Word of Mouth Marketing: The Power of Recommendations

Word of Mouth Marketing: The Power of Recommendations

Word of mouth marketing, often abbreviated as WOMM, refers to any positive or negative customer recommendation about a product or company.

It occurs organically in everyday conversations but can also be encouraged as an effective promotional strategy.

This influential form of marketing relies entirely on person-to-person sharing rather than direct company advertising efforts.

This article explores what word of mouth marketing entails, what makes it so impactful, tips for launching a successful WOMM campaign, and statistics on how critical user recommendations can be for brands.

Let's dive in!

What is Word of Mouth Marketing?

Word of mouth marketing leverages satisfied customers to promote products or services through their social circles. This happens casually in routine interactions, like:

• Chatting with friends and family
• Posting on social media
• Leaving online reviews
• Making product suggestions in-store

Rather than direct advertising, it centres entirely around customers organically sharing their opinions and experiences.

Positive WOMM occurs when people recommend or compliment brands and products. However, dissatisfied customers can share negative experiences, highlighting the need to deliver excellence continually.

“A disappointed customer will tell 9-15 people about their experience. Around 13% of customers with a bad experience will share it with over 20 people.”

Evolution of Word of Mouth Marketing Techniques

Word of mouth marketing has transformed significantly with digital advancements.

Initially reliant on face-to-face interactions, its expansion into the digital realm has broadened the audience reach. Online platforms, particularly social media, allow recommendations to spread instantaneously to global audiences.

Brands have harnessed these platforms to curate engaging content, actively encouraging shares and interactions.

Considering its historical limitations, the digital shift marks a profound evolution, enabling constant connectivity and a broader promotional scope.

As digital ecosystems evolve, WOMM strategies have begun to incorporate artificial intelligence to further personalise and streamline customer interactions. AI can tailor recommendations and automate responses, making consumer-brand interactions more relevant and engaging.

Using AI-driven tools, companies can analyse customer data to understand trends and preferences, enhancing targeted word-of-mouth efforts and ensuring more effective outreach.

This sophistication allows brands to integrate traditional word of mouth with modern technology, fostering a hybrid approach that maximises effectiveness.

What Makes Word of Mouth Marketing So Impactful?

More than any sponsored ad or promotional post, people trust recommendations from those they know and respect. This lends extraordinary influence to word-of-mouth marketing for several key reasons:

Authenticity

Suggestions from people we trust feel genuine as they share no underlying motives besides their views. This authenticity elicits openness and belief in the recommendation.

Reach

While brands can only advertise to their existing audience, WOMM has unlimited reach as customers voluntarily promote to their networks.

Specificity

Friends and family can describe precise aspects of products that resonate with our preferences rather than generic marketing speak.

With WOMM's strong influence on purchase decisions, dedicating efforts to encourage organic sharing can pay off in sales, loyalty, and long-term growth.

84% of people trust recommendations from friends and family above all other forms of promotion.

Types of Word of Mouth Marketing

Word of mouth marketing encompasses various forms, each uniquely impactful. Buzz marketing aims to stimulate conversations about brands through surprising events or stunts. Influencer marketing leverages personalities with significant followings to naturally endorse products.

Referral programmes incentivise customers to recommend brands to others, typically through discounts or rewards. These strategies, by diversifying approaches, cater to varied customer behaviours and preferences.

Crafting an Impactful Word of Mouth Strategy

Curating positive WOMM begins with designing an exceptional product and customer experience that people genuinely enjoy and want to share.

Assuming that the baseline of quality is met, brands can then take proactive steps to amplify organic sharing even further:

Foster Brand Loyalty

Loyal customers become de facto brand ambassadors, eager to share the merits of products and services they love. Building allegiance starts with exceeding expectations at every touchpoint.

Little ‘delight factors’ also inspire appreciation and connection with a brand. Think of unexpected upgrades, handwritten thank-you notes, or special loyalty rewards.

Encourage Social Sharing

Equipping happy customers to share their positive experiences easily is crucial. Social sharing buttons, user-generated content features, and share-worthy creatives facilitate driving recommendations through social platforms.

Promote Reviews

Reviews hold significant sway in purchase decisions today. Many positive customer testimonials, especially recent ones, can significantly influence perception. Gently reminding happy customers to leave their feedback can help.

