Word of Mouth Marketing: A Strategy Guide for Small Businesses

How do you get people to talk about your business? The short answer is word-of-mouth marketing.

Word-of-mouth marketing increases brand awareness. It teaches people about your brand, generating interest, buzz, and, hopefully, sales. Word-of-mouth marketing plays a critical role in helping customers discover your company and developing a positive reputation for your business.

In this post, I’ll tell you everything you need to know about word-of-mouth marketing, including what it is, how it works, and strategies for promoting your business. I’ll also discuss the benefits of word-of-mouth marketing and how to launch an effective campaign for your company.

What is Word-of-Mouth Marketing?

Word-of-mouth marketing is a brand awareness strategy that encourages customers to talk about your company. Rather than trying to close a deal or make a sale, these campaigns generate interest in your products and services. Customers become more familiar with your business, leading to future sales.

A customer referral program is a great example of a word-of-mouth marketing campaign. It encourages customers to talk about your business and promote it to their peers.

For example. think about Coca-Cola’s “Share a Coke” campaign. The brand encouraged customers to buy soda for their friends, generating additional sales and sharing the brand with people who don’t usually drink Coke.

Source

This campaign was effective because it was easy to understand and personalized the checkout process. Customers could buy a Coke with their friend’s name on it and give it to them as a gift.

Why is word-of-mouth marketing effective?

Word-of-mouth marketing is effective because it builds brand awareness. New customers discover your brand and learn about your products and service, while existing buyers remember your business and think about the positive experiences they had with your company.

These campaigns work because they’re built on customer engagement. It’s not just the brand advertising to buyers. Instead, customers help by talking about the business in a positive way. People trust other customers more than they trust advertisements, making word-of-mouth effective because it’s rooted in customer feedback. The brand isn’t just telling you to buy its products; other people are encouraging you, too.

Social media is a great example. Research shows that 50% of social media users will buy something through user-generated content. User-generated content means the brand isn’t creating the social post. Instead, it’s repurposing its customers’ content to promote its products and services. This strategy is effective because it highlights a customer who supports your brand.

Benefits of Word of Mouth Marketing

Here are a few benefits of word-of-mouth marketing campaigns:

• Brand Awareness: Brand awareness means people are familiar with your company. They know what you sell, recognize your logo, and understand your brand’s value. Word-of-mouth marketing campaigns share this information with your target audience, making your brand more recognizable.
• Customer Engagement: Word-of-mouth campaigns encourage customer engagement. They get people talking about your brand and interacting with your content.
• Brand Reputation: Word-of-mouth marketing can improve your brand’s reputation. It generates positive news about your business, which attracts more customers.
• Customer Referrals: Word-of-mouth referral marketing campaigns usually increase customer referrals. As more people talk about your business, happy customers share their positive stories with others, convincing friends and family to trust your company.
• Customer Acquisition: A successful word-of-mouth marketing campaign will lead to new customers for your business. People will hear about your products and services and want to try them.

How effective is word-of-mouth marketing?

Still not convinced word-of-mouth marketing is effective? Here are some stats that explain why these campaigns are worthwhile for small businesses:

• 91% of customers use local business reviews to make purchases.
• Gen Z and Millenials primarily rely on social media to discover new products.
• 85% of marketers find influencer marketing to be effective.
• Most customers check at least two review sites before making a purchase decision.
• 40% of Gen Z shoppers trust friends and family the most when making buying decisions.

Now that you know why word-of-mouth marketing is effective, let’s discuss some strategies to boost brand awareness for your business.

Word-of-Mouth Marketing Strategies

Here are eight word-of-mouth marketing strategies for small businesses. In the next section, we’ll provide examples of each.

1. Social Media

Social media has become the most effective channel for word-of-mouth marketing because it connects people – not just friends and family, but customers with similar interests. When you follow a brand account, you see what other people think about that brand and how they react to its offers. Whether your customers trust their peers, strangers, or influencers affiliated with your brand, social media is incredibly effective for getting the word out about your business.

