7 Tips for Generating Word-of-Mouth Advertising

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Word-of-mouth advertising occurs when your customers tell other people about your products or services. It's one of the most powerful marketing measures that your small business can utilize because research consistently shows that consumers trust the opinions of others — even strangers. Even one person recommending (or not!) your brand can influence someone's future purchasing decisions.

Word-of-mouth advertising can be both positive and negative, so it's important for your brand to do its best to create an excellent customer experience to generate positive reviews and recommendations. Although it may seem like you don't have any control over word-of-mouth marketing, you can develop strategies that encourage people to leave online reviews or recommend your brand to friends and family.

Why Is Word-of-Mouth Advertising Effective?

Consumers trust recommendations from their friends and family more than any other source of information about a brand, including the brand's own website and marketing strategy. Online reviews come in at a close second as the most trusted source of brand information. Inc. found that 84% of people trust online reviews as much as their friends and family.

These statistics mean that word-of-mouth advertising is the most effective marketing tactic your company can pursue. All of your other advertising strategies will continue to be important, but online reviews and positive recommendations are extremely valuable and should be encouraged as much as possible.

The Cost of Word-of-Mouth Advertising

Word-of-mouth advertising is extremely cost effective. It's easy to encourage and yields valuable results. To maximize the number of positive customer reviews and promote as many conversations and recommendations as possible, you can take a more active role and funnel some of your budget toward some initiatives meant to promote word-of-mouth marketing.

Most of the hands-on strategies involve your current marketing efforts, such as social media and email marketing. Leveraging these outlets to generate word-of-mouth advertising doesn't require any extra funding. Other tactics, like developing a referral program or a rewards program, can be scaled to fit virtually any budget.

How to Promote Word-of-Mouth Advertising

Promoting word-of-mouth advertising is as simple as looking at all front-facing aspects of your business and asking, "Does this impress our customers, or can we do better?" In short, you want to create such a great experience for your customers that they remember your brand, become repeat customers and feel compelled to share their discovery with their friends and family.

In addition, it's essential to get in the habit of asking for online reviews. People are busy, and most people tend to forget to leave a review about a product that meets expectations. Just a simple nudge can generate more reviews and more trust in your brand.

To start, get together with your marketing team to discuss how to reframe your efforts toward promoting a word-of-mouth marketing strategy. You may be surprised by the number of opportunities that are right in front of you.

1. Give Great Customer Service

Poor-quality customer service can dash your hopes for positive word-of-mouth advertising, even if you do everything else right. Customers won't want to brag about your company unless they feel confident that their friends and family will be treated with respect. Don't give your customers any reason to feel embarrassed for recommending your company.

Create happy customers by:

  • Offering easy access to customer service reps through as many channels as possible: email, telephone and social media messaging.

  • Quickly responding to customer inquiries by avoiding long telephone wait times and striving to respond to all messages within 24 business hours maximum.

  • Handling returns and exchanges both online and over the phone without any trace of accusation or a convoluted process.

  • Maintaining a positive and personable attitude in all interactions so customers feel like they're talking to a human, not a robot.

2. Create a Referral Program

To maximize word-of-mouth advertising, consider sweetening the pot to encourage more people to talk about your company. One way to do this is through a referral program or affiliate program, which can be as simple or sophisticated as you need it to be. Small, service-based businesses, for example, can simply ask new customers who referred them and then apply an appropriate credit or reward to the referrer's account. For example, a roofing company might provide a free roof inspection to anyone who refers a new client.

For online businesses, you can use a digital system that tracks referrals by assigning a unique referral code or URL to each participant. When someone makes a purchase after clicking the link or enters the referral code at checkout, the referring customer's account can receive a reward, such as a special discount code, a freebie product or store credit.

3. Create a Loyalty Rewards Program

Everyone loves a great deal, so your customers are likely to tell their friends and family about your brand if you frequently offer discounts and savings. A loyalty rewards program goes a step further by encouraging repeat business, and in turn, customers have more opportunities to be impressed by your brand. They'll naturally want to share their experiences when they've transitioned from a one-time customer to a loyal repeat customer.

A loyalty rewards program differs from a referral marketing program because it rewards customers for their own purchases, not for a friend's purchases. A loyalty program could be as simple as a punch card or as sophisticated as swiping a special points card at checkout.

