One of the best sources of new business for most small businesses is Word of Mouth Marketing. One of the biggest benefits of word of mouth marketing and referrals is they are free and the leads are warm, not cold.
Did you know 92 percent of consumers say they trust word of mouth from friends and family more than other forms of advertising?
The big difference we see today with word of mouth is it is not only happening in person, but it's happening online too.
Many people are using online reviews to influence and make purchasing decisions. If you do a solid job of managing your online reputation it will have a huge impact on your word of mouth marketing and the growth of your business.
Check out this chart that shows the trust level in different forms of advertising...
The top two trusted sources are both word of mouth marketing. See how important personal recommendations and online reviews are?
So what exactly is word of mouth marketing and how is it different from referrals?
Well, let's find out.
What is Word of Mouth Marketing?
Word of mouth marketing is an oral or written recommendation from a satisfied customer to a prospective or potential customer of a business.
Word of mouth marketing has a snowball effect that can either MAKE or BREAK a business.
Just like good word of mouth, a bad customer experience can spread very quickly. It can cause a decline in sales and damage your brand for a long time.
So how do referrals and referral marketing play into word of mouth marketing? Is it different from word of mouth marketing?
Let's take a look...
Word of Mouth Marketing Vs. Referral Marketing
Referral marketing is a segment of word of mouth marketing. While they both occur when people tell each other about their experiences, referrals are more direct and personal. Referrals happen when someone recommends a business to friends, family, and people they know.
The fact that such a high percentage of consumers make decisions based on referrals is great news for any small business.
Referral programs are among the least expensive marketing tactics you can use to jump-start your business.
Here are a few tips to boost your referrals:
- Ask for referrals - This is as simple as asking every customer for referrals. You can include a note in newsletters, marketing materials, and invoices or you can also call customers.
- Employee training - Employees must be equipped to ask customers for referrals. Train them on the importance of asking, how to ask, and when the best times to ask are.
- Strategic partner referrals - Finding other businesses that complement yours and building a relationship with them can be amazingly productive. Although they may not be a customer of yours, they have the potential to refer a lot of business your way. For example, a painter and a window/siding company would be great strategic partners.
Now let's take a look at how referrals and word of mouth marketing can be combined with digital marketing tactics to make them even more powerful.
Word of Mouth Marketing & Digital Marketing Combined
Word of mouth has changed dramatically over the years, especially in today's digital world. It has evolved from face-to-face, and now includes online conversations...word of mouth marketing has gone digital!
Traditional word of mouth still works, but small businesses should embrace digital marketing to reach a bigger audience and boost their word of mouth.
The two most important channels of digital marketing that impact word of mouth marketing are social media and reputation management.
WOM and Social Media Marketing
One of the easiest and most convenient ways to connect with people online is through social media.
Facebook, Twitter, Instagram, and other social media platforms have made communication as fast as lightning. Today, a recommendation for a business can spread quickly with a single status update.
Savvy businesses are using social media to encourage customers to post about their business online. You never know if those posts will go viral and promote your business in ways you never thought possible.
WOM and Online Reputation Management
Focusing on online reputation management will have a huge impact on your business.
Monitoring what is being said about your company online and having a system in place to consistently receive online reviews will pay dividends for your business.
Online reviews are the online equivalent of referrals in the offline world. When a potential customer searches for your business online what do they find?
Having a ton of helpful, positive reviews go a long way in encouraging people to choose your business. In the digital age, a solid word of mouth marketing plan focuses on both online and offline referrals.
Tips for Improving Word of Mouth Marketing
Just like a number of other marketing channels, word of mouth marketing can take time to build momentum.
Here are a few tips you might find helpful to grow your referrals and word of mouth marketing.
1. Know your brand.
Before you start spreading the word about your business, it's important to know who you are and what makes you unique.
Word of mouth marketing will really work in your favor if you have your positioning in the market nailed down, which means you need to have a solid marketing strategy in place first.
2. Understand your competition.
Do you ever wonder why some of your competitors are growing rapidly?
If you do, then it's time to do some research. Spend the time to find out what they are doing that you are not.
Research their strengths, weaknesses, strategies, and tactics.
