Word of Mouth Marketing: Strategies & Examples

What Is Word of Mouth Marketing?

Word-of-mouth marketing (or WOM marketing) is when consumers' interest in a company's product or service is reflected in their daily dialogues. Essentially, it is free advertising triggered by customer experiences—and usually, something that goes beyond what they expected. Word-of-mouth marketing can be encouraged through different publicity activities by companies or by having opportunities to encourage consumer-to-consumer and consumer-to-marketer communications. Also referred to as "word-of-mouth advertising," WOM marketing includes buzz, viral, blog, emotional, and social media marketing (Rakić and Rakić, 2018).

Word-of-mouth marketing differs from natural word-of-mouth references to a company's products and services in how it may come as the result of a promotion, encouragement, or other influence by a company, otherwise known as "seeding." When a diner has a wonderful time at a restaurant because their expectations were exceeded and later tells tweets about it, or when someone had a great experience using a product in a new way and tells everyone they know about it, those are examples of word-of-mouth marketing (Hu et al. 2019).

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Why Is Word of Mouth Marketing Important?

WOM recommendations are a crucial marketing tool for any brand. This is mainly because since they come from sources familiar to us already, i.e. friends and family, and due to the 'buzz' user-generated content can induce, they're more trustworthy and valuable. Consumers trust their friends. This is why word-of-mouth marketing is the most valuable marketing source (Husniah et al., 2019).

According to a Nielsen study, 92% of consumers believe suggestions from friends and family more than they do advertising - this stat alone solidified the word-of-mouth use case. WOM doesn’t stop after just one interaction (Hu et al., 2019). One person will tell another, and that person will find someone else, and then that person will continue the chain and spread the word further, making it a great vehicle for exposure and distribution - if used well. Of course, the same is true in reverse - negative news can spread quickly. Still, the essential benefit of WOM in the connected era is a personal endorsement, which is more readily available and seen as significantly more valuable to modern consumers (Li et al. 2018).

The main benefits of using word of mouth as an integral component of your marketing

Low Cost Because you're not paying for true word of mouth, this marketing strategy contributes to lower costs, as others are doing most of the work for you. It helps influence sales with little to no advertising spend.
Builds Trust, Brand Reputation & Loyalty Developing trust is not only one of the first steps in a relationship marketing strategy but also one of the most difficult. Since word-of-mouth recommendations are from a peer you trust, a familiar face, or online reviews, they are inherently trustworthy.
Creates Long-term Value Gaining consistent, positive buzz around your whole product through word-of-mouth marketing will help you maintain repeat customers and make it easier to approach influencers for brand advocacy partnerships.

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What Type of Marketing Is Word of Mouth?

Word-of-mouth marketing is when a consumer's interest in a company's product or service is reflected in their daily dialogues. Essentially, it is free advertising triggered by customer experiences—and usually, something that goes beyond what they expected. Unlike naturally occurring word-of-mouth referrals, word-of-mouth marketing is an active strategy. With word-of-mouth marketing, the focus switches from collecting likes and followers to actively seeking a connection with customers (Li et al. 2018).

Word of mouth marketing is one of the most effective forms of marketing that involves giving customers reasons to share good opinions about your products with their friends and family. It helps you influence the customer’s purchase decisions, build trust, and boost brand awareness (Chu and Kim, 2018). We are also providing contribution margin analysis services by highly educated experts.

What Are The Examples of Word of Mouth Marketing?

Examples of a few companies who use word-of-mouth marketing strategies are discussed below:

It’s no secret that Coca-Cola is one of the world’s most popular drinks. Over the years, it has run multiple campaigns, which have led to positive word-of-mouth promotion for the brand and increased the consumption of Coke worldwide. Its “Share a Coke” campaign was launched in 2014 to get consumers to view Coke in a way that boosts its consumption, i.e., by getting people to share it with their friends and family. Its social media campaign asked customers to find bottles with common names (and unusual spellings of common names!) and share them online using the hashtag #ShareaCoke.
Dropbox is an online storage company that has successfully used word of mouth to attract many new customers. It offered free storage space in the early days with a bonus of free space for referrals that drew a lot of attention. It offered 500 MB of extra storage space to new users and those referred by them. This campaign rapidly increased Dropbox’s revenue (Zhang et al., 2019).
Casper is an online company that produces mattresses, bedding, and other sleep-related products. Each of their mattresses offers a trial period of 100 days from purchase. Consumers can then decide to keep the mattress or return it. This customer-focused approach has clicked with consumers who prefer testing a product’s comfort and durability. Casper also ran aggressive social media campaigns sharing customer reviews, helping it acquire more than one million customers in eight countries (Yaman, 2018).

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What Are The Advantages of Word of Mouth Marketing?

Eighty-eight per cent of people around the world said they trust recommendations from friends and family (earned media) above all other forms of advertising. Consumers are more emotionally bonded to a company when they feel they are listened to by the company. That is why many companies will have sales representatives discuss their products and services with consumers personally or through a feedback phone line. This kind of interaction and promotional events can stimulate conversations about a company's product (Chu and Kim, 2018).

There is a significant temptation to fabricate word-of-mouth marketing. Accordingly, the Word-of-Mouth Marketing Association (WOMMA) crafted a code of ethics checklist for the industry, advising that the best word-of-mouth marketing strategies are "credible, social, repeatable, measurable, and respectful," and there is no excuse for dishonesty (Husniah et al. 2019).