2. Customer Reviews & Testimonials

Good reviews build trust with your customers. Most people use at least one review site before buying from a brand, so developing a strong reputation on sites like Google, Yelp, and Facebook is important. It will persuade people to consider your brand and make your business easier to find on these websites.

You should also leverage customer testimonials in your word-of-mouth marketing campaign. These endorsements are more effective than traditional advertisements because real customers support them. People will see real success stories with your brand and want to work with your company.

3. Events

Events will also improve your company’s brand awareness. When you sponsor or host an event, you can plaster your logo throughout the facilities, equipment, broadcast, etc. That shows people that your company produced this event and ties the success of the outing to your business, creating more interest in your brand.

4. News & Media

Getting your business on TV may seem like a pipedream, but it’s actually more realistic than you think. Local news stations are always looking for interesting stories to cover. So, if you have a cool event, offer, or update from your business, consider contacting your local news channel to boost your publicity.

You can also touch base with digital publications like blogs and online newspapers. For example, if you own a restaurant, you might contact a food critic to write about your business. A good review on their blog will improve your reputation and generate more sales for your restaurant.

5. Print Ads

Print ads are a tried-and-true word-of-mouth marketing strategy. They’re subtle, but when positioned correctly, they generate a lot of interest in your business.

Great examples are billboards, bus stops, and park benches. These structures often have print ads that promote local businesses. The more you see them, the more they’re ingrained in your brain.

Here’s an example from Uber, which advertises the app at a local bus stop. People waiting for the bus will see this ad and want to use Uber to save time.

Source

6. Influencer Marketing

Influencer marketing means partnering with a social media influencer to promote your brand. Influencers have many followers online, giving you a bigger audience to advertise to. Plus, these promotions are subtle. Customers see the influencer supporting your brand and want to follow suit. Some might know it’s an ad, but they still trust this person’s recommendations.

7. Business Partnerships

Business partnerships are a great way to teach people about your brand. By partnering up with a local business in your area, you can advertise to a larger audience of customers. People familiar with your brand will learn about your partner and vice versa. You can also motivate people to shop at both companies with a joint offer or discount.

Now, let’s see these in action. The next section will highlight real companies that successfully used these word-of-mouth marketing strategies.

Best Word-of-Mouth Marketing Examples

Here are examples of each marketing strategy listed above. These campaigns generated buzz for these companies and got people talking about these brands.

1. Domino’s – #LetsDoLunch

Domino’s launched the #LetsDoLunch social media campaign, which rewarded people who tweeted about the business. When customers used the hashtag “#LetsDoLunch” Domino’s would give them a discount on its pizza. This got people talking about the business and rewarded them for participating in this word-of-mouth marketing campaign.

2. Southwest HVAC – Customer Testimonial

Southwest HVAC is a small HVAC company located in California. It used customer testimonials to create a simple but effective social media campaign. Rather than advertising services directly, the company collected reviews from happy customers and created graphics to post on Instagram. Since many customers discover local brands through social media, this campaign creates social proof, ultimately leading to sales.

3. Red Bull – X Games

Red Bull has been taking advantage of event marketing for a while, and one of its most popular sponsorships is the X Games. If you watch, you’ll see the Red Bull logo everywhere. It’s on banners, apparel, and even obstacles that athletes do tricks on. Red Bull has done such a great job with its event marketing that the brand is synonymous with extreme sports. When you think about high-octane, adrenaline-inducing sports, Red Bull is one of the first brands that comes to mind.

Source

4. Red Arrow Diner – Guy Fieri & Adam Sandler

Most people may not know about the Red Arrow Diner, but if you live in New Hampshire, you’re familiar with the lore tied to this place. The Red Arrow Diner is a hole-in-the-wall restaurant and diner of choice for celebrities like Adam Sandler and Guy Fieri. Every time a famous person eats at this diner, there’s a news story written about it. This publicity has made The Red Arrow Diner a New Hampshire staple, generating tons of revenue from people who want to eat at the same place that local legends do.

5. Thryv – Small Business Runs Better on Thryv

Here’s a word-of-mouth marketing campaign we created for Thryv. Billboards are hard to miss on your local commute. By advertising products here, you see them whenever you head to work. Thryv sells software that helps small businesses grow, and this billboard gets you thinking about how our tools will solve problems at work. It’s perfect for a morning commute – especially when thinking about everything you need to do that day.

