What is word-of-mouth marketing? This is one of the promotion strategies that involves the use of natural interpersonal relationships and recommendations. As part of word-of-mouth marketing, as in the case of influencer marketing (which is partly related to the topic of this entry), it is important, among other things, to identify key influencers who have a large reach among their target group. Cooperation with such people allows you to reach a wide group of potential customers who are more willing to trust the recommendations of their favorite creators than traditional advertisements. An important element of word-of-mouth marketing is also creating valuable and engaging content that will be willingly shared by recipients. Thanks to this, information about the product or service spreads naturally, which contributes to increasing brand awareness and building a positive image.
Introduction to word-of-mouth marketing
As we wrote in the introduction, word-of-mouth marketing is a promotional strategy that involves the use of natural interpersonal relationships and recommendations, instead of traditional forms of advertising in the press or television. It is worth conducting such activities because they are based on building trust and authenticity, which translates into greater effectiveness of promotional activities. Word-of-mouth marketing is particularly effective when promoting products and services that often require trust and recommendations from other people, e.g. cosmetics, dietary supplements, or financial services. As part of activities related to word-of-mouth marketing, we can specify the identification of key influencers, creation of valuable content, cooperation with influencers, and monitoring the effects of activities. Examples of the use of word-of-mouth marketing include cooperation with bloggers, vloggers, or celebrities who recommend a given product or service to their recipients.
The effectiveness of this marketing is based on building trust and authenticity. The effects of word-of-mouth marketing activities include increasing brand awareness, increasing sales of products or services, building a positive image, and increasing customer loyalty. Word-of-mouth marketing on the Internet is mainly based on cooperation with influencers and activities in social media, while traditional word-of-mouth marketing relies on recommendations from customers, friends, or family. Online activities allow you to quickly reach the target audience but may be less credible due to paid cooperation with influencers. Traditional word-of-mouth marketing is based on authentic recommendations, but its reach is limited to local communities.
Benefits of word-of-mouth marketing for companies
Thanks to word-of-mouth marketing, companies can increase brand awareness, increase sales, build customer trust and loyalty, and achieve better results in website positioning. Examples of companies that have achieved success thanks to word-of-mouth marketing include Glossier, Warby Parker, and Airbnb, which have built a strong position on the market thanks to recommendations and cooperation with influencers.
It is also worth looking at the impact of word-of-mouth marketing on your company’s SEO. Generating valuable content consistent with the company’s development direction and which will be willingly shared by recipients may lead to an increase in the number of links leading to the company’s website.
How to conduct word-of-mouth marketing activities?
Introducing word-of-mouth marketing into your company’s promotional strategy can bring many benefits. To get started, it’s worth familiarizing yourself with the basic steps, such as creating a word-of-mouth marketing strategy, choosing the right tools, and preparing a word-of-mouth marketing campaign. These are typical steps in building most internet marketing activities.
When creating a word-of-mouth marketing strategy, it is worth paying attention to several key elements. First, you should define the goals of the campaign, such as increasing brand awareness, increasing sales, or building customer loyalty. Then, it is worth choosing appropriate word-of-mouth marketing methods, such as cooperation with influencers, activities on social media, or recommendations from customers. In the next step, it is worth identifying the target group and developing an action plan that will allow you to achieve the set goals.
Word-of-mouth marketing can use various tools to help maximize the effects of your campaign. Examples of such tools include platforms for cooperation with influencers, social media monitoring, e.g. Hootsuite or Sprout Social, and tools for analyzing campaign results, such as Google Analytics or SEMrush. Using these tools, you can more easily identify appropriate influencers, monitor social media activities, and analyze campaign results, which will allow you to optimize your activities and achieve better results.
Preparing a word-of-mouth marketing campaign requires taking into account several key elements. Firstly, it is worth developing a message that will be attractive to the target group and consistent with the brand values. Then, you should choose appropriate communication channels, such as social media, blogs, or cooperation with influencers. In the next step, it is worth developing a schedule of activities and resources that will be needed to implement the campaign, such as promotional materials, budget, or support from the team. When working with influencers, you must also remember to prepare appropriate guidelines that will allow you to create a consistent brand message. Finally, it is worth establishing success metrics that will allow you to assess the effectiveness of the campaign and make any changes.
