The Secret Sauce: How Word-of-Mouth Can Skyrocket Your Small Business
Alfred Sofela
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Key Takeaways
If I told you there was a nearly free marketing strategy that could transform your unknown small business into an overnight success, would you be interested? Of course, you would!
Well, that secret sauce is word-of-mouth marketing.
Word-of-mouth marketing is when happy customers organically rave about your business to friends, family members, and peers. It spreads your brand faster than any ad campaign and turns customers into unwitting marketers who do the selling for you.
As famed entrepreneur Richard Branson puts it, “Word-of-mouth is a powerful form of marketing because our world comes down to people talking to each other about their experiences.”
And the data backs this up...
A Nielsen study revealed word-of-mouth recommendations are the most trusted form of advertising globally. 88% of consumers said that they trusted recommendations from people they knew more than any other source.
Meanwhile, in another report, McKinsey & Company indicated that word-of-mouth is the primary factor behind 20 to 50 percent of all purchasing decisions.
So, if you're a budding entrepreneur, word-of-mouth marketing needs to be central to your growth strategy. Leverage it, and your small business can gain an unbeatable competitive advantage.
Let’s explore exactly why word-of-mouth gives small businesses an unfair edge and how implementing a word-of-mouth strategy will rocket your success.
The Power Behind Word-of-Mouth
Word-of-mouth marketing leverages the power of person-to-person sharing. Here’s why it’s especially beneficial for small businesses on a budget:
It’s Free Advertising
Your best customers voluntarily market your brand to their networks for you. This eliminates costly advertising fees, allowing you to reinvest revenue into perfecting your offering.
It Builds Trust and Credibility
First-hand recommendations from real-life friends are more authentic and reliable than promotional messages from companies. The recommendations are the product of built-up goodwill.
It Reaches New Audiences
Satisfied customers tap into their networks, exposing your brand to fresh, relevant audiences you may not have reached before.
It Drives Sales
Word-of-mouth is directly linked to purchase decisions. Recommendations from friends strongly impact what customers buy.
It Improves Customer Retention
It’s 5–25 times cheaper to keep existing happy customers than to continually attract new ones. Word-of-mouth increases engagement and retention.
It Scales Growth
Once word spreads, you leverage hundreds of unpaid marketers. This kicks growth into hyperdrive far faster than you could alone.
It Saves Resources
Minimize the amount of money spent on advertising as your message spreads organically. Resources are freed up to refine your offering.
Getting these powerful growth benefits costs you next to nothing. You simply incentivize customers to share voluntarily. But doing this effectively hinges on truly understanding the word-of-mouth process.
Mastering The Organic Word-of-Mouth Funnel
Turning customers into brand advocates who actively refer others follows a distinct 3-step funnel. Successfully guiding customers through this funnel is the key to word-of-mouth paradise.
Here is the process that transforms customers into voluntary marketers:
Step 1: Delight with Value
No word-of-mouth happens without first delighting customers with standout value. This value must be experienced as customers interact with your brand.
Step 2: Incentivize Sharing
Next, incentivize happy customers to share their positive experiences through reviews, referrals, or social channels.
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Step 3: Encourage Advocacy
Finally, encourage transformed loyal advocates to intentionally recommend you within their trusted networks.
Let’s explore how small businesses can optimize each phase.
Step 1: Delight Customers with Value
The spark for almost all word-of-mouth recommendations is an exceptionally positive customer experience.
Your first step is to identify exactly what creates delight for your customers and double down on it.
Nail the core basics like product quality, good service, and fair prices. But don’t stop there. Discover what else unexpectedly delights customers and sets you apart.
Some ideas:
When you delight customers, they can’t help but share the standout experience with their connections.
One example is the Sugar Chalet Bakery. Their freshly baked, custom-designed specialty cakes surprised and delighted locals used to basic grocery store varieties. The delightful creations and stellar service sparked word-of-mouth, which saw them quickly become the top bakery in town.
So, shine a spotlight on points of delight, double down on them in your offering, and prepare customers for the next step...
Step 2: Incentivize Sharing
Delighting customers is the spark, but you also need to actively fan the flames for organic word-of-mouth to spread.
The key is incentivizing happy customers to share online reviews, participate in referral programs that refer friends for perks, and rave about your business socially to their trusted networks.
Here are some proven incentives to fuel organic shares:
The easier you make it to share, the more referrals and reviews you’ll generate.
For example, the Lifeboys Barber Shop set up an SMS-based system where satisfied customers could instantly text friends offers for discounted haircuts. This brought in numerous referrals.
Once you’ve designed smart incentives that pop word-of-mouth sharing into overdrive, it’s time for the final step...
Step 3: Encourage Intentional Advocacy
The end goal is to transform happy customers into intentional advocates who voluntarily sell your brand.
First, identify potential top-tier brand advocates using referral rates, review numbers, and social engagement.
Next, further incentivize these VIP advocates to intentionally recommend you within their inner circles when relevant.
Some incentives for active advocacy:
You essentially want to nurture a tribe of micro-influencers who organically market your brand to their networks at scale.
A stellar example is the outdoor brand Patagonia. They nurtured an almost cult-like following by actively supporting core customers’ lifestyles and beliefs around environmental activism. These brand ambassadors became their marketing army, fueling rapid expansion.
Keep incentivizing and appreciating your top fans, and they’ll keep voluntarily singing your praise, acting as unpaid growth hackers. This is a marketing utopia!
Skyrocket Success with Word-of-Mouth
Igniting an ongoing chain reaction of raving fans organically promoting your brand is every small business owner’s dream.
Word-of-mouth marketing makes this attainable on even the leanest budget. Simply focus on delighting customers, make sharing fun and rewarding, and nurture engaged brand advocates.
Then watch as your small business explodes with growth through recommendations spreading like wildfire.
So, are you ready to take the first step?
If this article was helpful to you, you may also enjoy FOMO Marketing: A Powerful Tool for Sales
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1 年Alfred, thanks for sharing!