Enable Influencer Partnerships

Influencers with engaged follower bases can exponentially amplify WOMM potential. Seek out those authentically aligning with the brand essence and incentivise sharing unique discount codes or affiliate opportunities.

When activating word of mouth marketing, brands must uphold integrity, avoiding pushy or disingenuous tactics. Next, let’s explore revealing statistics on how WOMM impacts brands today.

The Role of Technology in WOMM

Technology not only simplifies WOMM but also enhances its effectiveness and measurability. Advanced analytics tools dissect consumer opinions, offering insights into customer sentiment and perception. Social listening tools enable tracking of brand mentions and dialogues in real time, affording businesses the capacity to engage directly and appropriately.

These instruments help brands understand the nuances of online dialogue, further refining their strategies to bolster natural customer advocacy.

The Rising Significance of Word of Mouth Influence

With more purchasing happening online and social media enabling rapid, widespread sharing, WOMM is more integral to success than ever before:

• In the US alone, an estimated $6 billion was spent on word of mouth marketing in 2019. This represents 7% growth from 2018 as brands dedicate increasing efforts towards WOMM.
• With 92% of global consumers trusting suggestions from friends and family above all other promotions, WOMM represents the most credible form of advertising today.
• Consumers place nearly as much weight on online reviews as personal recommendations from people they know, with 84% trusting online reviews.
• Most sharing happens online now, with more than 65% of WOMM occurring through social media or other online channels. Offline WOMM still holds significance, though at 35% of all sharing.
• Nielsen reports that WOMM exposure leads to a sales increase of over 5% across 20 major product categories. For automobiles specifically, that jumps to a 40% lift in purchase likelihood following a positive recommendation.

“78% of consumers have made a purchase based solely on a positive online review they've read. Most consumers read at least six reviews before trusting a business.”

With numbers like that, it’s impossible to deny the formidable influence customers sharing their views has in driving buying decisions and brand growth. Let’s explore some final tips for activating this influence.

Measuring Word of Mouth Marketing Success

While most word of mouth advertising spreads through natural social sharing, brands can still quantify results to optimise initiatives. Here are helpful metrics to track:

• Referral traffic – How many visits come from referred links versus direct traffic?
• Referral conversions – What percentage of referred visitors complete a desired action like purchasing or downloading something?
• Net Promoter Score – Would customers recommend your product or brand to friends? Detractors subtract from promotors.
• Social mentions – How often is your brand mentioned on social media channels? Sentiment tracking tools analyse tone.
• UGC engagement – When users post about your brand, how much does that content get liked, commented on, or shared?
• Incentivised referrals – How many referrals are made and converted per advocate for formal programs?
• Reviews – Volume, ratings, and sentiment of customer reviews.

Brand listening tools help aggregate mentions, referrals, shares, and metrics for monitoring word of mouth momentum and pinpointing successful activities to double down on.

Case Study #1: Airbnb

Airbnb built a $35 billion accommodations empire fueled by word of mouth without spending a dollar on advertising until 2014. The key? Making shareable, remarkable content the norm.

Key WOMM Strategies

• Local hosts – Provided authentic, personal travel encounters worth raving about. Empowered them to share hosting stories.
• Experience bookings – Unique activities inspire travellers to share memories and recommend them to others. Private concert listings saw bookings climb 160% with zero advertising.
• Creative content – Films, magazines, and unexpected partnerships kept Airbnb top of mind. The #Airbnbfilm “A Night at The Louvre”, where contest winners slept in the art museum, generated 8 million views.
• Referral incentives – Ambassadors score credits, travel vouchers, and discounts for successful sign-ups. Over 60% of new hosts were referred by other hosts.

The Impact

• Over 6 million global listings
• 4 million guests each night
• Six guest arrivals per second
• $3.7 billion total guest spend on experience bookings in 2021

Airbnb continues to double on word of mouth by creating bucket list travel moments only a friend would recommend.

Case Study #2: Dollar Shave Club

Dollar Shave Club’s launch video single-handedly propelled millions in funding from 12,000 first-day subscribers – initiating years of market upheaval with a humorous, viral bang.

Key WOMM Strategies:

• Entertaining video – “Our Blades are F***ing Great” YouTube ad breaks category norms with laughs. Views exceed 25 million.
• Subscription convenience – Easy recurring razor orders make sharing with friends a helpful recommendation.
• Referral rewards – $5 discounts encouraged sharing to drive new subscriptions.
• Delighting customers – High-quality blades at affordable pricing with convenient delivery sparks positive word of mouth.

