Welcome to our word of mouth marketing guide. Word of mouth comes from a variety of places and can be unpredictable and hard to control. This guide shows you how to influence the word of mouth that surrounds your brand so that you get more customer referrals.
What is word of mouth marketing?
Word of mouth marketing is when messages spread between people about your product, service or brand. Word of mouth marketing is free, although organizations typically invest in conscious efforts to make it happen. And the people doing the word of mouth ‘spreading’ are invariably customers talking about their positive experience. You sometimes see word of mouth marketing referred to as WOM marketing, for short.
Why is WOM marketing important?
Word of mouth marketing is important and valued because customers care what ‘other people’ (particularly people they know and trust) say about products and brands.
Word of mouth marketing is based on an informed opinion. And rather than informed opinions given by professional parties (a good example would be motoring journalists who review new cars), word of mouth marketing doesn’t really rely on expertise.
The only real qualification for word of mouth marketing to have an effect on someone, is that the person the word of mouth comes from is someone like you. For example, someone who goes on similar vacations with the same kind of budget for an annual trip giving word of mouth about a new destination they recently visited. People generally have circles of friends and acquaintances from the same social class and level of affluence. This makes word of mouth an authoritative source of insight into the kinds of things customers feel they should know about or try.
Word of mouth marketing is especially important when:
- Hearing about new products and brands for the first time. According to data from GWI, word of mouth marketing is the 4th most-cited source for brand discovery, after search engines and ads on TV and online.
- Researching how to solve problems using different products, services and suppliers
- Validating shortlists or final choices of organizations to buy from e.g. by reading customer reviews
Authenticity is key to word of mouth marketing
Word of mouth marketing relies on authenticity and trustworthiness. People are constantly skeptical about advertising claims. What they want is something they can trust. So, if during a conversation with a friend or relative, the subject of a recent positive experience comes up, or the friend/relative asks “have you heard about X?” – the customer is hugely receptive to the message that lies within.
This throws up a significant challenge to marketers: you can’t influence word of mouth marketing by twisting messages or turning up the volume. There are no shortcuts. You’ve got to do things that act as the catalysts for people to proactively communicate word of mouth marketing on your behalf.
7 ways to build word-of-mouth marketing
Here’s our comprehensive list of ways to build word of mouth marketing for your organization.
Build word of mouth by having a great product/service
Nobody said this was going to be easy. But the surest way to generate word of mouth is to have a great product to offer your customers. Having a product that’s truly differentiated can really get people talking. Perhaps it’s the way it addresses hard-to-achieve customer requirements. Or it might be a beautiful and elegant design. Whatever it is, it delivers on what customers expect from it and more.
Build word of mouth by fixing problems and keeping your promises
Another hallmark of businesses with great word of mouth is amazing customer service. Customer service and support come into their own when tested with difficult, annoying or serious customer problems. Ideally such problems would never happen, but that’s just life — sometimes things go wrong and it’s how you react to those issues that matters.
Customer support experts often talk about a phenomenon known as the service recovery paradox. This is where customers who have experienced a product or service failure are so pleased with the fix they received that they are more positive toward the brand than if the issue had never occurred.
This ties in with the classic business lesson, popularized by Janelle Barlow and Claus Moller’s best-selling book, that “every complaint is a gift”. The thinking behind this is that, with angry or disappointed customers, the only way is up, and by demonstrating how you confront a challenging problem successfully, you earn significant trust.
What has any of this to do with word of mouth? Well, making a difference here is often all it takes to get people talking about their experience with others.
Build word of mouth by being remarkable
The definition of being remarkable is “something worthy of remark”. In other words, something that happened which, in and of itself, generates the desire to communicate it. What we’re talking about here is remarkable experiences; experiences that just have to be told to others.
