Marketing by Word-of-Mouth: What Works (and Doesn't)

Marketing by word-of-mouth is not only a way to make sure conversations about your brand stay positive, but can be an effective way to drive revenue.

Marketing by word-of-mouth has influenced purchasing decisions on everything from buying a new car, to choosing a restaurant for dinner, and even selecting software vendors. 

It’s no coincidence that you and your online network share a few of the same favorite things. Who doesn’t love hearing about a great product or service from a trustworthy source? 

Now more than ever, word-of-mouth marketing strategies are focused on building long-term partnerships with customers, fans, and prospects. In fact, most digital marketing teams have at least one KPI dedicated to developing and nurturing relationships.

The shift toward a more personal marketing approach has been driven by the increased demand of consumers who want to know that the brands they work with not only offer quality products or services, but truly care about them. People want to know there are real faces behind logos, that brands are listening to their concerns and that your company is willing to go above and beyond to satisfy consumer needs.

Enter word-of-mouth marketing.

Marketing by Word-of-Mouth: Strategies That Are Proven To Work (and Not Work)

Whether it’s making a purchase via a referral link, or passing leads from a verified partner, there’s no disputing the magnetic pull of word-of-mouth marketing with the modern consumer.

As marketers, it's important to activate a word-of-mouth marketing strategy than enables your customers and fans to share your product, service, and experience.

So, what works well - and what doesn't? Let's dive in:

Marketing by Word of Mouth Icon 1What Works: Giving Your Customers, Fans, Affiliates, Partners, and Influencers Tools to Promote Your Brand

For word-of-mouth marketing to work, you can’t expect people to invest their own time and energy into developing tools and assets to support your brand. Instead, you need to make the process as simple as possible. This might mean creating a hashtag that customers can share on Twitter, or developing email templates that ensure ambassadors use the right language to share the right landing page URL.

In fact, a study found that while 83% of satisfied customers are willing to refer a brand, only 29% actually did so. While there are many variables on why this gap exists, a surefire way to close the chasm is to give your fans the tools they need.

Decreasing the effort required to deliver a referred customer or a new lead is a critical piece of the word-of-mouth marketing equation.

Marketing by Word of Mouth icon 2What Doesn't Work: A Program That's Too Complicated or Tough To Find

Whichever word-of-mouth strategy you are using - be it referral marketing, affiliate marketing, influencer marketing, or partner marketing - if your program isn’t public facing or it’s difficult to use and share with the click of a button, then you’ll severely limit your ability to drive word-of-mouth.

For example, if you’re requiring customers to manually input a potential referral’s information with a lengthy form, chances are you'll see a higher abandonment rate than simply asking for an email address. Multiple steps to share your brand can create a barrier that significantly hinders referral activity, so keep the process simple for anyone (customers, fans, admirers, influencers advocates, etc.) to share your brand with everyone who might be interested in it.

Marketing by Word of Mouth icon 3What Works: Incorporating Word-of-Mouth Into Your Overall Marketing Strategy

For word-of-mouth marketing to really scale, it must be embedded into every aspect of the user experience. For example, your referral program should be a call to action included in newsletters and blog posts. Or employee email signatures should feature a link to join your partner program.

Most importantly, every word-of-mouth program should be fully integrated with other critical systems (customer-relationship management, marketing automation, eCommerce technology, point-of-sale systems, optimization tools, etc.). 

Marketing by Word of Mouth icon 4What Doesn't Work: Set It & Forget It Mentality

We've said it before, and we'll say it again: Don't fall into the trap of setting your program up, and then forgetting about it. 

Like all strategic marketing initiatives, word-of-mouth programs thrive in an environment of perpetual optimization.

This is where having one marketing software to manage your referral, affiliate, influencer, and partner programs can be enormously helpful. With the right tools, you can create a structured process around monitoring, tracking, testing and incentivizing program members and their activity.

Why is this valuable?

Over time, the data gathered will provide clear trends into the activities, channels, and customer personas that are driving the best results. Arming yourself with that insight will make it much easier to successfully scale your word-of-mouth marketing program(s).

For word-of-mouth to consistently deliver bottom-line results, this strategy must be part of how your business operates. Without structure and commitment, you’re largely at the mercy of chance. But with the right approach, process and technology, you can turn marketing by word-of-mouth into a predictable, scalable channel of high-quality revenue.

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