Rewards programs typically work by offering a discount or in-store credit for every $10 (or $50 or $100 — it's up to you) spent. The more money someone spends on an order, the greater the reward. If you've ever hunted around for something extra to buy in order to reach the minimum dollar amount to qualify for free shipping or 25% off your order, then you know exactly how powerful these rewards programs can be in terms of generating revenue and building loyalty. They're also likely to come up in conversation when friends swap shopping tips.

4. Work With Influencers

Partnering with social media influencers is the modern-day equivalent of paying for celebrity endorsements. Influencers tend to have a large number of followers who regularly interact with their posts on social networks like Instagram, YouTube or Facebook. Because these individuals have created a connection — almost like a virtual friendship — with their followers, they are well-respected and are able to influence their followers' opinions and actions.

Influencers exist in virtually every niche, so you're sure to find one who shares your target audience. Expect to pay influencers to become brand ambassadors and talk about your product or strategically place a specific product in their photos and videos. Successful influencer marketing campaigns will create a cascade of word-of-mouth advertising. Once their followers buy your product, they'll be just as keen to show off the fact that they have the same great taste as the influencer.

5. Ask for Online Reviews

The more positive reviews you have, the more trustworthy your brand appears to newcomers, which makes them crucial for effective word-of-mouth advertising. Online reviews can appear on multiple platforms, including Facebook, Google My Business, Yelp, the Better Business Bureau or industry-specific directories. Pick one or two that seem to get the most traffic and start asking people to leave reviews on those sites. Many people need that gentle nudge to remember to leave a review and will be happy to do so.

To ensure you remember to ask for a review each and every time, make it an automated part of your process. For e-commerce sites, send an automated "How Did We Do?" email a few days after the order is delivered. Briefly explain that reviews help both your team and your customers. Embed a review form directly in the email or link to the page where reviews can be left.

For brick-and-mortar transactions, staple a card to each receipt that asks for an online review and directs customers to the site where they can share their feedback. Verbally draw their attention to the card as well. Have a prominent sign at your cash register that also reminds customers to leave a review. Although you don't want to get too pushy with these reminders, you also don't get what you don't ask for.

6. Leverage Social Media Marketing

Partnering with a social media influencer is just one way to leverage social media marketing as a way to encourage word-of-mouth advertising. You can also use your company's own social media channels to encourage people to share your posts and talk about your brand. Your social media content needs to satisfy two requirements to promote word-of-mouth advertising: It should make current subscribers want to share it while also making new viewers want to subscribe to see more content just like it.

What works for one brand or industry may not work for another. People share humorous posts or memes regularly on social media, making these posts ideal for viral marketing. Informative posts and videos also tend to do well, especially if they show a behind-the-scenes look at your process. When you share posts on social media, you don't have to make them overtly salesy all the time. Use content to establish not only a following but also a reputation for quality content, products and services.

Periodically use your social media platforms to highlight glowing reviews and to ask customers to leave their own reviews. People tend to like receiving attention, and the thought of having their review shared by the page is enough to motivate some people to write one for you. Turn review snippets into images to make them even more shareable.

7. Curb Negative Word-of-Mouth Advertising

Despite your best efforts to provide excellent service and encourage positive reviews, inevitably someone will leave a grumpy review. It's important to respond to these negative reviews in order to show anyone who reads the review that you attempted to reach out and make it right. Always be polite in your response, even if you feel like the reviewer is coming out of left field and spewing lies. Readers will judge your company more by your response than by the actual review.

If you're suddenly getting a lot of negative reviews complaining about the same problem, immediately review your internal processes. Is there a flaw in the product? Do you need to enact better quality control measures? Locate the problem and fix it and then create a public response to curb additional negative reviews.

For example, send an email to your customers (and consider posting on social media and your website as well) that thanks people for bringing the problem to your attention, explains the cause of the problem and outlines the steps you're taking to fix it. Explain how people can return or exchange their product and consider offering a discount code for everyone's trouble. Crucially, ask that people reach out to you directly about this problem instead of leaving reviews. After all, you don't check your reviews pages as often as you answer the phone or respond to emails, so it's a practical suggestion that can also nip the negativity in the bud.