Making remarkable experiences happen is often mistaken for having a high cost or effort. That’s sometimes the case, but not always. Typically it’s something quirky or just doing something thoughtful for the customer. It might be the fact that your experience is breathtakingly effortless. Or it could be that your brand has picked up on the “same-old, same-old” facets of an experience at say, a hotel, and changed the way things work to provide something unexpected and different. We look at a few examples of this below.
It helps if you can give your customers a new vocabulary for the kinds of things you do for them and that are different and special about the experience you provide. This helps make the stories your customers share more identifiable as being about you.
Build word of mouth by making experiences memorable
The fast pace of life means that few experiences really stick in the memory. It’s the ones that stand out you remember. And you remember these things because they are emotionally significant to you: they made you happy, surprised, flattered, disappointed, upset…
By contrast, we forget things that don’t stand out. So if you contact your bank, or meet a friend for lunch, or visit a store, each of these has just as much potential to make a forgettable experience as a memorable one.
Leonard Berry’s concept of the ‘zone of tolerance’ describes this potential for memorability and forgettability. Any interaction with a customer can be mapped across this framework. If it was a great experience in lots of positive ways, there’s a good chance that it will escape the zone of tolerance and ‘stand out’ as a memory the customer will want to share via word of mouth. The same is true of a notably poor experience; so poor that it drops out of the zone of tolerance and is memorable for all the wrong reasons.
It’s worth bearing in mind how your customers are emotionally affected by the experience you provide. Do you provide an adequately forgettable experience? If so then all may be well, just don’t expect any word of mouth. Only by standing out will people talk about you – for better or worse.
Build word of mouth by hiring amazing people and fostering a customer-centric culture that everyone buys into
It’s the people who make your business unique. Getting the right people, equipping and supporting them, and engendering a progressive team culture and purpose – that can really help your word of mouth.
This approach is similar to the “have a great product” one. It’s easier said than done. But it should be obvious to see why it matters so much. Providing a remarkable, memorable experience requires your people to really step up. They are the ones who must make the connection with customers. They hold the key for so much, and can often be the magic element in an experience that makes customers spread word of mouth.
Build word of mouth by encouraging reviews
Positive word of mouth comes from happy customers, so it pays to know who your happy customers are. If you think you just “wowed” them (or better still, they’ve said you just “wowed” them) then you have a window of opportunity to convert that goodwill into a tangible word of mouth-driven asset.
It all starts with real-time, all-the-time customer insights driven by customer feedback. This means that, right after an interaction or ‘experience’, you can see where word of mouth could be coming from next. And once you do, it’s a case of helping to amplify it to the widest possible audience.
Build word of mouth by being present and involved in the debate
Another way of thinking of word of mouth is as the result of PR activity. This is where proactively creating content, issuing news and briefing influencers puts the brand into the public eye, in relation to relevant debates and topics. Social media is a significant dimension to this approach, using social media accounts and feeds to interact with key individuals, stimulate viral content and take positions on important issues.
Many organizations embrace a multilayered strategy to this approach, including direct customer engagement, influencer relations, media relations (business, trade) and community programs. In some instances this extends to activism and campaigning on social issues.
Word-of-Mouth marketing examples
The Magic Castle Hotel
The Magic Castle Hotel is not a premium property. It doesn’t have 5 stars. It doesn’t cost $1,000 a night to stay there. And yet here is an LA hotel with arguably the best customer ratings of them all. Why? Because it offers an amazing customer experience.
Its strategy is simple: it puts itself in its customers’ shoes and asks, how would you like things to be?
This mindset has inspired plentiful creative ways of generating sheer, unbridled customer delight. Like the Popsicle Hotline – a red phone at the poolside that’s always answered “Popsicle Hotline?!” Then out comes a white-gloved employee with your choice of free popsicles on a silver platter.
Need clothes washed? Magic Castle will do your laundry – as much as you need – at no charge, wrapped up in brown paper, twine and a sprig of lavender. Want a snack? You can have whatever you want – full-sized chocolate bars, potato chips, candy, cookies – unlimited and for free, 24 hours a day.