How to use word-of-mouth marketing?
One example of a successful word-of-mouth marketing campaign is the cooperation of the clothing brand Zara with influencers on Instagram. Thanks to this, the brand gained greater recognition and interest in its products. Another example is the Red Bull campaign, which engages athletes and influencers to promote its energy drink by participating in extreme sports events. Thanks to such activities, it is possible to increase the reach of information to the end recipient.
These campaigns were successful because they leveraged the authenticity and trust that influencers enjoy in their community. Thanks to this, product recommendations were perceived as credible and convincing, which contributed to an increase in interest in the brand and its products. To effectively promote a product using word-of-mouth marketing, it is worth using methods such as cooperation with influencers, organizing competitions and promotional campaigns on social media, or encouraging satisfied customers to share their opinions and recommendations.
The key to success in word-of-mouth marketing is choosing the right influencers who are related to the topic of the product and are trusted by their community. You should also ensure the attractiveness and added value of the product offered to arouse interest and willingness to recommend it among influencers and customers.
Industries using word-of-mouth marketing
Word-of-mouth marketing is especially popular in industries such as fashion, cosmetics, food, sports, tourism, and technology. In these sectors, the opinions and recommendations of influencers are of great importance to customers’ purchasing decisions.
Activities in this area in these industries result from the fact that products and services offered by companies in these sectors are often difficult to evaluate before purchase. Therefore, customers look for reliable opinions and recommendations to help them make decisions. Word-of-mouth marketing allows you to use the trust that influencers enjoy to promote products and services in a more convincing way than traditional advertising methods.
Analyzes in word of mouth marketing
To assess the effectiveness of activities, it is worth paying attention to metrics such as the number of new customers, sales growth, campaign reach, and the level of recipient engagement. The analysis of these indicators will allow you to assess the effectiveness of marketing activities and their impact on the company’s results.
When analyzing word-of-mouth marketing, it is worth focusing on the following metrics:
- Campaign reach – the number of people who came into contact with the marketing message
- Engagement – the number of recipient interactions with the message (e.g. likes, comments, shares)
- Increase in the number of new customers – the number of people who made a purchase as a result of the campaign
- ROI (return on investment) – the ratio of profits to campaign costs
Is word-of-mouth marketing profitable?
Word-of-mouth marketing can be very profitable if properly planned and executed. Compared to traditional advertising methods, it allows you to reach more people and take advantage of the trust enjoyed by influencers, which translates into greater campaign effectiveness.
The costs of marketing activities may be lower than in the case of traditional advertising methods, especially if we cooperate with micro-influencers. The benefits of word-of-mouth marketing include increasing brand recognition, increasing the number of customers, and improving the company’s image. However, it is worth remembering that the effectiveness of word-of-mouth marketing depends on many factors.
Word-of-mouth marketing costs
The costs of word-of-mouth marketing can be calculated by summing up the expenses for:
- Influencer remuneration (fixed rates or sales commissions)
- Production of promotional materials (e.g. photos, videos, texts)
- Organization of competitions and promotional campaigns
- Monitoring and analysis of campaign effects
The largest part of the budget is usually the remuneration of influencers. The amount of these remunerations depends on many factors, such as the number of followers, audience involvement, or the reputation of the influencer. However, it is worth remembering that cooperation with micro-influencers may be more profitable because their remuneration is lower and the involvement of recipients is often higher than in the case of people with a larger reach.
Ethics in word-of-mouth marketing
Ethics in word-of-mouth marketing refers to honesty, transparency, and responsibility in relationships with recipients and influencers. It is important that marketing messages are truthful, do not mislead recipients, and do not violate their privacy. Moreover, it is worth taking care of the well-being of influencers by offering them fair remuneration and terms of cooperation.
Tips on how to conduct word-of-mouth marketing ethically:
- Inform recipients about the advertising nature of the message, e.g. by marking posts as “sponsored” or “advertising”
- Work with influencers who actually use the product you are promoting and are able to provide authentic feedback
- Ensure transparency of remuneration and terms of cooperation with influencers
- Monitor and control the content published by influencers to avoid false or controversial statements
- Respect the copyrights and privacy of recipients
- The legality of word-of-mouth marketing
Word-of-mouth marketing is subject to legal provisions, such as consumer protection regulations, copyrights, and image rights. In Poland, word-of-mouth marketing is regulated, among others: by the Act on Counteracting Unfair Market Practices and the Code of Ethics in Advertising.
