Building trust and loyalty with word-of-mouth marketing

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As a small business owner, you’re faced with a critical decision: Which marketing channels should you use togrow your business? From social media ads to email newsletters, many marketing channels have costs attached. But there’s one age-old marketing technique that you can implement for free:word-of-mouth marketing.

Word-of-mouth marketingleverages your existing customer base and spurs organic growth for your brand. Organic growth is the act of acquiring customers naturally—without spending money on advertising. It’s an ideal choice when you want to expand yourbrand awarenesson a limited budget.

Learn howword-of-mouth marketingcan fit into your overall marketing strategy and provide an affordable, organic growth engine for yoursmall business.

Word-of-mouth marketing—also known asWOMM,WOM marketing, orword-of-mouth advertising—is when a business makes a conscious effort to encourage people to promote the company through organic discussion.

First, a business creates something that’s interesting and worth talking about—maybe it’s a funny social media campaign or an enticingreferral program.From there, the company encourages its existing customers or the general public to spread this information to others.

Before the internet,word-of-mouth marketingconsisted of in-person conversations where customers recommended businesses and brands to one another. Today, businesses have a wealth of digital tools at their disposal, such associal networksandonline reviewsites, that can fosterorganic word-of-mouthgrowth.

Word-of-mouth marketingis an affordable (and often free) way to promote and grow yoursmall business. It also directly impacts the health of your company. When customers have good experiences and share those moments, it builds brand trust andbrand loyalty. Research shows that94% of consumersare more likely to trust and frequent businesses that have positive reviews from other customers.

Word-of-mouthis aform of marketingthat lets you stretch your budget. In fact, you don’t even need to spend a dollar.

The strategy relies on spreading conversation naturally rather than pumping dollars into other paid advertising channels like print ads.

For instance,Burger Revolution—a small business based in Ontario, Canada—uses social media to promote burgers of the month, rotating craft beers, and special giveaways for engaging with their content. You don’t need a full-time employee ormarketerto create those social posts. You could do it on your own as asmall businessowner—all for free.

Withword-of-mouth marketing, you’re engaging customers instead of inundating them with advertising. You’re creating a unique experience that they want to share with their family, friends, and other potential customers.

For example, theEvanston Rebuilding Warehousein Illinois repurposes materials and reduces waste in the construction industry. It also provides ample opportunity to workers regardless of educational, financial, or background-related limitations. This altruistic business strategy helps the company build brand loyalty and connect with its local community, primarily throughword-of-mouth marketing.

Likewise, if you can engage your audience with a compelling story or experience, there’s a much greater chance they’ll continue to frequent your business and refer it to others. As an added bonus, retaining loyal customers will be much cheaper than findingnew customers, which cancost five times as muchto acquire.

Word-of-mouth marketing campaignsbuild trust in a world where consumers are bombarded bydigital marketing.

Consumerstrust recommendationsfrom family, friends, and other consumers—39% of consumers developed trust for a brandthrough peer-to-peer conversation, compared to only 23% from a brand’s paid advertising.

Consumers are greatly influenced by word-of-mouth marketing—like online reviews—with93% of consumerssaying it influenced their purchase decision.

When a customer shares their experience with your brand online or with a friend, they’re saying they vouch for your company. It’s as if they are giving their stamp of approval.

Your word-of-mouth strategy should be built on providing apositive experienceand excellent customer service to your client base. You can’t foster organic growth for your business if you don’t impress your regular customers.

From there, you can create opportunities for people to spread the word and encourage them to talk to their family and friends about your business.

Here are five ways you can put marketing efforts in the hands of your existing customers, along with someword-of-mouth marketing examples.

Referral marketingcan jump-start yourword-of-mouth marketingefforts.Referral programsare an indirect way of prompting customers to share your business with their family and friends.

You provide an incentive for everynew customerthey send your way—typically, a discount on their next purchase, gift cards, or free products. This encourages customers to recommend your business to their network of contacts.

To make the deal even sweeter, you can offer a two-wayreferral program, which rewards the referrer as well as thenew customer.

For example, boutique salonBlack the Salondeveloped areferral programthat offers existing customers a free visit when they refer three new customers.

Customer reviewsare the purest form ofword-of-mouth marketing: Ideally, a customer patronizes your business, has a greatcustomer experience, and leaves a review on anonline reviewplatform.