They sound like gimmicks – they aren’t. They’re a smart way of appealing to basic human psychology. People love surprise and delight. Using the Popsicle Hotline might only take up 15 minutes in a 2-week vacation, but it’s the kind of ‘moment’ that gets remembered and talked about. And it costs next to nothing.
We’ll stick on the subject of hotels for this next example too. It’s pertinent because hotels are among the most complained about customer experiences. The Magic Castle approach is to dazzle with quirky, delightful ‘moments’. Virgin Hotels’ starting point was to acknowledge that people get very frustrated with the kinds of things hotels make them do. They saw their opportunity to remove friction, stress and delay from the hotel experience.
Virgin started by looking really closely at things that irritated guests and resolved to get rid of them. So, no resort fees or Wi-Fi costs. In fact a strict ‘no nickel-and-diming policy’ was instituted. Everything in the minibar would be available at market prices, not $5 for a Snickers bar. Check-in processes were made much easier and more relaxed too.
Exemplifying this attitude to making life easier, every phone handset in every Virgin Hotel room has a ‘YES’ button on it. Press it and you reach reception, whose job it is to move heaven and earth to attend to whatever you request.
Virgin also does a great job of giving customers a vocabulary to tell stories about them. It calls its hotel rooms “chambers” that divide into “The Dressing Room” and “The Lounge”. Every Virgin Hotel has a ‘Commons Club’ where guests are free to mingle with locals. The loyalty program is called ‘The Know’, as in: its members are ‘in The Know’. Each of these makes it simple for customers to relay their experiences to others.
Suzuki GB has carved out a reputation for customer service that’s so good it has people talking about it. The company is routinely top of the automotive sector for NPS scores and it has been recognized by the UK Institute for Customer Service for its excellent standards. So how does it do it?
It all starts with a good product of course, but Suzuki also fundamentally understands that the two most stressful and problematic aspects of car ownership are purchasing and servicing. On the purchasing side, Suzuki salespeople are not rewarded for hard-sell tactics. Customers comment that the company’s competitive prices and generous part exchange packages make the experience better too. And customers get the red-carpet treatment when servicing their vehicles, being provided with VIP extras like free valeting, refreshments and courtesy vehicles.
How to get more word of mouth referrals in 2022
Here are 3 ideas to ramp up your word-of-mouth efforts to get more referrals in 2022.
1. Mystery shop yourself for remarkability
If you want to create a customer experience worthy of remark, you need a place to start. The foundation piece is understanding the current experience through the eyes of existing customers.
Mystery shopping is often outsourced to expert third parties. This is to maximize impartiality and get a qualified external view that’s separated from any risk of institutionalized thinking. But that shouldn’t stop you really getting inside the mind of one of your customers by taking on some of this responsibility yourself. Consider the following:
- Become a customer by ordering products/service (under an alias)
- Calling up your customer support center with a query
- Undertaking some customer processes like returning a product, making a complaint, etc.
The test you need to make is, what was worthy of remark? More to the point, what could we change to be more remarkable? Then it’s a case of making some changes and testing out how customers feel about them. You’ll need a customer feedback system in place to be sure.
2. Measure NPS and have a strategy for promoters
Word of mouth marketing is notoriously hard to measure, but one useful metric that relates to customer loyalty and referral is Net Promoter Score® (NPS). NPS scores are calculated by finding out what proportion of your customers are highly likely to recommend you to others, relative to what proportion are highly unlikely to recommend. If all you want is an NPS score, then go no further. But if you drill deeper into the NPS ‘promoters’ you’ve identified, there’s a lot you can do to influence them further – such as amplifying their word of mouth.
Again, this hinges on your customer feedback system – the one you use to conduct NPS surveys. Once you receive a 9 or 10 NPS rating, what should you do next? Ultimately, you should be communicating with your NPS promoters about:
- Why they are so positive, and what aspects of their experience made them give that score? This will help you identify which aspects of your customer experience are making the biggest difference; even being remarkable and memorable.
