Word-Of-Mouth Marketing - Shortcut to a billion $$ in revenue

August 19, 2022
Today, companies throw eye-watering amounts of money at marketing campaigns to acquire new customers. But they miss one important fact - 92% of customers trust word-of-mouth recommendations over any other type of marketing.

I am fascinated by learning from the most successful digital marketing methods and applying my lessons to the retail marketing strategy of traditional brick-and-mortar stores. Very few practitioners of digital marketing are better known than Neil Patel

The other day, as I was reading one of his articles “7 Marketing Lessons Learned from Billion Dollar Companies You’ve Never Heard Of”. I am aware that digital marketers “sometimes” exaggerate the titles of their articles to attract more clicks, but in this case, I was surprised to read the following:

“When I ask them (CMO of Billion dollar companies) what’s their number one marketing channel, do you know what they all tell me?

It’s word-of-mouth marketing or variations of it. In essence, other people telling others about your company, your product, your service… it is how you win.”

I always felt that Word-Of-Mouth marketing is an incredibly powerful method of generating customer demand for products and services. However, I thought that it was mostly appreciated by small businesses. Turns out I was wrong and started to read more to learn some multi-billion dollars wisdom”

“So then I went on to ask these people, how do you generate more word-of-mouth marketing? When I took all of their responses and aggregated the data, here is what people said were the top 3 ways of getting more word of mouth:
  1. Be in business for a long time – no matter what you are selling and no matter how great it is, word-of-mouth marketing doesn’t happen overnight. People need to be patient and give it 10 plus years for it to fully kick in.
  2. Have an amazing product or service – if your product is great you will have more word-of-mouth marketing. And if it is terrible you will either have little to no word-of-mouth marketing or even worse, you will have it but it will be people talking negatively about you.
  3. Build a big organization – having thousands of people work for you is marketing. Whether it is people listing your company on their LinkedIn or your employees telling other people about your company, having a big labor force working for you is a great way to spread your brand out to the masses.”

Unfortunately only the second of the 3 points above, apply to a small business or a startup - “Have an amazing product or service”. However, assuming you got “an amazing product” does not mean your potential customers are aware of this fact and therefore are not inclined to share their opinion about it with anybody else. This is yet another chicken/egg situation often facing entrepreneurs. 

Now, I am no Neil Patel, but I may have an idea of how to resolve this conundrum. The best way to help people create their opinion about your product is to let them experience it. If they do and they like it, not only will they buy your product, they will talk about it to people they know. People love to talk about their discoveries. Voila, this is a shortcut to Word-Of-Mouth marketing riches. The more customers are exposed to your product - sample or taste it - the more sales and WOM marketing impact you get. Wash, rinse, repeat!

I wish I had discovered that, but alas there are people smarter than I, like Daniel Lubetzky, founder of KIND Snacks, who used this method to grow his fledgling 2004 startup into a multi-billion dollar empire. You can find more about KIND here

The point is you don’t have “to be in a business a long time” or “build big organization” to start getting the benefits of Word-of-Mouth Marketing. These conditions are required if paid influencer marketing method is applied. While influencer marketing can be effective, it is by far less effective than authentic word-of-mouth marketing, and a lot more expensive to practice. 

Many smart startup founders often conduct store samplings of their products to create a wonderful customer experience in a retail environment - because that is where the customers are. The founders make terrific brand ambassadors because they understand their products and genuinely want to learn how the customers experience them. They sell a lot of products during these events and create even more word-of-mouth. The only problem is that they have to run the company instead of running the in-store sampling events and demos of products. In other words, it is not a scalable business practice. If only the founders could clone themselves!

The solution to the Word-Of-Mouth Marketing challenge for small businesses wanting to scale is the same as most other business challenges - you need to learn to delegate:

  1. Document the process that works. If you are already doing it successfully, describe step by step what you do to set up the store sampling event, where (what locations) did you experience the best traffic and consumer engagement, how did you arrange your sampling table or both, etc.
  2. Hire the best person, you can afford, and train this person to be better at running store sampling than you are. More enthusiastic, more product knowledgable, and more interested in the customer experience of your product.
  3. Give this person the best tools you can afford to reduce administrative and logistical nightmares setting up the events to maximize customer-facing time. The good news is that you can get one of such tools for free. It is very hard to find very good brand ambassadors, but it is even harder to retain them without running a “tight ship”. 
  4. Let this person (add persons) schedule and run as many store sampling events at the carefully selected locations as possible to create a multitude of fantastic customer experiences to stimulate ever multiplying echo of Word-of-mouth marketing. 

In conclusion

Positive product Customer Experience begets positive word of mouth. Outstanding customer experience produces multitudes of highly motivational word of mouth that sells in volumes.

The brand awareness and revenue impact of Word-of-mouth Marketing exceeds the effectiveness and efficiency of any other methods of retail activation by a large margin.