Researchers have found that a 10% increase in word-of-mouth (offline and online) translates into sales growth of between 0.2 and 1.5%.
That's because 85% of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts.
Word-of-mouth marketing is an excellent, low-cost strategy that can yield high returns for you to implement in your marketing strategies.
That's why we've prepared this simple, 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:
- Offer an experience surprising enough to generate interest in sharing
- Encourage word of mouth.
They happen in two ways: organically or through marketing campaigns:
- Organically: It happens naturally, when someone has a great experience with the brand and wants to share it with friends. But in most cases, a great experience isn't enough to generate word of mouth.
- Marketing campaigns: when professionals in the field develop campaigns to encourage word of mouth, in addition to offering something of great interest that users want 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 advertising.
Trust is the key. People trust people, not ads. If a friend or other consumer recommends a brand, they're 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 (off 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 in 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 ads. Your company is being recommended in the most trustworthy context possible—it's a powerful social proof 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 an existing one. A good word-of-mouth marketing strategy will keep customers coming back and encourage them to refer other potential customers.
How to Create a Word-of-Mouth Marketing Strategy
3 key components to make it work:
- Social currency: creating something that generates interest in the consumer
- Mental triggers: to influence word of mouth
- Generate emotion: to encourage action
1. Social currency: We share something because it generates personal value, which allows us to be well-regarded in our social circle. For example: practical content like tips and recipes or news and updates—the type of content that makes us appear smarter, more in-the-know, cooler, or even fun.
2. Mental triggers: Often, the actions we take in our daily lives are influenced by the environment or context we find ourselves in. The idea is to link the product/service in question to the prevailing cues in that environment or context, thus creating a mental trigger to recall a specific brand.
For example, a supermarket ran the following experiment: on certain days, they played German music and 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.
3. Generate 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 Contagion, they need to be those that generate excitement in the individual. Positive emotions include wonder, excitement, and amusement/humor. Negative emotions include anger and anxiety.
Excitement: This is 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 sit still. The same goes for amazement; when overcome by it, we can't help but want to tell people what happened.
Other emotions have the opposite effect, stifling action. Consider sadness, whether dealing with a difficult breakup or the death of a pet; sad people tend to shut down.
👉Check out: Mobile Advertising: How Location-Based Marketing Works
How to implement a word-of-mouth marketing plan
- Do or create something unique and memorable
- Investing in an excellent customer experience
- Generate an exciting emotion (which encourages action)
- Encourage customer-generated content
- enable you to be evaluated
- encourage the receipt of reviews
- Share these reviews
- Encourage sharing
- Referral program;
- Partnership with influencers;
- Mental triggers: see how you can take advantage of the environment/context around you. If people remember you, they'll keep talking about you.
👉Check out: Relationship Marketing: Everything You Really Need to Know
Conclusion
Word-of-mouth marketing is a powerful way to spread your message. A well-timed strategy can boost your sales like never before, but it requires research and planning.
We're still figuring out how our minds work, so not every strategy will work. But one thing's for sure: don't expect a great experience to be enough to generate word of mouth—although sometimes it does.
When developing your strategy, put your customer at the center. Only genuine brand-customer engagement can transform consumers into brand advocates.
Also check out our webinar on experiential marketing and how to attract more customers to physical stores: a 100% organic strategy! 👇👇👇
