How Important Is Word-of-Mouth Marketing And How Can You Boost It With a Loyalty Program?

Word-of-mouth marketing is a cost-effective way to spread the word about your company. For starters, check out these must-have strategies.

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Can you think of the last time you had a positive experience with a brand and immediately had to share it with your friends? Maybe it was a new restaurant that opened or an electronic gizmo you purchased. The excitement of wanting to tell your friends about it is what drives word-of-mouth marketing.

Companies earn their customers’ loyalty because of how they make them feel. Happy, engaged shoppers are the most effective tool for marketing your business. Nowadays, customers are influenced by a variety of sources: they check out their friend’s social media posts, online reviews and eventually they buy from companies they know or have heard of, but most importantly from companies they trust. 

Loyalty programs are a great way to leverage word-of-mouth marketing. And when customers are rewarded for spreading the word about your product or service they will be even more enthusiastic about doing so.

What Is Word-of-Mouth Marketing?

Word-of-mouth marketing is the organic spread of information about your brand, products or services. It happens when a customer’s interest in your products or services are reflected in their everyday conversations. Word-of-mouth is a free form of advertisement triggered by customer experiences, usually by something beyond what’s expected.

By exceeding customers’ expectations or providing insider information about your product, you are giving them a reason to talk. Exemplary customer service makes customers feel the company is listening to them, which helps form a more emotional bond. The value of a single word-of-mouth impression is anywhere from 5 to 100+ times more valuable than a paid media impression.

Go overboard with the experience you provide your customers.
Go overboard with the experience you provide your customers. It will surely get them talking.

How Does Word-of-Mouth Marketing Help You?

Many companies consider word-of-mouth marketing the most valuable form of marketing because it enables you to spread good reviews about your product or service to a large audience. Word-of-mouth helps you build trust and is a cost-effective means to reach customers. Also, it’s one of the most effective forms of advertisement for boosting brand recognition, loyalty and sales. 

71% of people are more likely to purchase based on social media referrals and believe recommendations from friends and family. This is especially true for millennials who are influenced by word-of-mouth marketing 115% more than by traditional advertising. This means when someone sees a friend or family member raving about a particular brand, they’re much more likely to buy. From this follows that your biggest marketing asset is your existing customer base. 

With every share, repost, or retweet, word-of-mouth marketing carries the potential for exponential growth. You can grow sales without the ad spend. What is more, people are 5X more likely to recommend your product to their friends and family when they have a good customer experience, which is where a loyalty program helps greatly.

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Consider rewarding your customers for talking positively about your brand. Our worksheet will help you think through other key characteristics for your future loyalty program as well.

8 Must-Have Word-of-Mouth Marketing Strategies

Loyal customers lead to positive word-of-mouth. Create experiences that get people talking and you’ll inherently spark word-of-mouth marketing. Fortunately, with social media around there are plenty of platforms at your disposal. People love to share their experiences, whether it’s on Snapchat, Instagram Stories, Twitter, Facebook, or any of the other popular social networks. So what actions can businesses take to motivate others to spontaneously talk about their products, services, or brand? Let’s see a few strategies:

1. Encourage User-Generated Content

Encourage your customers to create and share content about your products. It’s not only honest and builds trust, but also provides marketers extra collateral to work with. Incentivize customers to share pictures and videos on social media. User-generated content can be a good indicator of the quality of your service, can increase sales effectiveness, and can also create a sense of community. 

A great example of UGC is Sephora’s Beauty Insider Community with more than 5 million members. Customers can create their profile, upload photos and share beauty advice, inspiration, news, and recommendations with real people in real time.

Members of the Beauty Insider Community can chat with each other, join challenges, and share experiences.
The Beauty Insider Community members can chat with each other, join challenges, and share experiences about the products they are using.

2. Share Customer Reviews

Customer reviews are word-of-mouth marketing at its purest. Encourage your happy customers to leave reviews and product ratings of your business and products on different platforms by rewarding them within your loyalty program. Customers tend to trust testimonials and online reviews as much as personal recommendations. It makes them feel more comfortable by confirming the quality and value of your claims.

One of the most popular review sites is Yelp, which publishes crowd-sourced reviews about businesses. As of December 31, 2020, more than 200 million reviews were available on its business listing pages. They motivate reviewers by distributing badges and honors for actions and milestones, like being the first to review a new location.

One of the most popular review sites is Yelp, which publishes crowd-sourced reviews about business.
Each year the Yelp community members are invited or self-nominated to the “Yelp Elite Squad”, where they can be accepted based on an evaluation of the quality and frequency of their reviews.

3. Offer a Unique, Shareworthy Experience

Give customers a reason to share their experience with your brand by offering something memorable, which they cannot get anywhere else. They will want to tell everyone about it, even if you don’t ask them to. 

Simply Be, the go-to digital destination for fashionable size 12-32 women, created a loyalty program that rewards customers for who they are. As the company wishes to highlight body positivity, they encourage members to upload pictures of themselves wearing their favorite clothes.

Simply Be encourages their members to share their styles on Instagram.
Simply Be encourages their members to share their styles on Instagram with the hashtag #wearecurves.