The Impact

• Reached over 3 million subscribers by 2016
• Acquired by Unilever for $1 billion in 2016
• The first-day launch campaign was praised as “one of the most brilliant startup marketing plays ever deployed.”

Dollar Shave Club made one viral video and a creative subscription model to do the heavy lifting to gain enough subscribers and street cred to catch a giant brand’s eye – all through word-of-mouth appeal.

Case Study on Successful User-Generated Content Campaigns

Starbucks, through its “White Cup Contest,” exemplified a successful user-generated content campaign. The contest invited customers to decorate Starbucks cups and share their creations on social media. The initiative sparked creativity and engagement, leading to thousands of entries shared globally.

Coca-Cola's “Share a Coke” campaign personalised bottle labels, encouraging customers to find names and share their experiences online. Both campaigns utilised customer input to enhance brand visibility and fortify consumer connections.

Ethical Considerations in Word of Mouth Marketing

Employing ethical practices in WOMM is vital. Transparency with partnerships, especially in influencer marketing, maintains trust by clarifying the promotional nature. Brands should ensure honesty in customer interactions, valuing user feedback authentically.

Misleading tactics can erode trust, diminishing long-term brand credibility. Conversely, reinforcing authentic experiences and opinions can strengthen the relationship between the brand and its consumers, fostering genuine advocacy.

Ethical deployments of WOMM also extend to cultural sensitivity, ensuring that campaigns resonate appropriately across varied communities.

Demonstrating cultural awareness in marketing initiatives helps prevent alienating potential customers and supports inclusive brand representation. Undertaking comprehensive research and involving multiple viewpoints in campaign creation can aid in achieving ethically sound promotion, fostering global acceptance and admiration.

Brands must commit to these ethical practices to strengthen trust and build lasting consumer relationships.

7 Strategies to Jumpstart Word Of Mouth Marketing

To leverage WOMM that genuinely supports your brand and customers alike, focus on:

1. Delivering Premium Value

Craft an outstanding product, service, and associated experience that people naturally want to rave about. The value must be inherent before any sharing can occur.

2. Identifying Brand Advocates

Determine who your happiest and most vocal customers are through net promoter score surveys and engagement monitoring. Engage these loyalists with ambassador programs that empower them to spread the word.

3. Equipping Sharing Opportunities

Provide visible avenues like social sharing buttons, user-generated content features, and creative brand assets that simplify sharing positive sentiments.

4. Curating UGC & Reviews

Aggregate and display authentic user-generated and third-party content, like online reviews, testimonials, or social mentions. Feature it prominently across owned channels.

5. Tracking Campaign Impact

Use trackable links, UTM codes, or hashtags to quantify WOMM reach and conversion to optimise ongoing influencer and advocacy efforts.

6. Offering Referral Rewards

Incentivise sharing without diluting authenticity through small discounts, gifts, or points as a genuine ‘thank you’ for spreading the word, not buying loyalty.

7. Being Responsive

Monitor online conversations about your brand, then promptly address any concerns before they gain traction while highlighting positive commentary.

Actively investing in word-of-mouth strategies provides an invaluable opportunity to amplify visibility organically and reinforce credibility through the voices of happy customers.

Conclusion

At its core, word of mouth marketing creates a symbiotic relationship where delighted customers become a brand’s most ardent supporters and distribution channels. Then, the positive commentary shared, in turn, attracts new and increasingly loyal customers.

It establishes a virtuous cycle of value creation and advocacy. Savvy brands recognise WOMM’s formidable influence in today’s social era and dedicate genuine efforts towards curating this contagious positive buzz.

Rather than paying for impressions and conversions, they earn it by obsessively delighting their customers. This authenticity simply cannot be replicated through conventional advertisements alone. It requires embedding WOMM strategies across the entire customer journey.

While slow to start initially, word of mouth allows brands to earn visibility and trust at unprecedented economies of scale once kickstarted. Eventually, the groundswell of recommendations and reviews perpetuates itself with modest ongoing nurturing.

For any business selling products or services today, ignoring this vital influence is no longer an option. Embrace word of mouth marketing early on to tap into its unmatched reach, credibility, and amplification capabilities.

Frequently Asked Questions