8 Ways Retailers Can Increase Word of Mouth and Referrals [Updated for 2019]

Word of mouth is one of the most powerful drivers of traffic and sales for retailers. According to McKinsey, it’s the primary factor behind 20 – 50% of all buying decisions and can influence purchases in ways that traditional advertising can’t.

Word of mouth is like the holy grail of marketing. But before diving into how you can harness word of mouth in your business, let’s talk a bit about what it is and why you should invest in WOM marketing.

What is word of mouth marketing?

Word of mouth marketing is all about encouraging dialog around your brand by encouraging your existing customers to talk up your products and services. 

Unlike traditional forms of marketing and advertising, WOM marketing comes off as more authentic because it stems from conversations between people, versus “official” branded efforts like TV ads or banners. This makes it a powerful marketing strategy, and it’s something every brand should implement. 

To help you tap into the power word of mouth, we’ve compiled some tips that you can put into action in your business.

1. Offer exceptional products and customer service

When you have truly outstanding products and services, many of your customers will talk up your store all on their own. So before you cook up word of mouth gimmicks or referral programs, make sure that you’re blowing away shoppers with fantastic products and customer service.

Invest in your merchandise. Use high-quality materials, see if you can present them better, and highlight the ways your products are superior to others.

In the same vein, you should also invest in your staff. Allocate resources for staff training and happiness. Come up with ways to keep your employees engaged and motivated.

You’ll find that these investments can pay off in the form of delighted, raving customers who tell all their friends about you.

One example of a retailer that’s focused on product and service quality is American Giant. Rather than spending a ton of money on advertising and marketing, the retailer invests in developing high-quality merchandise. American Giant believes that when they provide exceptional products and customer service, customers will naturally spread the word.

As they say on their website:

The pressure to attract consumers leaves most apparel businesses with bloated marketing budgets. We have a different approach. Instead of investing in billboards and commercials, we invest in quality product and great service with the hope that our customers will become our advocates. We’ve found that if we can exceed customers’ expectations, they want to share and spread the word for us.

This strategy worked out great for American Giant. One of their main products, the classic sweatshirt, was dubbed the best hoodie of all time. At one point, the retailer couldn’t make the sweatshirts fast enough, and shoppers had to wait months just to buy it. Not bad for a company that doesn’t advertise.

2. Spell it out for customers

Sometimes, you need to give people a little reminder to spread the word about your brand. You can do this in-store by putting subtle prompts around your shop to get people to talk about your products.

For instance, some apparel retailers have hashtag stickers in their dressing rooms to nudge customers into sharing photos of themselves while trying on the store’s clothes.

New York & Company, for example, has hashtag decals posted on their fitting room mirrors.

Other merchants are more explicit with their word of mouth efforts. Take, for example, Sleeping Baby, an online retailer that sells swaddle transition blankets for babies. Whenever someone buys their products, Sleeping Baby encloses a postcard with each delivery, thanking customers for the sale and requesting that they post a photo of their baby with their products on the company’s Facebook page.

Because of this, Sleeping Baby’s Facebook page is filled with customer photos and comments. Aside from getting people talking, having all that social proof also increases the likelihood that people will buy.

The key takeaway here? You can get people talking (or posting) just by reminding them to do so. If you have amazing products that customers love, ask them to spread the word. There’s a big chance that they’ll say yes.

3. Incentivize people to refer their friends

In some cases, you need to give your customers an extra push to get them to spread the word about your business. This is where referral rewards come in. Come up with a program that automatically rewards customers for every successful referral.

The type of reward you provide will depend on your business. Some retailers may offer a discount for each referral. Untuckit, for example, gives customers a $25 credit for every friend that places an order on the site. 

If you have an existing loyalty program, then it may more sense to integrate your WOM marketing into your current setup.

For example, Buda Juice, a store that sells pressed juices, makes referrals a part of its loyalty program. Whenever a member sends a customer their way, Buda Juice rewards the customers with 50 loyalty points. 

4. Identify and engage brand advocates

Recognize that people have varying word of mouth potentials. Some shoppers are more likely to make referrals compared to others. The key is to identify individuals who are most likely to recommend you to their friends, and then reach out to them.