4. Engage With Your Audience

Put your customers first, think of what would appeal most to them. An interactive contest? A behind-the-scenes video? Give them what they want in order to generate word-of-mouth. Make the effort to understand what they like about your business. How much meaningful exposure your company gets depends heavily on how well you can connect with your customers.

The convenience store 7Eleven encourages customers to post photos on social media using certain hashtags, like #7ElevenDay and #slurplife. In return, they receive a small slurpee cup on the company’s birthday, July 11.

7Eleven giving away free Slurpees on July 11.
7Eleven has kept up with the tradition of giving away free slurpees every July for nearly 20 years.

5. Remember, Friends Always Tell the Truth

Most people trust their friends’ and family’s opinion more than any kind of paid advertisement. Offer exciting rewards in your referral program to encourage customers to recommend your brand to family and friends. This not only significantly reduces the cost of acquiring new customers, but also increases customer retention.

Love, Bonito, the women’s fashion brand, has a hybrid loyalty program merging earn & burn and tiered elements. Members of the program not only receive points for spending money, but also for friend referrals, which earns them 300 points.

Love, Bonito’s customers receive 300 points for referring a friend.
Love, Bonito first launched their LBCommunity+ in Singapore, but due to their regional success, they also later rolled the program out to an international audience.

6. Find Trustworthy Ambassadors

Encourage influencers to promote your product and raise brand awareness by offering various incentives. Give them extra discounts or sponsor them to attend an event. You can even create a special tier in your loyalty program exclusively for brand ambassadors. This makes ambassadors feel extra special and strengthens their emotional connection to your company.

Diamanti Per Tutti generates buzz and word-of-mouth around its brand by creating a special group just for influencers with exclusive perks and benefits. They give advocates and top spenders special treatment. A select few are even invited to a hidden VIP tier, which is aptly named ‘Ambassador’.

Diamanti Per Tutti offers perks like VIP services, free jewellery, and product rentals for special events.
The Ambassador tier isn’t displayed publicly, and Diamanti Per Tutti actively seeks out influencers and advocates. Some of the perks associated with this tier include VIP services, free jewellery, discounts, and the opportunity to rent products for special brand events.

7. Tap Into Emotion

If customers feel strongly about your brand, they are less likely to turn to the competition. Create experiences that result in positive emotions, so customers will instinctively want to share those experiences with others.

Coca-Cola’s “Share a Coke With Friends” is a great example of omnichannel word-of-mouth marketing. The company asked its customers to participate by sharing a personalized soda bottle with friends and on social media. The campaign’s purpose was to create a more personal relationship with customers and inspire them to share moments of happiness.

Coca-Cola’s Share a Coke With Friends campaign
The campaign was so well-received that other countries around the world adopted it with their own unique twists. For example, in the U.K., 75 holiday destinations were printed on the labels as opposed to names.

8. Stay True to Your Brand

Customers trust businesses that are consistent and transparent in their promotions. What interests or characteristics do your customers share? You can build a community by encouraging people to bond over similar skills, priorities, or aspirations.

GoPro is one of the best examples of a brand using word-of-mouth marketing to build customer loyalty. People love sharing their greatest achievements and GoPro allows them to share their wildest life experiences with their friends and family.

GoPro cameras are also great talk triggers, meaning they drive people to raise awareness of the brand via word-of-mouth.

Making Advocacy Worthwhile

So how can you encourage customers to do the work for you? Encourage word-of-mouth marketing by incentivizing customer actions with a loyalty program:

  • Offer points for writing reviews, but make sure customers can only write about a product if they have purchased it
  • Encourage customers to participate in social media contests and offer prizes to the winners
  • Spice up your friend referral program with exciting rewards, such as free gifts or extra discounts
  • Create VIP tiers for influencers/brand advocates with special perks
  • Incentivize social media activity by offering benefits when customers follow you or share content related to your brand
Setting up a hashtag contest on Instagram.
An Instagram contest can be a great way to drive user-generated content, as well as boost traffic to your website and product pages while building credibility at the same time.

Unleash the Power of Word-of Mouth Marketing

Word-of-mouth marketing is less about coming up with super witty viral content. It is more about offering astonishing value that people can’t resist sharing with others. It pays to be kind and attentive to your customers. Word gets out when you deliver stellar service and show appreciation. If you keep meeting expectations, customers turn into long-time ambassadors for your brand.

The viral potential and cost efficiency of word-of-mouth marketing can be matched by very few other marketing strategies. Consider incorporating word-of-mouth the next time you plan a product launch or email campaign. Give the above strategies a try to spark the flame in your next campaign.

If you need assistance in deciding which loyalty program is the best for your company, our experts are more than happy to discuss your options with you. Just book a demo or include us in your RFP.  

Until then, read our definitive guide to learn more about the creation of successful loyalty programs and how they are implemented.

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Barbara Kekes-Szabo

Barbara Kekes-Szabo

Barbara is a Content Marketing Manager at Antavo. She is a writing expert with several years of experience in marketing and also in the information technology industry. In her free time she likes traveling the world, reading crime stories, and doing crossword puzzles.

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