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Finding new ways to generate ecommerce sales is getting tougher.
Competition is fierce. And simply having a psence and a nice looking web store is no longer enough to make you stand out.
But there’s one powerful area that tends to get neglected by ecommerce businesses:
Word of mouth marketing (or WOMM).
What is Word of Mouth Marketing?
- Traditionally, word of mouth marketing was spad from one person to another based on recommendation.
- Modern word of mouth marketing describes both targeted efforts and naturally occurring instances where users share their satisfaction with a brand.
Many best practices and marketing tactics encourage natural word of mouth, but campaigns – particularly on social media – can have the explicit aim of promoting an online business’ social exposure.
In the International Journal of Market Research, M. Nick Hajili wrote:
“Trust, encouraged by social media, significantly affects intention to buy. Therefore, trust has a significant role in ecommerce by directly influencing intention to buy and indirectly influencing perceived usefulness.”
Organic Word of Mouth vs. Amplified Word of Mouth:
The two have inherent overalps — and over a good WOM marketing strategy will cause icnreased organic WOM. Vice versa, if you already have a decent amount of organic WOM, your WOMM campaugns will be much more successful.
These two types of WOMM are called and defined as:
- Amplified word of mouth: Amplified WOM occurs when marketers launch campaigns designed to encourage or accelerate WOM in existing or new communities.
Word of Mouth Marketing Statistics
- Beyond friends and family, 88% of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts.
- And 74% of consumers identify word of mouth as a key influencer in their purchasing decisions.
- But only 33% of businesses are actively seeking out and collecting reviews.
- Despite that fact that a little, can do a lot. When specific case studies were analyzed, researchers found a 10% increase in word-of-mouth (off and online) translated into a sales lifts between 0.2 – 1.5%.
So in this post we go into full detail on the subject:
- What it takes to make word of mouth marketing work.
- Specific strategies (with real-life examples) for setting up a steady flow of referral customers.
Why Care About Word of Mouth Marketing?
Tactics such as setting up a cool social media ad or experimenting with AI in ecommerce may sound more exciting (and like quicker wins).
The Advantages of Word of Mouth Marketing:
- Build a community not a commodity: Word of mouth marketing works to build an engaged fan base rather than a buy and bolt customer. Higher engaged customers buy more often and recommend their friends more often, extended your return on time spent on the strategy and generating a high customer lifetime loyalty.
- More funding, more freedom: Brands with high customer lifetime loyalty and therefore repeat purchases receive more angel and venture funding. Why? Because CAC to LTV, or Customer Acquisition Cost to Lifetime Value, is considered one of the most important aspects of a healthy business model in the early days of a company’s lifecycle.
In fact, there are three crucial factors a quality WOM marketing strategy can affect:
1. Brand loyalty.
According to the National Law Review, it can cost five times more to acquire a new customer than keep a current one.
And Bain & Co estimate that a 5% increase in customer retention can boost a company’s profitability by 75%.
And think about this:
All of a sudden you’ve got a machine that’s pumping out new customers who are all loyal to your brand.
2. Brand trust.
In other words:
Word of mouth marketing means your brand is being recommended in the most trustworthy context possible. And first time browsers are much more likely to take that crucial extra step of handing over their payment details.
3. Creating a buzz.
It’s great to have ad budgets and perfect sales funnels. But the only way to create a genuine buzz about your brand is to have impartial people shouting about you in the media and on social networks.
And a good word of mouth marketing strategy severely increases the likelihood of this happening.
Impss the right person and you might even end up getting featured in something like the New York Times.
Next thing you know, Beyonce is knocking down their door to get a custom collaboration.
The collaboration made national headlines, including:
For Flash Tattoos, sales increased 1,100% following the collaboration.
Paid acquisition through channels such as Facebook, Instagram and Google have become significantly more competitive, which is putting increasing pssure on brands’ gross margins (when considering customer acquisition costs).
Brands thus have to focus on alternative marketing tactics, which have more cost-efficient unit economics and simply requires less of a monetary investment.
One of the best recent examples is Patagonia’s “The President Stole Your Land” campaign. Their tweet about this got more than 60,000 retweets. The overall campaign, which Patagonia targeted at their own customers, generated worldwide publicity and contributed greatly to their marketing efforts.
– Adii Pienaar, High King of Ecommerce, Conversio
Create An Epic Experience First
There’s one thing to make sure of before doing anything else before creating effective word of mouth marketing strategies:
That you’re already creating an epic customer experience.
Trying to get people to refer their friends and family to your business is almost impossible if they had a poor experience. Even with an average one it’s difficult.
You could even do the opposite and spark up a whirlwind of negative publicity.
And with 65% of consumers having cut ties with a brand over just a single poor encounter, it’s more important than ever to create that amazing experience.
Here are a few things you can do to make sure that happens:
WOM is Built-In Trust
People who arrive by other channels, by contrast, might know nothing about your store and have to be convinced first. Their levels of ‘trust’ are lower and conversions are correspondingly lower too.
