Understanding and Building Word of Mouth Referrals

A lot of companies spend time building out strategies and conceptual structures and market surveys about how to improve the word on the street about their product or service, and those efforts are completely counterintuitive. What these firms are after is word of mouth (WOM) marketing and it’s silly to try to manufacture it. Word of mouth marketing is not only organic but beneficial because it’s authentic. In terms of your bottom line, that means that word of mouth marketing can be encouraged but it can’t be artificially created or manipulated.

That doesn’t mean that word of mouth isn’t one of the most powerful tools in a company’s marketing arsenal. Statistics prove that even a little WOM can improve the overall impact of marketing campaigns by over 50 percent.

Understanding Word of Mouth Referrals 

WOM marketing is all about authenticity and connections. Think of it in terms of building a back-and-forth, ongoing relationship with your customers, rather than just talking “at” them. To break the concept down to actionable intelligence, word of mouth marketers and advertisers are looking to create something worth talking about, and then actively encouraging people to talk about it.

Just how effective is WOM marketing? Most businesses pour their resources into content development (read: websites and blogs), traditional advertising and digital advertising, all of which are fine but not nearly as cost effective or powerful as WOM. Nielsen research reveals, in fact, that over 90 percent of consumers will believe recommendations from family or friends over all other forms of advertising.

It’s important to note here that modern WOM marketing describes both targeted efforts to get the word out and naturally occurring instances where consumers share their satisfaction with a brand. But you can think of “targeted efforts” as digital and traditional ways to “spread the word” and not artificial ways to start a campaign to promote a brand, product or service. In other words, natural WOM is organic and happens because people are happy with something and have a natural desire to share their support and enthusiasm. Amplified WOM happens when marketers make efforts to port WOM into existing or new communities.

The Benefits of WOM Referrals

WOM reviews and referrals have many advantages, but you can break down the results of a strong foundation to these benefits:

• The ability to grow sales without spending money, time or resources on advertising.
• WOM marketing builds whatever you are selling into a community, not a commodity. An engaged fan base not only returns time and again to buy whatever it is you are selling, but also recommends their friends more often, extending your return on time spent in engaging customers.
• WOM offers more funding and more freedom than traditional advertising. High customer loyalty and repeat purchases can be hugely beneficial to any entrepreneurial enterprise and extend the brand into markets where it might not naturally reach.

Ideas for Building Word of Mouth

First, set up WOM “triggers” — that’s the thing that makes your business stand out from any other in your market or community. Visual triggers work remarkably well in this strategy.

More importantly, do or create something unique. That doesn’t mean you need to reinvent your business model but try to think of ways to market your business in a way that’s completely different from your competition.

It’s also important to encourage user-generated content, and if you can encourage the promotion of your product among online “influencers,” be they YouTubers, LinkedIn power users or bloggers with a huge audience, you can definitely spark more WOM referrals, regardless of your product or service.