Two people holding speech bubble with WORD OF MOUTH MARKETING concept

From giving business gifts to key clients to referral programs, there are a lot of ways you can facilitate word-of-mouth marketing. Before you take concrete steps or invest in word-of-mouth marketing, though, you need to understand its value and implications for your startup or business.

The following is a modern, 2022-updated guide to word-of-mouth marketing.

What Is Word-of-Mouth Marketing?

Word-of-mouth marketing, or WOM, is when a customer’s interest in your product or service is reflected in the way they communicate with other people. It’s like free advertising, with the trigger being customer experiences. In order to trigger customers to talk about your business in an organic and favorable way, that means you’ve likely had to do something that went well beyond their expectations.

WOM marketing is organic, but you can encourage it.

This form of marketing is happening specifically when consumers are talking about your products or services to people they have a close relationship with. These people can include their family, friends, and coworkers.

Around 88% of consumers say they trust the recommendations of people they know over traditional media, making WOM marketing the most powerful form of advertising.

Sometimes, you’ll hear people actually draw a distinction between WOM marketing and natural references to your products or services. The reason is that many businesses engage in something known as seeding, where they’re encouraging or influencing WOM marketing.

The Benefits

There are a number of strategic benefits of WOM marketing, including:

  • You’re building a strong and potentially long-term relationship with your customers. You can build trust between your brand and your customers, which has to exist for the success of your business. Then, you’re boosting the confidence of your customers as they do business with you. It’s much harder to sell to someone who doesn’t trust you. When you develop a WOM marketing strategy, you want to get personal with customers. For example, if you’re the owner of the business, maybe you take time out to regularly have conversations with your customers. This shows them that you care about them personally. Customers who know you care are inevitably going to share this with other people in person and online. It can take time to build trust like this, but it also pays off.
  • WOM marketing is advantageous compared to other forms of marketing because it’s cheap. In reality, WOM marketing can be free, and all you need to do is ensure all the pieces are in place.
  • WOM marketing is scalable, including in the short term.
  • Trust drives consumer decision-making. We’ve already repeatedly talked about trust, but it’s the core advantage of WOM marketing. Consumers trust the recommendations and judgments of others. While we might think about this sense of trust occurring between people who already know each other, like friends and family, consumers also trust what they read from other people online. Consumers are overloaded with ads and information, so when they see a positive review for something, they’re going to be able to make a decision faster and more confidently.
  • WOM marketing doesn’t stop after one interaction. Once someone spreads information about your business to someone else, then the chain can continue. Even though every conversation isn’t going to lead to a purchase, you’re still getting the benefit of brand awareness. You always want your brand to be talked about. Brand awareness can help with recognition, differentiation from your competitors, and the association of positive emotions from consumers.
  • WOM marketing can build a community. People aren’t as likely to buy from you and then forget it. Instead, they’re going to keep engaging with your brand and then continue to share their experiences with other people. When compares are loyal to you, there’s a high likelihood of repeat purchases.

It is worth mentioning that WOM marketing can have some downsides.

First, you can’t control what people say. Even if you’re great to your customers and provide impeccable service, there’s no guarantee they’ll say anything at all. There’s also a chance they might still say something negative. No matter how much you do, customers might find something negative associated with doing business with you.

The results of WOM marketing can also be unpredictable. If you have a particular timeline, like a launch, you can’t rely on WOM marketing because of this unpredictability. Along with the unpredictability of whether and when someone will talk about your business, from there, there are no guarantee people will check you out even if they hear good things about you.

A third downside is that it’s pretty easy to get bad press. Some people might give you bad feedback just because or because they’re purposely weaponizing what they say as a form of malicious retaliation.

What Drives WOM Marketing?

John Berger, a professor of marketing at the University of Pennsylvania, says WOM marketing is driven by two concepts—social currency and triggers.

Social currency is built on the idea of exclusivity. You might get access to a presale for a brand you love. You feel special and privileged to get this access. You feel like you have insider information or you’re part of something special. That can then encourage you to share exclusive information about the product or service.

Everyone wants to be part of something that’s exclusive, and they also want others to know that they’re chosen to be part of this.

Triggers prompt consumers to think about a brand or company in the absence of any advertising. Triggers can remind people of your products, services, sales, and promotions that their friends or family mentioned.

WOM Marketing Tips

If you do decide you want to engage in WOM marketing, there are some things you can do to start the process or encourage it.

  • Offer free things. It’s a fact of life that people like free things, so if you’re giving something away, it can generate positive publicity for you. You might give away free products or services to your most loyal customers or give them special discounts. You can also give out branded merchandise, or you can show your customers that you appreciate them by giving them something to celebrate anniversaries or big events.
  • Have a formal referral program. You want to incentivize people to share good things about your business, and a referral program does that. You can encourage your customers to get others to try your products or services, and what’s great about formalizing referrals is that you can track the results. This is a valuable metric.
  • Boost your user-generated content. As mentioned, buyers are more likely to listen to other customers’ experiences, so user-generated content is extremely helpful here. Encourage customers to create content by creating hashtags that can be used by the public. It’s another place where you can incentivize your customers too. Maybe you offer free gifts and discounts when someone shares user-generated content on your social pages.
  • Generate a sense of exclusivity. Customers, again, want to feel like they’re part of something exclusive and unique. You can give them something they won’t get other places, and it’s also going to build buzz for your business.
  • Always encourage ratings and reviews. A lot of customers don’t leave reviews because they simply don’t think about it. Keep it top-of-mind for them. Remind them to leave reviews after they buy from you. Make it easy by telling them how to most effectively leave a review. Once people review your business, you want to keep engaging with them. For example, when you see reviews, comment on them publicly and then think about reaching out by direct message to thank them as well. One of the simplest ways to get people to give feedback is by adding product ratings on your site, especially if you’re an eCommerce or tech company. Then, it takes just a few seconds for customers to leave a rating, so it’s incredibly simple but powerful.
  • Connect with influencers and thought leaders in your industry. Influencers are the ultimate form of WOM marketing, and they’re incredibly popular and in demand by brands right now. Influencers have a reputation that’s already established, so when you can get them to promote your business, it’s powerful and has a lot of value. You don’t have to get the most expensive influencers or the ones with the biggest followers. You can choose influencers that are relevant to your own targeted audience and may have a smaller but highly engaged audience of their own.

Finally, you have to make sure you have the best products and services, and the experience you offer from start to finish is worthy of being shared. You want to be memorable and make sure that each step in their purchasing journey with you stands out in a positive way. If you can’t deliver on the basics, then no matter how great your WOM marketing strategies might be, they aren’t going to create value for you. Start with the foundation and then move on from there. The foundation is the products and customer service you offer to every person who does business with you.