In addition, if someone has had a good experience with your company and passes this message along they are also likely to point out helpful tips (i.e. be sure to pick up your discount coupon, or log in to get a free gift, etc) that make your offering more attractive to that person BEFORE they have even visited the site.
Word of mouth customers come with built in levels of trust and confidence that other channels don’t.
– David Mercer, Founder, SME Pals
1. Sell quality products.
It’s impossible to create a positive experience if what you sell just isn’t up to scratch.
Your business will fast become more about managing returns than anything else.
So being able to source and sell quality products is crucial.
Take a look at the negativity caused in this TripAdvisor review:
Yet their product (the food) and overall experience for the customer was totally lacking.
A poor review and a customer likely to spad plenty of negative word of mouth.
Create Good Products to Get Good Profit
Creating a great and personal experience around a high quality product can lead to all sorts of virality – online and offline.
The reverse is true as well.
If you treat customers poorly or sell lousy products, people will know and tell other to stay away. And because of social media, they can influence not only their friends but also friends of friends and beyond.
– Josh Mendelsohn, VP, Privy
2. Seamless order process and site UX.
According to justuno, 93% of consumers consider visual appearance to be the key deciding factor in a purchasing decision.
And a Forrester report claims better UX design could increase conversion rates by up to 400%.
A great example of this is the Carolina Panthers online shop.
They used BigCommerce to redesign their site to look amazing and be easy-to-use across all devices:
- 83% increase in mobile conversions
- 37% increase in overall conversions
- 16% decline in bounce rate.
A recent Loqate report claims that 49% of consumers would shop online more if they felt more confident about delivery and 57% are reluctant to use a retailer again if delivery is late.
So running a tight operation after a sale’s been made is crucial.
It’s hard to provide that positive, referrable experience while carrying around a reputation for backorders and order mishaps.
This means having bulletproof processes in place to perfectly manage your inventory without overselling and a seamless fulfillment system to ensure on-time deliveries.
While also being super speedy in responding to and resolving any mishaps that do occur.
Of course, there’s no one way of doing this.
Every customer interaction is different – but should be treated as an opportunity to impss.
It’s about being in the mindset of striving for excellence in every situation and always putting the customer first.
Zappos are the absolute masters of this. In fact, their CEO Tony Hsieh has regularly described them as a “service company who happen to sell shoes”.
The internet is filled with a multitude of what can be seen as small, yet powerful stories about how Zappos creates wow experiences for customers every single day.
They’ve even started turning them into cool promotional videos:
Ideas For Building Your Word of Mouth Marketing Strategy
Creating an epic experience for customers is sometimes enough to get some of them shouting about you and referring others.
You need to move away from hoping people tell their friends about you. And towards specific strategies that actively encourage people to refer.
Let’s take a look at some ideas to help you build you WOMM strategy:
WOM works for all verticals
– Ross Simmonds, Digital Strategist, Foundation Marketing
1. Set up word of mouth triggers.
A word of mouth trigger is your ‘x factor’.
The thing that makes your business stand out from any other in your industry or space.
This means giving your customers something memorable. An experience, thought or feeling they can’t get anywhere else.
And they’re left being almost forced (in a good way) to talk about you to others.
The Hustle, for instance, sends an ambassador promotion email anywhere from 2 weeks to a couple months after someone joins (they continue to test timing for effectiveness). Here’s the email they send:
Disney does an amazing job of this with their theme parks.
They create a stunning visual experience that people just want to take photos of and share with other people.
But this can be a little trickier to create when it comes to ecommerce.
You could create a website so stunning and unique that people just have to share it. But navigation, ease-of-use and conversions should always be your first point of call.
IKEA is a great example of a brand using a visual trigger to create word of mouth.
They were among some of the first retailers to embrace Augmented Reality in a big way and created a huge online buzz when launching their AR app:
3. Do or create something unique.
Creating something totally different and out of the box is another way to trigger people into spading the word about your business.
But that doesn’t mean you need to totally reinvent the wheel.
It could be that you market your business in a way that’s totally different to anyone else in your space. Or that you take an old product and sell it in a completely new way.
Dollar Shave Club is a fantastic example of both of these ideas.
Not only did they take an old product (a shaving razor) and sell it in a new way (via subscription to monthly grooming packages). But they also marketed themselves using self-depcating humour in an industry that’s mostly known for producing serious commercials of men with chiseled good looks.
In fact, they gained 12,000 customers within 48 hours of this initial YouTube video going live in 2012 (and it now has over 25 million views):
4. Emotional provocation.
Tapping into people’s emotions can be very powerful for generating shares and getting people to talk about your business.
This can be done via taking something you believe in and tying your company brand closely to it on your social commerce networks, your website and anywhere you can.
Android believe in their slogan “Be Together. Not the Same”. And their ‘Friends Furever’ video went on to become the most shared ad of all time by simply encapsulating this concept.
BigCommerce retailer Ben & Jerry’s also does this really well by attaching themselves to a cause they hugely believe in – environmentalism:
Content generated by your users, customers and followers can be much more powerful, engaging and shareable than run of the mill company updates and photos.
