ensure the success of your marketing strategy.
- Know your target audience: Every marketing team aiming to market its products and services should create a list of their customer personas. It is crucial to check whether your word-of-mouth marketing efforts resonate with people from different geographies.
- Know your brand: Planning a marketing campaign without details about your brand’s changing dynamics can affect your marketing strategy’s efficiency. Reviewing your products, values, and processes can speed your business growth as it’ll help you craft a marketing strategy that’ll reach the right audience.
- Know your competitors: Analyze your competitors’ moves and marketing strategy to understand where you fit in the market, how your business differs from theirs, and how you can leverage your advantages in a word-of-mouth marketing campaign.
- Identify influencers: Instead of reaching paid social influencers, you can reach out to people already making an impact because they are a trusted voice. This may include “elite” Yelp reviewers, YouTube reviewers, and content creators, but it doesn’t imply you should base your approach on any person who has a “verified” or “plus” badge next to their name, but they give you a great place to start.
- Revise your marketing strategy: Consistently analyze the output of your marketing efforts so you can make some minor modifications if required. Your marketing campaign should be able to passively or actively depend on how things work for your business.
Kick-start word-of-mouth marketing with experts
Sound like word-of-mouth marketing is the right approach for your small business?
Check out some highly reviewed marketing consultants and digital marketing experts within the UpCity network who can help you develop an effective marketing strategy.