How do you zero in on these people? Turn to your best customers. Go through shopper data and find individuals who have purchased and interacted with your brand the most. From there, create a campaign to encourage word of mouth and referrals.

One brand that did this well is Sony. According to Marketing Sherpa, to increase signups for its branded credit card, Sony identified their most engaged customers and sent those people an email incentivizing them to refer their friends.

For testing purposes, the company also sent the same email to a control group of non-influencers. Upon doing this, Sony saw that the influencer segment generated results that were 2.8 times better than the control group.

Consider doing something similar in your business. Rather than targeting everyone with a word of mouth campaign, do research on your top customers.  Determine who they are, and figure out the best way to approach them.

4. Run an influencer campaign

Pay attention to the people that your customers are listening to. Aside from their friends and relatives, are there bloggers, social media personalities who influence their buying decisions? Find these individuals and use their platform to spread the word about your brand.

If you want to see influencer marketing done right, take a look at the Swedish fashion retailer NA-KD. The apparel brand is only 4 years old, but it rapidly grew to be Europe’s fastest-growing companies. 

And one of the reasons its achieved such amazing results is NA-KD has invested in smart influencer marketing

According to the influencer marketing platform Octoly, NA-KD gave out free products to thousands of micro-influencers in exchange for honest reviews on Instagram. The company also sent unique promo codes to certain influencers to share to their fans and followers. Doing so allowed the brand to scale its influencer initiatives and it grew its Instagram following to more than 750,000 in its first year alone. 

The secret to the NA-KD’s success? It tapped into micro-influencers instead of targeting big-name Instagrammers who had millions of followers. As Octoly put it, NA-KD learned that “It’s better to work with a large group of influencers who have smaller followings than a small group of influencers who have larger followings.”

According to NA-KD, they worked with a fashion influencer who had 1.6 million followers, and she failed to deliver. Meanwhile, a collaboration they did with another influencer who had 350,000 followers generated “a ridiculous amount of sales” within a day. 

Looking to use influencer marketing to boost word of mouth? Start by finding relevant influencers in your niche. You can do this on your own by asking customers about the people they follow online. Alternatively, you could use services such as Octoly and Influenster to find the right people to collaborate with. 

Take a leaf out of NA-KD’s playbook by identifying the right influencers for your brand, and encouraging authentic conversions on social media. For best results, send these individuals free products to try and consider creating unique codes so you can track sales and referrals. 

Tip

Want to improve your influencer outreach results? Caitlin Gustafson of Web Talent Marketing shares the following advice:

1. Look for middle-level influencers; they aren’t as expensive to work with and oftentimes they’re still at the stage where they are flattered to be contacted by brands. Sometimes you can find influencers who are willing to do a review or mention your product on social media in exchange for free products and you featuring their review on your own social channels (especially if you have a great social presence.)

2. Look for influencers who may have mentioned your products before but do not regularly do so. It may be that they enjoy your products, but they just aren’t top of mind or they can’t afford to buy them regularly. Just sending a few free products – no strings attached – with a personalized note saying thanks for talking about your product – can get you a few new mentions.

5. Run a contest and use it to measure word of mouth

Janice Mckay, of Spring Lynn Motorcycles advises retailers to run a contest to generate word of mouth. According to her, doing so not only  generates engagement, but it allows you to measure the results quite easily. Have a look at what she has to say below:

Let’s say last month you spent $500 on 4 weekly adverts in the newspaper. You’re not sure who read it, if anyone at all! Plus, you’re not that confident with the wording and with the position of the advert in the paper. It’s totally hit or miss.

Wouldn’t it be far more effective — and engaging for your audience —to spend that same money on a giveaway instead?

The competition entries are a way for you to physically measure how many people have taken notice of your campaign and who they are. This enables you to perform important market research at the same time, so you know if the campaign and if it’s something you should replicate in the future. 

Be creative with your competition idea so that its newsworthy enough to notify the media. (Not sure how to notify the media? Learn how to write a press release here.)

And when you have a winner, make sure you get some photos of them with their exciting new prize. This photo and your competition story could make the news and get you:

a) A prime spot in the newspaper.

b) A much bigger space in the newspaper than the adverts you bought.

c) An interesting story that people might enjoy reading compared with a boring, generic advert.

d) An angle which makes you sound very generous with your giveaway offering.