Ask yourself these questions:
- What can I do to be better than them?
- How are they different from me and how can I benefit from this?
- Are there any weaknesses I can capitalize on?
Part of being "referrable" is being unique, different, and standing out from your competition.
3. Define your audience.
There are billions of internet users globally but not all of them care about your business.
Word of mouth marketing isn't just about knowing your brand but it's about understanding your AUDIENCE as well.
It works better if you know who they are and what they need. The best way to define your audience is to outline what an ideal client looks like. Sometimes these are referred to as buyers personas too.
Buyer personas are fictional, generalized representations of your ideal customers. They help you understand your customers better by tailor fitting your content, messaging, product development, and services to their specific needs, behaviors, and concerns.
When your business really speaks to specific types of people there is a higher likelihood customers will refer you to similar people they know.
4. Establish a referral program.
Referral programs can go a long way in keeping referrals top of mind for your existing customers.
There are all kinds of referral programs. The important thing is to find one that resonates with your customers and run with it.
Check out these referral program ideas to get your creative juices flowing.
5. Be unique.
Do you remember this campaign from Old Spice? This campaign went viral and was wildly successful.
It is still one of the most unforgettable commercials ever produced. This video now has over 55 million views on YouTube. What made it special is its uniqueness.
It combined humor, entertainment, and relevant facts which engaged consumers.
If you can do the same in your marketing campaigns, word of mouth will spread quickly. Content like this gets shared and spreads like wildfire.
For another powerful example of this, you can check out the Dollar Shave club video too.
6. Build an engaged social community.
According to Convince & Convert, 72% of marketers say social media helps them develop loyal fans.
Small business owners with an engaged community have the ability to generate tons of word of mouth about their business. Shoot for quality over quantity.
I'd much rather have 1000 truly engaged fans than 10,000 that aren't. Why? Those 1000 fans will engage with your content and share it over and over again.
7. Collaborate with influencers.
75% of professionals consider influencer engagement effective in lead generation.
Social influencers already have followers you can benefit from and working with them should be a priority. Influencer collaboration is becoming more accessible because of platforms like Youtube and Instagram.
Influencers can help you improve your products and services and increase your network of followers.
8. Get personal.
Robots are cool but you just can't replicate the human touch (at least not yet). When people are connected to your brand on a personal level, word of mouth is easy to spread.
Customers are likely to recommend your brand when they become part of your community (remember #7 above).
How do you do this? Be human...we are very social beings. Let your community know you are more than just a business. Let your community know who you are, who your employees are, your likes/dislikes, and what's important to you.
When people can connect with the people behind your business things become much more personal. Gary Vaynerchuk is great at this. He is real, tells it like it is, and lets his audience know about his thoughts and beliefs.
9. Invest in customer experience.
Let's face it, customers only talk about exceptional service or bad experiences. Mediocrity is always ignored.
Not only that, customers are much more inclined to discuss a bad experience first!
To generate consistent, high-quality word of mouth marketing your business must have an amazing customer experience.
Again, recommendations start from personal experiences. An excellent customer experience must dazzle and impress at every touch point with a customer.
10. Reward loyalty.
Customers want to feel privileged and special. They want their relationship with your brand recognized and the best way to meet this is by rewarding your loyal customers.
The 80/20 rule is alive and well when it comes to your best customers. I think you'll find in most cases that 80% of your business is generated from 20% of your customers. This 20% of customers are like gold.
Find ways to create customer loyalty in your business and people will keep coming back time and time again...they'll also talk about your business with everyone they know!
Are you one of the 100+ Million Amazon Prime members? Amazon's Prime membership is a fantastic example of a loyalty program that works like crazy. The benefits included encourage you to use Amazon and it's various products and services.
I buy way more stuff from Amazon now that I'm a Prime member, and I know I am not alone.
I personally believe that word of mouth marketing was, is, and will always be a powerful marketing channel for small businesses.
How much of your business comes from word of mouth? What tactics have helped you generate more word of mouth?
Feel free to comment below and share.
Are you looking for more solid local marketing tips and tricks? Check out our Ultimate Guide to Local Marketing.
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