- If they’d like to participate in promotional activities such as case studies, testimonials and reviews. At the very least, give them some links to where they might like to leave a review about the great experience they just had.
Any post-feedback response needs to be immediately following receipt of the feedback. This will help ensure the conversation continues and you get more word-of-mouth value from it.
3. Give happy customers an outlet for recommendations with a structured and incentivized referral program
If you don’t have a referral program in place, now’s the time to build one. If you do, why not look again at how it’s performing and what improvements may be necessary?
Referral programs are a great way of enabling customers to make good on their intention to recommend you to others. In other words, it’s an outlet for them to articulate a real recommendation and benefit from it too.
Referral programs provide an incentive to the customer providing the referral, plus often a discounted rate to the new customer prospect. The idea is to pitch it as a win-win for all parties concerned. Here are some ideas for setting one up:
- Promote it effectively among existing customers who are loyal. Make it clear what customers get from referring you to others. And remember to thank customers when they refer you, even if you’re already giving them a reward too.
- Choose a referral incentive that your customers will value. An incentive for one group of customers won’t work the same for another group. Consider whether customers might prefer money off their next purchases versus having a charity donation given on their behalf. Show customers how they benefit when they refer multiple customers, so they understand the value of recommending you regularly/to more of their contacts.
How to build a word-of-mouth marketing strategy
Consider the following steps to create a strategy for word-of-mouth marketing.
STEP 1: Set strategic goals and get management buy-in
This is the first step for any strategic endeavor. Set some SMART objectives that align with your business goals. Relate what you want to achieve with word of mouth to measurable business metrics like customer retention and repeat revenue. And get sponsorship from the top of your organization. Successful word of mouth marketing goes beyond the activities of a marketing department. It’s all about the customer experience. Building a great product or service, and delivering fantastic customer support, are crucial too.
STEP 2: Assemble a team and assign responsibilities
Now bring a team together to focus on the goals you’ve set and execute your plan. This will need to be a multidisciplinary team with lots of different skills. Just as importantly, everyone on the team needs to have a customer-first mindset that looks from the outside-in, not just from the inside-out.
There’s a lot of ground to cover with word of mouth marketing, so get organized to avoid duplication and inefficiency. Across the business you’ll need to consider the following and more:
- Social media operators, to track volume and specificity of visible word of mouth and to amplify it where possible.
- Customer support leaders, to optimize support performance and be closely aligned to customer satisfaction and trending topics.
- Customer success staff, to work with top customers on promotional activities and build customer referral programs.
- CX professionals, to understand customer journeys and insights and use this to design remarkable and memorable experiences.
- Product development / service delivery, to work on distinct features and improvements that stand out in the market
- The IT team, to ensure the optimum use and integration of tools (CRM, customer feedback, etc.) and data.
- Data analysts, to crunch the numbers both in terms of customer metrics and financial information.
STEP 3: Build customer journey map and overlay the zone of tolerance
You need to build a comprehensive picture of the customer experience in the context of individual processes and the interactions and touchpoints that facilitate them. What do your customers go through? How is it for them?
A good practice is to overlay a ‘zone of tolerance’ onto your customer journey map, using customer feedback insights to show which parts inspire an emotional response. Where are you breaking out of forgettability, or at least getting close to it? Are you in danger of having aspects of the experience be remembered for the wrong reasons?
STEP 4: Baseline extent of current WOM
Next you get to ground zero with a complete assessment of your current word of mouth reach. From here, the only way is up. You need to ascertain the extent of:
- How many customers say they’ll recommend you and what things do they have in common? What aspects of the customer experience are most worthy of recommendation?
- How much is your brand being talked about on social media?
- How often are you asking customers what they find memorable or remarkable about you? Are you getting rich insights on what they love or hate about your customer experience?
- How well are you facilitating customers who wish to refer you to friends and family? Are you incentivizing this? Or tracking it in any way?