According to an Adweek infographic, 85% of users find visual UGC more influential than brand photos or videos.
Meaning engaging your follower base in a two-way conversation can encourage them to start shouting about your business on social media – effectively endorsing and referring you to their friends and followers.
Offering discounts for posts that meet certain criteria is one way to encourage this. Or running an ongoing social media competition on your own hashtag is another.
BigCommerce retailer Jeni’s Splendid Ice Creams does this fantastically well.
They have stores all across America and get customers to Instagram themselves enjoying their ice cream while using a special hashtag for the store they’re at:
Not every person is going to refer dozens of friends and family.
But that doesn’t mean they didn’t love their experience. And certainly doesn’t mean you can’t use their feedback to convince others to buy.
According to BrightLocal’s 2022 Customer Review Survey:
- Consumers read an average of seven reviews before trusting a business – up from six the pvious year.
- 85% of consumers trust online reviews as much as personal recommendations
- 49% of consumers need at least a four-star rating before they choose to use a business.
So feedback and word of mouth from your current customers is crucial.
That means collecting and prominently displaying honest reviews of your service and products in as many places as possible – marketplaces, websites, in-store, social media posts and anywhere else you can think of.
Alcoholic drinks retailer BeerCartel do this brilliantly on their BigCommerce store by prominently displaying product ratings in the top left and a reviews tab on the right:
A referral program isn’t going to trump a bad experience for your customers.
But offering systematic referral rewards is a great way to nudge happy customers into actually taking that step and introducing others to your business.
Texas Tech research has indicated that 83% of satisfied customers are willing to refer a product or service but only 29% actually do.
So gently pushing customers towards taking action on referrals could be a game changer.
Rewards could be anything from:
- Discount off next/first order.
- $X gift card for referring a certain number of people.
- Straight up paying people for referrals.
- Bonus gifts with next order for referring people.
Outdoor apparel retailer The Clymb does an awesome job with their referral programme, clearly highlighting it in their website header:
A key caveat to mention here though is that you need to know your customer numbers and metrics – especially average lifetime value.
There’s no point giving a reward of, say, $50 if your average customer only has a lifetime value of $25. You’re just throwing away money.
This is why reward programs lend themselves particularly well to subscription services or businesses that see high customer retention.
But knowing your numbers means you know how much you can afford to spend as a reward.
Not something most brands can do. But PayPal knew their numbers and created 7-10% daily growth in user base with it selling for $1.5 billion a few years later.
Today, PayPal continues to lead the payments industry charge. They even sell their point-of-sale system to ecommerce brands in the exact same way ecommerce brands sell to their own customers.
But if you can get 1 person to talk about your brand with 10 of their friends and 5 of them buy. And you repeat that for every customer that comes into your store – you’ll get so many sales you won’t be able to keep up with inventory and shipping.
– William Harris, Ecommerce Marketing Expert, Elumynt
Spark WOM among influencers
Some people have a strong social media and online following. And hold a lot of sway with their recommendations.
Research from Twitter and Annalect claims 49% of people say they rely on recommendations from influencers when making purchase decisions.
So getting your brand or products reviewed and talked about by relevant influencers in your industry can be a fantastic word of mouth strategy.
Some influencers you can outright pay to promote a product. But there are other ways too.
1. Send products for free.
Once you’ve identified relevant influencers, simply sending them one or some of your products for free can get them talking about it online.
Be careful not to expect or demand anything just because you’ve sent free product. Some of these influencers will get a lot of free stuff and they might not want to review it all.
Minimalistic watch retailer Daniel Wellington used this strategy almost solely to build their online business.
They simple sent one of their watches to selected Instagram influencers along with a unique discount code to include in any posts:
2. Connect with a worthy cause.
Following on from one of the above WOM triggers suggestions – influencers and celebrities are always wanting to show their support for causes they believe in.
Meaning you can gain serious word of mouth exposure while supporting something cool too.
Sun Bum sells sunscreen – without any of the typical bad stuff in it. They also make and sell sunscreen specifically for children’s skin. But that isn’t all.
Sun Bum partners with schools across the U.S. to bring in professional (and famous!) surfers from around the world to teach kids about the importance of sun protection.
Support for the project in the surfing community is huge. But it’s also something that many celebrities and key influencers are more than happy to promote and post about – plugging Sun Bum in the process.
Online app brand Vivino is beloved by wine novices and sommeliers alike around the world, but in the NBA — their share of influencers is far and wide.
“Shoutout to my Vivino app,” says Warriors point guard Stephen Curry. As Kevin Love, the 5 time basketball All-Star and NBA Championship winner, says, “It’s like Netflix for wine.”
For Blazers guard CJ McCollum? “It’s life-changing.”
But it’s imperative to start with the fundamentals.
It doesn’t matter how many marketing consultants you hire, amazing ecommerce conferences you attend or new age growth hacks you try. If you can’t provide a quality experience for customers and run a tight operation then you’ll fall short somewhere along the way.
Get this right first and then use the strategies in this post to keep multiplying your happy customer base over and over.
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