Need inspiration for your giveaway? Consider this example from the souvenir shop To Home from London. In July, the company ran a contest where it put free merchandise up for grabs. To enter, participants had to follow @tohomefromlondon on Instagram and share the post on their stories.  

 

View this post on Instagram

 

It’s WORLDWIDE Giveaway time!!!! (And new rules)🔥 These are the last 2 Double Decker and Queen’s Guard Keyrings available and we are giving them away 😊 They won’t be coming back in stock for a while because I will try different designs for the next batch.⁠⠀ ⁠⠀ ⚠️We are slightly changing the rules to enter the competition, so you just have to: ⁠⠀ ⁠⠀ 1- FOLLOW us on Instagram @tohomefromlondon 🤘⁠⠀ ⁠⠀ 2- SHARE THIS POST ON YOUR STORIES and make sure to tag us so we can keep track of all the entries 🌈 ⁠⠀ ⁠⠀ We will announce the winner in our Stories and get in touch via DM.⁠⠀ ⁠⠀ .⁠⠀ ⁠⠀ No giveaway or business accounts allowed. This giveaway is not affiliated with Instagram.⁠⠀ #giveaway #giveaways #competition #travel #handmade #handcrafted #gift #keyrings #keyring #keychain #doubledecker #queensguard #lovelondon #londontrip #visitlondon #lovegreatbritain #uk #london_masters #londonist #londoner #london_enthusiast #londoncitylife #londonlover

A post shared by To Home From London (@tohomefromlondon) on

6. Sponsor or host events

“You can also notify the media if you are sponsoring an event, or holding one yourself,” Janice continues. “If you hold regular, exciting events, send regular press releases and after a while the media will get to know you as an exciting, forward-thinking business.”

“When sponsoring an event, it’s a good idea to also be involved with a charity – this is more newsworthy and the organization you team up with can also help you get media attention. Plus it means people recognize and trust you as a contributing member of the community.”

7. Build communities

Getting people together through events, clubs, and whatnot can organically generate word of mouth. When people are part of a community, they’re more likely to spread the word — and even recruit — like minded individuals.

One retailer that’s doing a stellar job at fostering communities is Lululemon. The retailer regularly holds local classes and events, and these initiatives bring people together. Lululemon events are fun and educational, so attendees get a ton of value out of them.

Another example comes from Pace Athletic, a specialty store for running footwear and gear in Australia. 

Pace Athletic’s co-founders, Will and Stuart opened their first store in 2014, and while things were going fine, they realized that they needed to do something different to set Pace Athletic apart from big chains and ecommerce sites selling the same things. 

So, they decided to focus on community-building. Will and Stuart started the Pace Run Club, a casual and inclusive club that brought its customers together. “From the fastest runner to the newest” is the Run Club’s motto — no one is too fast, and no one is too slow; members support each other and everyone should feel comfortable running at their own pace,” says Will. 

The initiative was a major success. In the 2 years since the first Pace Run Club started, Will and Stuart have grown their business to 5 stores with the support of hundreds of members who also shop regularly at Pace. There are now 3 Pace Run Clubs in Manly, Mosman and Rozelle and a Pace team for races.

If you have a highly engaged customer base, you’re in a perfect position to implement a community-building initiative. Come up with ways (hint: ask your customers) to bring people together in a fun or even educational way. Be it through meet-ups, online groups, or classes, see if you can launch something that would cultivate relationships and get people talking.

Further Reading


If you enjoyed this post, be sure to check out Vend’s guide to increasing sales. This handy resource offers 10 proven tactics for boosting retail sales and improving your bottom line.

Specifically, you will:

  • Discover how to turn savvy shoppers into loyal customers
  • Learn how to add real and perceived value to each sale
  • Discover the most effective ways to set yourself apart from your competitors

    Learn More

Bottom line

You can’t rely on traditional ads alone to drive buzz and awareness around your brand. You also need to get people talking in a natural and authentic way. Word of mouth marketing helps you do just that. With the right campaign, you can increase conversations, drive referrals, and ultimately boost your sales!

About Francesca Nicasio

Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.

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