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Word-of-mouth marketing remains vital, even as the ways we communicate continue to evolve. While some business owners build successful practices through traditional in-person networking, others leverage digital channels to drive conversations about their brands. Though often considered “free marketing,” successful word-of-mouth strategies require investment in creating experiences worth sharing. Let’s discuss:
- What is word of mouth marketing
- Word of mouth marketing benefits
- Word of mouth marketing strategy
- How effective is word of mouth marketing
What is word of mouth marketing
“Word of mouth marketing is really any time that you can encourage somebody to make a recommendation for you,” said Saul Colt, an expert in the practice, on Episode 306 of “The Business Storytelling Podcast.” “When you think of prostitution being the oldest profession, somebody had to tell someone else that this woman or that woman was better than the other. So anytime people are talking and making recommendations, that’s word of mouth.”
Today this marketing tactic spans both digital and traditional channels.
“There’s still going to be an element, either online or off, of saying I had this really great experience with this person or this company, sharing specifics about what was great about it,” said Suzanne Reilley, a business coach who often teaches clients the tactic, on Episode 697 of “The Business Storytelling Podcast.”
Some business owners have even built full practices simply by meeting people at everyday locations like banks and grocery stores.
The fundamental principle remains unchanged: as Saul notes, “Nobody will ever talk about your company unless you give them a reason to talk about you.”
Word of mouth marketing benefits
Word-of-mouth marketing builds credibility through trusted relationships. The trust factor is significant – Saul explains that while a recommendation from a stranger might carry 50% weight, a recommendation from a friend increases to 93% likelihood of action.
“If your best friend says you got to watch the show, you got to eat at this restaurant… that 50% becomes 93%.”
Companies can pursue either organic or incentivized word-of-mouth strategies. While incentivized programs like referral rewards can work, Saul prefers organic approaches.
“I personally prefer organic word of mouth marketing… when you do amazing things for people that they have to tell their friends, and when they tell their friends, that’s when you can add all the social media trickery and things like that to pour gas on the conversation.”
Some companies have leveraged these benefits through remarkable customer experiences. Saul points to Zappos as an example.
“Their customer service representatives were empowered to actually make your life better. You could pretty much call Zappos for anything you could imagine, not product wise, but like service wise.”
This approach generated countless stories of exceptional service that customers naturally wanted to share.
Read next: Building a successful niche website: Lessons to help you grow
Word of mouth marketing strategy
Success looks different for every business.
“I really believe that there’s so many different ways to be successful, and the ways to be most successful are the ways that make sense to you,” said Suzanne.
Even during challenging times, brands can create meaningful connections. Saul describes how companies adapted during social distancing.
“We’ve created virtual game shows… we got 100 people, 200 people on waiting lists to play these games with the companies. We developed a different relationship with customers in this time because it took a different style of thinking.”
Creative approaches can spark conversation without high costs. One local company strategically give two-dollar bills as change, knowing customers will mention where they got them when spending them elsewhere. These simple tactics can create natural conversation starters about your brand.
Saul emphasizes that experiences drive word of mouth.
“Word of mouth happens through experiences. Word of mouth happens through creating tools for people to actually talk and share.”
He suggests that even small actions can be effective if they get people to “scratch their head” and spend just ten more seconds thinking about your brand than they do about competitors.
For word-of-mouth marketing to be effective, businesses need to create compelling stories.
“One of the most impactful things in marketing is to be clear on where a person is starting from and where they want to be, and then ethically and truthfully help them get there,” said Suzanne.
This involves understanding your customers’ journey and creating experiences worth sharing at each step. But, Suzanne notes, business owners can feel overwhelmed by the amount of information and options available online. The key is maintaining authenticity across all channels while adapting to new ways of engaging customers.
Let’s brainstorm strategies that work.
How effective is word of mouth marketing
The effectiveness depends largely on consistency across channels.
“When your brand messaging is consistent across channels, and those key elements are repeated in different ways in different places, it helps people remember that,” said Suzanne.
One common challenge is getting stuck at various points in the marketing funnel.
“Either they don’t have enough new people coming in, or they have a ton of people, but they’re not converting,” said Suzanne. The solution isn’t always to start over.
“What business owners tend to do on their own is like, without that objectivity, they’ll say, okay, so many people came through this page and it’s not converting like I want, and they just like, scrap the whole brand,” said Suzanne. Instead, she recommends pinpointing specific areas where issues are occurring and fixing those precise points.
Success rarely comes instantly.
“The headlines are so shiny, right? It says, like, earn X amount of dollars in 20 minutes, or in one webinar or in an afternoon, but then there’s kind of a lot of work that goes with that,” said Suzanne.
Understanding the market helps business owners make informed decisions about continuing their efforts or adjusting their approach.
While word-of-mouth marketing might seem free, successful campaigns require investment. The benefit comes not from eliminating marketing costs entirely, but from creating ongoing conversations that compound over time.
“Word of mouth is really about getting people to tell their friends, because that referral becomes exponentially more valuable,” said Saul.
Success comes to those who can consistently deliver value while staying true to their unique strengths and story. While you can’t control exactly how people share their experiences, you can influence the narrative through consistent, authentic messaging and exceptional experiences. In the end, word-of-mouth marketing is about giving people something worth talking about – whether they’re sharing that story online or off.
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