Reviews are one of the most influential factors consumers consider when making a purchase. One study shows that 97% of consumersmake a purchase after visiting Yelp. On top of that,nearly 80% of customerssay they trustonline reviewsas much as a personal recommendation from family or friends.

Get a free Yelp Page Promote your business to local customers. Claim your free page

Online reviewplatforms likeYelpserve as a centralized hub for customertestimonials.If you provide great customer service, you’ll increase the likelihood of receiving positive reviews fromhappy customers. This is also the perfect place and time torespond to those reviews. Thank those who had a great experience, and follow up with reviewers whose expectations may not have been met.

To respond to reviews and show off your customer service skills,claim your free Yelp Business Page. 

Influencer marketinginvolves creating partnerships withsocial mediausers who have a devoted following.Influencersare trusted by their followers and are seen as a reliable source of information, with80% of peoplereporting they have made a purchase based on aninfluencer‘s recommendation.

You can partner with localinfluencersto endorse your business on social media sites, giving you an effective way to align your brand with like-minded people and reach an expanded audience. Consumers think, “This reputable person I trust uses this business. Maybe I should too.” Just be sure you and the influencer are both followingendorsement guidelines—for example, clearly marking sponsored posts with “#ad” or “#sponsored.”

In some cases, the influencer can be the business owner or other members of the company. Chef James Rigato uses his personal Facebook account that has nearly 4,000 followers topromote events at his restaurant—Mabel Gray. This contributes significantly to the overall reach of the restaurant’s event promotion.

Influencer marketingdoesn’t need to be on a grand scale. You can partner with local “micro-influencers” who may only have a following of 1,000 to 10,000 people but hold more sway within a specific industry or region.

Interestingly, influencers with more followers on platforms like TikTokyield lower engagement ratesthan those with fewer followers. Those with 15,000 followers or less show a 10.8% engagement rate while influencers with 500,000 to one million followers have an 8.6% engagement rate.

To locate localinfluencers, start by combing through your comments, followers, and anyone who has engaged with your content. You can also search industry and city-specifichashtagsonsocial mediaplatforms, like “#AustinMoms” or “#DetroitDIY.” Identify people who have a few thousand followers and strong engagement with fans, such as positive comments and questions on their posts. Reach out to them to see if they’re interested in a potential partnership. It never hurts to ask.

Social media marketingusessocial mediaplatforms to engage consumers, buildbrand awareness, and eventually grow sales revenue. It’s a free way to market your business through posts that feature text, photos, graphics, and video.

Business owners have a lot of freedom when it comes to posting onsocial media, but many struggle with usingiteffectively. The key is to post content that’s interesting, informative, and useful for yourtarget audience.

Think about what makes your business unique and valuable to customers. For example,Full Spiral Salonspecializes in curling and coloring curly hair. The owner uses Facebook to host live Q-and-A’s. Those who join can learn from the stylist and ask questions about curly hair maintenance, styling tips, and more.

Another way you can leveragesocial mediais by running a contest or giveaway, where customers are encouraged to follow your social page, like your content, and share your page with their followers. In exchange, they’ll be entered in a raffle for a free product or service.

For example, two small businesses—the Yoga Shelter and vegan restaurant Seva Detroit—partnered for a giveaway. Participants were required to follow both accounts, like the post, and tag a friend to be entered into a drawing for a $25 gift card at each business.

User-generated content(UGC) is the photos, videos, and social posts that your customers share about your business. HarnessingUGCallows you to show potential customers how much other people love your business.

A simple way of utilizinguser-generated content marketingis reposting content that your customers have already shared onsocial media. For example, you can search for people who have tagged your business in photos or social stories and repost them to your business profile crediting the customer’s page.

Another way to capitalize on UGC? Create opportunities that encourage people to share content related to your business. For instance, the popular Chicago dessert spotBomboBarencourages people to share images of its treats by creating photogenic spots around the restaurant, including a colorful mural outside. Its branded packaging invites customers to “show us your bombos” (an Italian donut)—and they do: BomboBar’s online profiles are full of images of people posing against a pastel backdrop, ice cream and donuts in hand. 

Word-of-mouth marketingessentially means your existing customers are promoting your business on your behalf. This can occur naturally after they have great interactions with your business, or you can inspire them to share with their networks by setting up a special giveaway or displaying branded, picture-worthy decor at your storefront.

For more ways to boost your bottom line, explore theselow-cost ideas to promote your businessandfree online advertising tactics.