Word-of-mouth recommendations from satisfied clients are a highly effective form of advertising because they are persuasive, credible and above all free. Kate Horstead finds out how you can encourage your happy customers to spread the good word about your business
"A consumer will only recommend something if they are prepared to put their reputation on the line," says Steve Barton, president of the Word of Mouth Marketing Association (now part of the Association of National Advertisers).
The accepted way to make this happen is to provide such a good service that customers spontaneously recommend you to friends. However, only about 15% of your customers will actually be 'influencers', says Barton - and these are the people you need to concentrate on.
"It doesn't matter if they don't buy the specific product themselves," he adds. "What matters is that they talk to people about it. You need to get these people involved."
In other words, look for the portion of your satisfied customers that have the biggest influence among people who could become customers of yours - whether it’s an influential industry figure with a good reputation, or a social media guru with a specialism in your business area. Getting recommendations from these people will yield big returns.
Getting word-of-mouth influencers on board
Your regular customers, business connections, friends and family are likely to contain a host of word-of-mouth influencers. But even if you don't know who exactly is spreading the word, you can still mount a word-of-mouth marketing campaign.
What matters initially is understanding why people would recommend your business, and then how you can coax them into talking more.
"Word-of-mouth marketing works best when you've got something new to say - not necessarily a new product, but perhaps an innovation with a product," explains Barton. "The key is to identify the 'talking point' - what your influencers want to talk about, rather than what you want to say."
Using networking to encourage word of mouth
Face-to-face networking is a good way to reach potential word-of-mouth influencers - and a key tip is to give out two business cards so new contacts can pass one on.
You could also send out an email newsletter, publish a blog, talk to potential customers on social media, invite customers to preview new products, attend industry events - and so on. Every opportunity to communicate with people who might talk to potential customers is a chance to generate word-of-mouth recommendations and testimonials.
Is word-of-mouth marketing cost-effective?
Over time, your word-of-mouth marketing campaigns should become highly targeted; the key is to identify your key influencers and market specifically to them. Doing this requires a way to measure who is successfully influencing others to become your customers.
One way is to offer a discount to customers who introduce friends to your product or service. With an incentive like this, the influencer will identify themselves alongside the new customer; an email newsletter will enable you to track customer recommendations through a "send to a friend" option. And you should always ask new customers how they heard about you.
The marketing that leads to word-of-mouth recommendations might cost, but, as Barton says: "It's more important to focus on the return on that investment, which can be phenomenal."