STEP 5: Create a response plan
Now you need to create a system for capitalizing on word of mouth. Specifically, each of the following:
- Leaping into action to follow up with your ‘NPS promoters’ to find out why they want to recommend you and encouraging them to spread the word.
- Taking full advantage of the ‘service recovery paradox’ to escalate fixes to service failures and deal with complaints so that you turn unhappy customers into advocates.
- Being equipped to respond to social media mentions where it makes sense to join the conversation about your brand, or stimulate conversations and user-generated content proactively.
Lots of triggers for word of mouth marketing will come from your customer feedback engine, so make sure this is well-tuned and fuelled up with engaging survey questions. A response planner might look like this:
STEP 6: Survey new customers on word of mouth source
This step connects the arrival of new customers and revenue with word-of-mouth origin. New business comes in for all sorts of reasons and this step is essential to evaluating sources of influence. Marketing teams should already be pushing for something similar to help attach success rates to their marketing and advertising campaigns.
It requires you to ask customers why they decided to buy from you; specifically if they came because of a recommendation or referral. Once you’ve tracked this for a few months, you’ll get an accurate picture of how much your business is relying on word of mouth for its revenue. It should also give you an idea of how much more revenue you stand to gain if you increase word of mouth activity. For example, if word of mouth accounts for 10% of new business (let’s say $100,000 a year), then you can see what effect there will be of doubling this proportion. Also, if $100,000 is how much you stand to gain then that’s a good ROI yardstick for working out what level of investment is appropriate for achieving that goal.
Increasing word of mouth referrals shouldn’t have any negative effect on other sources of new business i.e. if word of mouth increases as a proportion of revenue, it doesn’t mean other sources will decrease in actual revenues.
Can you measure word of mouth?
It is notoriously difficult to measure word of mouth. There are just too many private conversations that brands never get sight of. This obscures the true picture of just how much you are being discussed by customers, and what those conversations are really about.
Social media word of mouth
That being said, word of mouth measurement has gotten easier with social media. Brands’ social listening programs are geared to pick up heightened trends in subject and sentiment. So if something remarkable happens one day, the social media team can swing into action to amplify the positive messages. It could be a single customer with something to say about the experience they just had – and we’ve all seen how quickly these things can go viral.
Promoting stories that bubble up from real customer experiences is one of the ways that brands can identify word of mouth and measure the effect of amplifying it through their social media channels. The other, related tactic is to use social media to encourage user-generated content.
Beyond social media are the other measurement processes associated with customer feedback. This is where you engage with customers to determine whether their behavior is as a result of word of mouth marketing, or whether their experience is likely to lead them to spread word of mouth on your behalf. In support of this, some of the feedback you can ask customers for could include:
- Their ‘source of business’, when signing up as a customer during the onboarding process. For example, asking them to state where they first heard about your company e.g. advertising campaign, news story, recommendation from friend, etc.
- Quoting referral codes they have been provided with by friends/contacts as part of a customer referral program
- An Net Promoter Score® (NPS) rating, showing how likely they are to recommend you to other people.
Word-of-mouth marketing statistics and findings
Here are some of our favorite word of mouth marketing stats:
- Word of mouth is the primary factor behind 20–50% of all purchasing decisions (McKinsey)
- Customers that have been referred by other customers generate 25% higher profits, are more loyal (18% lower churn) and accrue 16% higher customer lifetime value (Goethe University / Wharton Business School)
- Consumers who rely most on word of mouth are most likely to come from North America, 15% more likely to be female and 10% more likely to be in the top 10% of earners (GWI)
- 88% of consumers trust recommendations from people they know (Nielsen)
- 73% of consumers only pay attention to reviews written in the last month (BrightLocal)
Find out what your customers are thinking
Deploy customer feedback opportunites along your customer journey using Customer Thermometer. Our free trial should give you plenty of opportunities to experiment with fast, effective feedback surveys. We integrate with practically every platform and generate some of the best response rates in the business. Simply fill out the form below and fire up your customer feedback program.