6. 7-Eleven – Charli D’Amelio

Businesses use influencer marketing in a variety of ways. In this case, 7-Eleven and Be Happy Snacks used Charli D’Amelio’s social following to promote a new line of products. While Charli is promoting her own brand (Be Happy Snacks), she’s also endorsing 7-Eleven. She’s showing people where to buy her snacks, creating more sales for both companies.

7. Venmo – Refer a Friend

I get this email from Venmo every week with this offer. If I get a friend to sign up, the company will pay me to refer a new customer. It’s simple but effective, and it motivates me to endorse Venmo.

8. Coca-Cola and McDonald’s – Olympics Campaign

Coca-Cola and McDonald’s have been partners since the 1950s. Coke even sells a special version of its product to McDonald’s that it doesn’t offer to any other fast food chains.

These brands have launched plenty of successful word-of-mouth marketing campaigns over the years. One notable promotion was their Olympics marketing campaign, which rewarded customers for adding a Coke to their McDonald’s order. If they did, customers received a free McNuggets or McFlurry and the chance to win “Olympic-themed prizes.” It also featured plenty of Olympic athletes drinking Coke, which made the brand more relatable and relevant to its audience.

Before we wrap up, let’s show you how to create an effective word-of-mouth marketing campaign for small businesses.

How to Increase Word-of-Mouth Marketing

Here are six steps to increase word-of-mouth marketing at your business.

Research your customers.

Good marketing campaigns are rooted in great customer research. The more you know about your target audience, the easier it is to connect with them.

Use tools like your CRM, social media accounts, and online reviews to research your customers. Look at how they consume information and the digital platforms where they’re most active. That way, you can position your marketing campaigns to make them convenient, timely, and easy to interact with.

Focus on a unique position, perk, or offer.

A good word-of-mouth marketing campaign doesn’t focus on selling; it prioritizes education. Rather than boasting about your products and services, consider what makes your brand unique and different from competitors. Then, promote that to your audience so they can easily remember your brand.

That will prime them for your next campaign, where you explain why they should use your products or services. Since they’re already familiar with your brand, you’ll have a higher chance of selling them something later.

Take advantage of different marketing channels.

One way to grow brand awareness is to explore different marketing channels, such as social media, email, and online advertisements. If you don’t use a mix, you might miss out on customers who only use one channel to discover new businesses.

For example, if you’re trying to reach a younger audience, you might want to create a TikTok account because most TikTok users are between 13 and 34 years old. Advertising on this platform increases your chances of connecting with a younger demographic than using another site, like Facebook.

Find the right brands and influencers to partner with.

Finding the biggest brand in your area to partner with might be tempting. However, the best business partnerships are between brands that share similar audiences but sell different products.

Think about our Coca-Cola example with McDonald’s. This partnership works because both brands advertise to the same consumers, but one company sells soda, and the other sells food. They share the same goals and customers but sell different products.

The same goes for influencers. Just because someone has a huge following doesn’t mean their audience will buy from your business. Partner with people who appeal to your audience but sell different products.

Tip: I wrote this blog post that explains how to create a referral program for small businesses. I would recommend checking it out and watching the video below for more tips:

Measure your performance.

If you want to improve your campaigns, you have to measure their success. Not only will it show if they worked, but it will help you create meaningful promotions for your business. Set SMART goals for each of your efforts and check in on them periodically to see how your campaign is doing. Then, make adjustments over time so your marketing becomes more effective.

For example, if you post to social media, set a goal for how many followers you want to gain or how many comments you want on each post. It will help you write engaging social media captions and clearly explain what you want your audience to do. Over time, you can test different posts and replicate the ones that work best.

Small Business Word-of-Mouth Marketing

Word-of-mouth marketing grows your customer base and increases loyalty to your brand. The more familiar customers are with your products and services, the more likely they’ll buy from your business. Use these tips to craft an effective word-of-mouth marketing campaign and fine-tune your efforts over time to maximize the visibility of your small business.