- Word-of-mouth referrals are one of the most powerful resources of businesses of all kinds.
- Some ways to promote word-of-mouth referrals are to give away branded items, create a referral rewards system and send personalized follow-up messages.
- Some of the benefits of word-of-mouth advertising are that it's impactful and trustworthy.
It can be easy to become hyperfocused on digital marketing and sponsored advertising when promoting your business. However, few messages are as powerful as a word of mouth recommendation from a satisfied customer.
This form of spreading the word can be hard to track and optimize since it is largely up to a customer whether to share their satisfaction with friends and family in private conversations. However, there are ways to encourage and capitalize on word of mouth referrals.
Effectiveness of word of mouth advertising
According to Social Media Today, some of the benefits of word-of-mouth advertising are as follows:
- It's impactful: Studies have shown that 50% of Americans tend to choose where they shop based on word-of-mouth.
- It's pervasive: Another benefit of word-of-mouth advertising is that it is pervasive. In particular, 83% of Americans have made word-of-mouth recommendations, 55% make these recommendations on at least a weekly basis.
- It's trustworthy: Additionally, word-of-mouth advertising is also trustworthy. In fact, up to 41% of Americans trust word-of-mouth advertising.
- It's valuable: Another benefit of word-of-mouth advertising is that it's valuable. For instance, up to 99% of millennials choose their restaurants based on recommendations from people they know personally.
While an overall marketing strategy and budget are critical, trusted recommendations from satisfied customers can help build brand loyalty and bring new customers into the fold.
Here are some ways to make word-of-mouth recommendations work for you.
1. Give away branded items
Branded items serve two major purposes: they are a subtle way of putting your brand in physical spaces and building recognition, of course, but they are also effective reminders. Everybody loves free stuff, and the regular presence of your branding increases the likelihood that your satisfied customer brings your business up in conversation.
"We give customers nice branded items that they are likely to carry around like a Yeti tumbler, which is a great conversation starter and/or reminder," said Shawn Breyer, owner of Breyer Home Buyers.
At the very least, circulating branded items starts to build general recognition of your business in public and, at best, starts a conversation that leads to more sales.
2. Implement a referral rewards programs
Naturally, people are more likely to offer recommendations if they're getting something in return. Offering a reward, whether it's cash, a discount or even something as simple as a raffle entry, can incentivize satisfied customers to recommend your business when they might have otherwise forgotten.
"[We] offer people a $1,000 referral fee if they recommend someone to us and we buy their house from them," Breyer said. "We have a follow-up campaign to keep this in their mind in case they happen to come across a friend or relative that needs to sell."
Of course, your reward doesn't have to be cold, hard cash. Consider offering a discount to the referrer and the person they referred, thereby encouraging word-of-mouth recommendations as well as follow-through on the referred individual's part.
3. Capture customer recommendations digitally
Although word-of-mouth recommendations aren't digital, that doesn't mean you can't capture them and turn them into a pillar of your digital marketing strategy. If a customer offers positive feedback or refers new business your way, ask them if they would write an online review.
"Whether it be broad ratings and review sites like Facebook or Google, … industry-centric sites like Yelp or Angie's List, or … a service like TrustPilot, the goal is to build word-of-mouth into public, accessible proof-points," said Eric Quanstrom, CMO at Cience. "There are few elements of trust so powerful as seeing plenty of reviews for an SMB."
Once you've captured some reviews, Quanstrom added, consider tying them into your referral rewards and customer loyalty programs for an added impact.
4. Send personalized follow-ups
As a small business, one of your greatest advantages is being personal and relatable. Large companies can't interact with customers the same way a small business can, even in the day and age of live chats and automated email marketing. Leveraging your close connection to the customer to personally thank them for their patronage or send a small gift could go a long way to starting a conversation.
"Remember, [small businesses] can do things that larger enterprises rarely can scale … like sending hand-written thank-you [letters], or small tokens of appreciation, and incorporating individual customer's feedback," said Zach Messler, a small business messaging and positioning advisor.
5. Simply ask
Satisfied customers are often willing to spread the word if you just ask. Consider requesting a testimonial that you can use on your website and social media, or send follow-ups to customers asking for feedback and, if they're satisfied, to spread the word or write a short review.
"[S]end an email from the president or CEO thanking them for their patronage and requesting that if they were satisfied, they leave a review on a particular site," said Laura Troyani, founder and principal of B2B marketing company PlanBeyond. "The key to making this work is repetition. The entire process is a numbers game, meaning you have to cast a wide net and ask a lot of customers to get just one review."
It all comes down to customer engagement
At the core of encouraging word-of-mouth recommendations is engaging meaningfully with your customers. Offering incentives is great, but you want to speak to your customers on the personal level that only a small business can. If you do so, you might find that people are more enthusiastic about spreading positive information about your business.