How to use word-of-mouth advertising and referral marketing

Trust is important in word-of-mouth advertising.

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Published on: July 27, 2022
Written by: Matthew Anderson

Trust in traditional sources of information continues to wane. In a March 2022 report, the Institute for Public Relations reported that 40% of Americans say they avoid the news because of the amount of disinformation present — a huge jump from 31% the year before.

Most Americans view the news media, politicians (and, yes, even marketers) as biased. More than half of respondents to the survey stated that marketers are doing “not too well” or “not at all well” in combatting disinformation that appears in the media. When it comes to quashing disinformation, Americans trust marketers and advertisers about the same as they trust political activist groups.

Where are people going for their news?

Family and friends. For the third year in a row, the annual study reported that Americans view their family members and friends as the most trusted sources of information and the least likely to spread misleading or biased info.

What does that mean for marketers?

When evaluating your marketing budget, consider increasing the amount you spend on peer-to-peer marketing.

If you want to get important information in front of the public, odds are you’re going to have to let others tell the story. Advice people get from their friends and family is dramatically more important right now than messages they get from advertisers and marketers.

Five things you can do to maximize word-of-mouth and referral marketing:

  1. Ask customers to leave you an online review. More people are using reviews to guide their purchase decisions than ever before, and research shows that people don’t trust businesses with an average below four stars. Craft a short script to send to your best customers or clients, and be sure to include a link to your Google reviews or other online source, such as Yelp or TripAdvisor. For quick, lower cost purchases — a meal, oil change, coffee shop visit or tourist activity — it’s typically best to ask right away. For larger purchases that may include complicated transactions and longer periods of time with the customer — buying a home or car or completing significant home remodeling — we recommend waiting a month or two, when the buyer has had time to enjoy the purchase. Then, use that time to check back with the client to see how they are enjoying their new “XYZ” and ask for a review at that time. Pro tip: Since so many reviews are left using mobile devices, you might consider asking via text for less formal purchases.
  2. Offer referral bonuses. Many companies these days are offering discounts to customers who refer others. Dropbox, in fact, grew a whopping 3900% via its program that gave users extra space for referring other users. Pro tip: This also works well for hiring. Why not set up a referral program that gives a nice bonus to staff members who bring new workers on board?
  3. Give customers something for free. Getting customers to try your product is a great way to boost usage and, potentially, word-of-mouth advertising. For example: I recently visited a bookstore that is giving $5 credit for kids who read at least 300 minutes in a month.
  4. Hold community events. Fairhaven Runners holds a ton of community events that bring in customers and get people talking about the business. SPARK Museum has a book club that gets people into the museum and discussing fascinating topics online. Since Whatcom County is such a community-oriented place, many businesses throughout the region do something similar.
  5. Be great at what you do. The greatest thing you can do to get people to talk about your business is to provide excellent services and products. When your business excels, people want to recommend it to their friends. Pro tip: In addition to being great, be nice. It’s good for business.

For help implementing any of these plans, please give Bellingham PR & Communications a call. Our marketing team has extensive experience carrying out each of these plans for small business in Whatcom County.

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