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What Getting Acquired Taught Us About Word-of-Mouth Marketing

5 minute read

Before we dive into this blog post, we have some HUGE news to share: Ambassador has been acquired by West Corporation!

via GIPHY


We are honored to be partnering with such an established organization. West products and services extend to the customers of most of the Fortune 500. West is owned by Apollo Group, the world’s largest — and arguably most successful — private equity fund.

Read the full announcement from our Founder & CEO, Jeff Epstein, here >>

Over the past eight years, our team has been relentless in helping brands leverage the power of word-of-mouth through various channels of relationship marketing, from referral marketing to partner programs to affiliate marketing to influencer campaigns. We power some of the best referral programs out there today, and will continue partnering with leading brands who understand the value of positive word-of-mouth.

And today, we’re validated in our efforts. Word-of-mouth marketing continues to scale and more and more companies, investors, analysts, and executives are noticing the benefits of utilizing customers, fans, followers, and networks to increase brand awareness and drive revenue.

The shocking part is, word-of-mouth marketing isn’t a modern strategy, or a new-fangled approach to customer engagement and acquisition. In fact, word-of-mouth’s roots can be traced as far back as the Paleolithic Age, when the most influential cavemen leveraged word-of-mouth to share new ideas and lead their communities to the best hunting grounds.

As we’ve evolved over the years, so has the use of word-of-mouth marketing. Today, it remains one of the most trusted and effective strategies for repeatably driving product adoption (just ask modern brands like PayPal, Dropbox, Spotify, and many others). And, annually, it accounts for billions of dollars in new revenue.

So what have we learned leading up to acquisition? What are the biggest lessons we can pass on to marketers? What do we continue to look forward to?

TL;DR: Modern marketers needs to be paying attention to word-of-mouth marketing.

Lesson #1: The Value of Word-of-Mouth is Skyrocketing

Sure, as word-of-mouth marketers, we’re pretty bias when it comes to leveraging strategies, like referral marketing. But the data also backs us up; referrals are more influential than we think.

In fact, 82% of Americans seek recommendations from friends and family when considering a purchase. More so, 67% say they are more likely to purchase a product after a friend or family share it via social media or email.

What does this mean in practice?

Well, it’s not exactly controversial to suggest that word-of-mouth influences customer buying decisions. There’s a significant correlation between purchasing behavior and word-of-mouth marketing efforts.

Most of us have sought input from our own networks when making a big purchase, or we’ve taken a chance on a new company after hearing a friend or family member rave about its products and services. This is exactly how many of us discovered brands like Airbnb and Uber (two hallmark referral program examples) and it makes sense why we value this form of “marketing” so much. Recommendations from trusted sources tend to come from a very genuine, authentic place.

And these referrals don’t just help us make decisions. Often times, they’re the primary driver of them. The same isn’t usually true of display ads or branded content.

Lesson #2 : Word-of-Mouth Marketing is a Better Bet than Display Advertising

As of late, one of the most popular avenues for word-of-mouth has become influencer marketing. This strategy positions people to be strong ambassadors of a brand while targeting their engaged following. This is the digitized future of word-of-mouth marketing - and it’s significantly changing the marketing & advertising landscape. While display ads still resonate in some markets, like live sports television, influencer marketing is chewing up display advertising by driving more value and a higher ROI.

The modern consumer also has tools available, like ad blocking technology, to remove unwanted ads from their social streams. This is literally the exact opposite of how consumers treat people they are influenced by. They are choosing to opt-into their opinions, streams, videos and thoughts -- they aren’t going to block these people, ever.

It’s actually pretty ironic: 41% of ad blocker users found out about ad blockers via word-of-mouth!1

Lesson #3 : Word-of-Mouth isn’t Limited to Specific Industries

Contrary to popular belief, referrals and influencers are not just for eCommerce brands. In fact, a deeper look into our data revealed that referral marketing is actually industry agnostic.

Word-of-mouth marketing is a natural fit for any vertical where your biggest fans, customers, partners, and influencers are already talking about your brand (or your competitors). No matter the industry, there is one major takeaway: Successful word-of-mouth marketing strategies, like referral programs, generate a natural network effect.

As you acquire more referred customers, an abnormally high proportion of them will convert into new brand ambassadors. Those brand ambassadors will then draw in new customers, and the cycle will start all over again.

Lesson #4 : Incentive Structure Plays a Big Role in Increasing and Scaling Word-of-Mouth Activity

Companies that leverage word-of-mouth marketing are investing in an opportunity to benefit from an active, engaged, and valuably rewarded audience of advocates. Whether it’s a refer-a-friend campaign or an affiliate strategy or influencer marketing, the best program incentives are reflective of the hard work that your members put in as they share good news about your product or service.

There’s no one-size-fits-all approach to developing an incentive structure. In fact, many of our clients have found success with dual incentive structures because both parties feel like they're being rewarded and valued. Instead of looking for a textbook answer to your incentive structure questions, build a program that suits your company and what you want to reward.

Lesson #5: Embed Word-of-Mouth Into Every Aspect of the User Experience

For word-of-mouth strategies, like a referral program, to consistently deliver truly exceptional results, you must take all marketing channels into consideration.

Basically, your program should be woven into who you are and how you operate. Without structure and commitment, you’re largely hoping that good things happen and that customers inherently know to share your business with their friends, family, and colleagues.



With more marketers headed towards creating personalized experiences for their customer base and prospects, the future for word-of-mouth marketing is bright. It is all about creating experiences worth talking about.

Time and time again, word-of-mouth has been identified as one of the most valuable forms of marketing – the one that customers trust above all others and is most likely to drive sales for your company.

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[1] HubSpot: The Ultimate List of Marketing Statistics for 2018

Posted in Word-of-Mouth

Amity Kapadia

Written by Amity Kapadia

Amity Kapadia is Director of Content Marketing at Ambassador. She spends most of her days marketing to marketers and having the internal debate, to pizza or not to pizza?

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