Researchers have found that a 10% increase in word-of-mouth (both offline and online) translates into sales growth of between 0.2% and 1.5%. Therefore, word-of-mouth marketing for local businesses deserves attention.
This is because 85% of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts. This trust in the opinions of other consumers changes the role of advertising in the era of customer experience.
Word-of-mouth marketing is an excellent low-cost strategy that can provide a high return on investment, which you can implement in your marketing strategies.
Therefore, we have prepared this simple and practical content that shows you how to define a word-of-mouth marketing strategy for your company.
What is word-of-mouth marketing?
Word-of-mouth marketing is the process of influencing and encouraging people to talk about your products, services, or brand in a spontaneous way.
For this to happen, it is necessary to:
- To offer an experience that is surprising enough to generate interest in sharing
- Encourage the word-of-mouth process.
They happen in two ways: organically or through marketing campaigns
- Organically: it happens naturally, when a person has an excellent experience with the brand and wants to share it with friends. But in the vast majority of cases, an excellent experience is not enough to generate word-of-mouth marketing.
- Marketing campaigns: when professionals in the field develop campaigns to encourage word-of-mouth, in addition to offering something of great interest that the user wants to share.
Why does it work so well?
According to Nielsen, 92% of people trust recommendations from friends and family much more than any type of paid advertisement.
Trust is the key word. People trust people, not advertisements. If a friend or another consumer recommends the brand, they are more likely to buy.
Furthermore:
- 85% of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts².
- 74% of consumers identify word of mouth as a key influencer in their purchasing decisions³.
- Researchers have found that a 10% increase in word-of-mouth (both offline and online) translates into a sales increase of between 0.2% and 1.5%.
👉Check it out: How do I know what my customer thinks of my company?
Benefits of word-of-mouth marketing:
- Increase sales without spending on advertising: word of mouth spreads quickly, reaching a large number of people in a short period of time.
- Increased trust: recommendations from other people are more trustworthy than advertisements. Your company is being recommended in the most reliable context possible – it's strong social proof working in your favor.
- Building loyalty and reducing CAC¹: According to the National Law Review, it can cost five times more to acquire a new customer than to retain a current one. A good word-of-mouth marketing strategy will keep customers coming back and also encourage them to refer other potential customers.
How to create a word-of-mouth marketing strategy
3 key components for it to work:
- Social currency: creating something that generates consumer interest
- Mental triggers: to influence word of mouth
- Generate emotion: to encourage action
1. Social currency: we share something because it generates personal value for us, which allows us to be well regarded in our social circle. For example: practical content such as tips and recipes or news and updates – the kind of content that makes us seem smarter, more up-to-date, cool, or even funnier.
2. Mental triggers: often the actions we take in our daily lives are influenced by the environment or context in which we find ourselves. The idea is to link the product/service in question to the predominant suggestions in that environment or context, thus creating a mental trigger to remember a specific brand.
For example, a supermarket conducted the following experiment: on certain days it played German music, on others French music, to see if this would influence wine choices. The result: by encouraging consumers to think about different countries, on certain days more French wines were sold, and on others, more German wines were chosen. Environmental details like this are part of the customer experience in supermarkets and weigh heavily in purchasing decisions.
3. Generating emotion: one of the reasons things are shared is when they generate emotion, but it can't be just any emotion. According to the book Contagious, they need to be the kind that generate excitement in the individual. In the case of positive emotions, we have amazement, excitement, and amusement/humor. In the case of negative emotions: anger and anxiety.
Excitement: This refers to a state of activation and readiness for action. Excitement ignites the fire that drives action.
When we feel excited, we want to do something, not just stand still. The same is true for amazement; when overcome by it, we can't help but want to tell people what happened.
Other emotions, however, have the opposite effect; they stifle action. Take sadness, for example, whether dealing with a difficult separation or the death of a pet; sad people tend to withdraw.
👉Check it out: Mobile advertising: how location-based marketing works
How to put a word-of-mouth marketing plan into practice
- To make or create something unique and memorable
- Investing in an excellent customer experience
- To generate an exciting emotion (that encourages action)
- Encourage customer-generated content
- To enable you to be evaluated
- encourage the receipt of reviews
- Share these reviews
- Encourage sharing
- Referral program;
- Partnerships with influencers;
- Mental triggers: see how you can take advantage of the environment/context around you. If people remember you, they will continue talking about you.
👉Check it out: Relationship marketing: everything you really need to know
Conclusion
Word-of-mouth marketing is a powerful way to spread your message. A well-executed strategy can boost your sales like never before, but it requires study and planning.
We're still figuring out how our minds work, so not every strategy will work. But one thing is certain: don't expect an excellent experience to be enough to generate word-of-mouth marketing—although sometimes it does happen.
When developing your strategy, put your customer at the center. Only genuine brand-customer engagement can transform a consumer into a brand advocate.
Also check out our webinar on experiential marketing and how to attract more customers to physical stores: a 100% organic strategy! 👇👇👇