Tips on how to conduct word-of-mouth marketing legally:
- Ensure that marketing messages are truthful and do not mislead consumers
- Mark advertising content in a way that is visible and understandable to recipients
- Comply with data protection and copyright regulations
- Cooperate with influencers based on contracts that specify the rights and obligations of both parties
- Ensure compliance with the Code of Ethics in Advertising and other ethical principles in word-of-mouth marketing
By following the above advice, we can conduct word-of-mouth marketing in an ethical and legal manner, which will contribute to building a positive image of the company and increasing the trust of recipients.
Word of mouth marketing – how to avoid mistakes
In this section, we will discuss the most common mistakes and pitfalls that can occur in word-of-mouth marketing. You will learn how to avoid these problems and when they may not bring the expected results.
When word-of-mouth marketing doesn’t work
Word-of-mouth marketing may turn out to be ineffective if it is not properly planned and carried out. Examples of situations in which word-of-mouth marketing may not produce the expected results include cooperation with inappropriate influencers, lack of consistency of message, or incorrect marking of advertising content.
Tips on how to avoid situations in which word-of-mouth marketing does not bring the expected results:
- Carefully analyze and select the influencers you intend to cooperate with, taking into account their reach, target group, and authenticity.
- Make sure your message is consistent and your advertising content matches your brand’s values and image
- Monitor and control the content published by influencers to avoid false or controversial statements
- Make sure that influencers mark advertising content in a way that is visible and understandable to recipients, e.g. by marking posts as “sponsored” or “advertising”
- Regularly analyze and measure the effectiveness of your marketing activities to make appropriate adjustments
- Mistakes in word-of-mouth marketing
Common mistakes in word-of-mouth marketing include improper selection of influencers, lack of consistency of message, inappropriate marking of advertising content, or neglect to monitor and control the content published by influencers.
Tips to avoid these mistakes:
- Select influencers carefully, taking into account their reach, target group, and authenticity
- Make sure your message is consistent and your advertising content matches your brand’s values and image
- Mark advertising content in a way that is visible and understandable to recipients, e.g. by marking posts as “sponsored” or “advertising”
- Monitor and control the content published by influencers to avoid false or controversial statements
Regularly analyze and measure the effectiveness of your marketing activities to make appropriate adjustments
Threats of word-of-mouth marketing
Word-of-mouth marketing carries certain threats, such as loss of recipients’ trust, infringement of copyright or image rights, as well as the possibility of a negative Streisand effect, i.e. an unintentional increase in interest in a controversial topic.
Tips to minimize these risks:
- Follow the rules of ethics and legal regulations in word-of-mouth marketing to avoid copyright or image violations
- Work with influencers who actually use the product you are promoting and are able to provide authentic feedback
- Monitor and control the content published by influencers to avoid false or controversial statements
- Ensure transparency of remuneration and terms of cooperation with influencers
Regularly analyze and measure the effectiveness of your marketing activities to make appropriate adjustments
Summary
In the article, we discussed the most important aspects related to word-of-mouth marketing, such as errors, pitfalls, and threats. We have also provided specific tips on how to avoid these problems and how to effectively use word-of-mouth marketing in your promotional strategy.
We emphasized that it is crucial to select appropriate influencers, ensure consistency of message, and correctly mark advertising content. We also pointed out the need to monitor and control the content published by influencers and regularly analyze the effectiveness of marketing activities.
In the context of threats related to word-of-mouth marketing, we drew attention to the risk of losing recipients’ trust, infringement of copyright or image rights, as well as the possibility of the negative Streisand effect. We have also provided tips on how to minimize these risks, including complying with ethical principles and legal regulations, cooperating with authentic influencers, and ensuring transparency of remuneration and terms of cooperation.
Putting these principles into practice will allow you to effectively use word-of-mouth marketing to promote your brand, increase your reach, and build lasting relationships with your audience.
If you would like to introduce word-of-mouth marketing services into your advertising activities, but you do not know how to go about it, please contact us. PAGEART Interactive Agency will help you implement and measure activities related to this type of advertising.