How Word of Mouth Marketing Works

Sep 10, 2021 | Referral Marketing

What is Word of Mouth Marketing?

Word of mouth happens when your company’s products or services naturally enter a customer’s daily dialogue with friends, family, etc. For example, if a customer has a great meal and customer service experience at your restaurant, they might tell everyone they know about it, provide a glowing online review, or tag your restaurant in an Instagram story. Essentially, customers’ experiences trigger free advertising for your company.

Word of mouth marketing encourages this process by actively influencing existing and potential clients to talk about your brand, company, or services. Word of mouth marketing includes a combination of tactics like social media, incentives, buzz, and emotional marketing. Word of mouth promotions can be generated organically, like a customer tweeting about how they got the best cup of coffee from a local coffee shop. Or, it can be encouraged through publicity activities, like a new product launch or offering free online resources.

Why is Word of Mouth Important?

In the digital age, it can be difficult to know which companies to trust. Word of mouth acts differently than standard marketing campaigns because it operates on trust. The more a person trusts your business, the more likely they are to use your products or services. With a targeted word of mouth marketing strategy, you can increase your ROI, brand loyalty, and lifetime customer value.

Benefits of Word of Mouth Marketing

If harnessed correctly, word of mouth marketing can be one of the most powerful tools in your company’s toolbox. Below, we’ve listed the top three benefits of using word of mouth to grow your brand and ROI.

1. ROI is Trackable and Grows

ROI can be difficult to track across your marketing efforts. Often, traditional marketing efforts like mailers and coupons don’t accurately reflect your ROI. This makes it hard for you to make informed decisions for your future marketing efforts. With word of mouth marketing software, ROI is far easier to track. Word of mouth marketing software shows who referred your business, how much revenue you generated from a referral, and which incentives you send out for referrals. Also, word of mouth marketing often provides additional sales, even if you haven’t spent more funds on advertising. At Check This Out, we found word of mouth advertising generates an ROI of up to 1237%.

2. Builds Trust

A single satisfied customer can change the tides for your business. A word of mouth promotion typically comes from someone a potential customer knows, so it carries more weight to them than a review sponsored by a company. In fact, Nielsen reports that 92% of people around the world trust recommendations from friends and family above other forms of advertising. This increase in trust leads to an increase in customers loyal to your business.

3. Focused on Connection

One of the problems with modern marketing is the focus on collecting fans instead of connecting with them. Word of mouth works differently. The central focus of word of mouth advertising is building the emotional bond between consumers and a company. Customers value real interactions where they feel seen and heard. When this happens in an interaction with your company, a customer is more likely to give a positive review of your company to a friend or loved one. You can build your customer-company interaction by having a responsive social media presence, sales representatives available to chat with customers about products, and engaging customers through promotional events.

Are There Any Drawbacks to Word of Mouth Marketing?

Generally, the benefits of word of mouth marketing surpass any drawbacks. However, if you decide to implement a strategy-based word of mouth advertising plan, you need to be aware of the impact of word of mouth.

Sometimes, positive recommendations can give consumers expectations that are difficult to meet. For example, your friend may recommend a printing service to you for your new business cards. But if the printing service’s final product doesn’t live up to your expectations, you may be disappointed. You can combat the increase in unrealistic expectations by being honest with customers about your services and maintaining top-notch quality and care.

Word of mouth marketing can be a loose cannon with how much control you have in how often or when it happens. Customers have free will over whether or not they tell their loved ones about their positive experiences with your company. That’s why it’s important to leave a positive, lasting impression on customers; it increases the likelihood of them talking about your company with others.

Check This Out: We Harness Word of Mouth Marketing for Your Success

If you want to increase your company’s reach through word of mouth marketing, talk to the experts at Check This Out today. At Check This Out, we create a custom word of mouth marketing strategy to fit the needs of your restaurant or small business. Since 80% of your business is generated by customers telling others about your business, we can show you why word of mouth is the best advertising option for your business’ growth. We streamline the word of mouth process through text messaging communication, discount offers, and tracking software to grow your customer base. To learn more about how Check This Out can use the power of word of mouth to increase your ROI, chat with us today.

Learn More

Search Our Blog

Get a Demo

Let's increase your word of mouth marketing together!