Are you thinking about teaching how business owners can benefit from word of mouth and you need some word-of-mouth marketing case studies? This post is perfect for you. Below are 5 examples of Word-of-Mouth Marketing and some fun facts about, along with some research on the importance of word-of-mouth marketing. At the end of the post, there's the opportunity to look at our fantastic Word-of-Mouth Marketing course kit to speed things up for your own course creation!
What is Word-Of-Mouth Marketing?
Word-of-mouth marketing (or WOMM for short) is what happens when customers or clients do your marketing for you. There’s nothing better than satisfied customers praising your products and services and recommending them to others.
Imagine you're over at a friend's house. You notice her hair looks really shiny and healthy, and you tell her so. She thanks you and mentions she's changed shampoo to a local, natural brand that has made all the difference. You make a mental note of the brand. Later that week, you notice a bottle of the shampoo, you recall your friends recommendation, and you pick up one to try. That's word-of-mouth marketing in action. It occurs naturally in conversations and is the most trusted form of marketing.
Word-of-mouth marketing is the most trusted form of marketing
How Important is Word-Of-Mouth Marketing?
Did you know word-of mouth-marketing drives $6 trillion of annual consumer spending? Word-of-mouth marketing happens because consumers trust their friends. As a business owner, you can't just sit back and cross your fingers that someone, somewhere, is talking about your business!
Word of mouth has the rare trait of being able to increase brand loyalty. In fact, a study from the Wharton School of Business found that referred customers are between 16% to 24% more loyal on average.
Think about how you value the opinion of your family and friends, and how these shape your buying habits. That's how WOMM works.
Think about how you value the opinion on your family and friends, and how these shape your buying habits. Now you have a great idea of how WOMM works. The question is: are you using it fully for your business?
Fun Facts About Word-Of-Mouth Marketing
1. Word-of-mouth promotion is the most trusted of all forms of marketing – 86% of customers trust word-of-mouth reviews and recommendations. (Source: Referral Candy)
2. 59% of customers like to give word-of-mouth feedback – they tell others about new products and services. (Source: Referral Candy)
3. 85% of small businesses are discovered by customers due to word-of-mouth recommendations. (Source: Writer’s Block Live)
4. Customers acquired through word-of-mouth promotion spend 200% more than the average customer.(Source: Referral Candy)
5. 92% of consumers trust recommendations from friends. (Source: BigCommerce)
Word-Of-Mouth Marketing Case Studies
Local Word of Mouth for Stores
"A leading high-street retailer wanted to expand its branch network into individual towns. But first it needed to resolve a conundrum: why were some of its branches welcomed by the local community while others encountered fierce resistance?
The experiences of two branch managers were instructive. One, who was leading a branch opening, approached the local vicar. He told him about the store opening plans and asked his advice about where he might make his own home in the area, including the best estate agents and schools. The vicar spread the word and a week later the manager was met by an enthusiastic group of people who knew his name and had answers for many of his questions. The branch opening was ultimately widely supported.
The other manager, who was expanding an existing branch, simply submitted his plans to the Town Council. Yet from the moment the application was received, it encountered hostility from a small number of leading citizens as well as the local press. The expansion had to be postponed for months and the issue became a sore spot within the community and the company.
It was clear that certain individuals in the community held great influence over others and that certain messages worked while others did not. Recent research has confirmed that:
- the opinion of friends, family and trusted sources is the most important factor influencing any individual's decision
- 10% of the population have the greatest influence over the other 90%
- messages with a strong emotional connection and independence from the marketer are most likely to get through.
The retailer wanted to determine how word-of-mouth marketing could help the expansion of the branch network into individual towns. Specifically, the challenge was to illuminate the social networks of local communities, identify the influencers and determine how best to get people talking – and buying."
Online and Offline Word of Mouth
"Chipotle is only just recovering from a food safety scandal that saw sales plummet. However, with a famously non-traditional advertising strategy, it has previously generated much of its success from clever and shareable online campaigns.
In 2013, it released an online video called ‘The Scarecrow’, depicting a dystopian world in which a scarecrow is forced to work in a fictional factory but eventually rebels to run his own. The video also happened to be a trailer for an accompanying iOS app that allowed players to earn codes for free Chipotle menu items.
By combining powerful storytelling with a real-life incentive, Chipotle’s campaign generated massive engagement. The video was viewed 6.5m views times on YouTube in under two weeks, while the game went to number one in app store’s free category. Most importantly, the campaign involved no paid media during the first four weeks, immediately gaining traction through social alone.
Offline, Chipotle also ensures word-of-mouth marketing by delivering a positive customer experience. Its employees are typically jovial and friendly, helping to foster the brand’s unique ‘food culture’. In order to maintain a high level of service, it implements what it calls ‘four pillars of throughput’. In other words, four essential roles, including a ‘linebacker’ whose sole job is to replenish ingredients so others can focus on taking orders.
Ironically, Chipotle’s food safety scandal spread like wildfire due to negative word-of-mouth, but as it tries to win back favour, it’ll be focused on turning this around."
Lush & Word of Mouth Marketing
"In recent years, YouTube has turned out to be one of Lush’s most effective marketing channels.
Despite uploads on the brand’s own account being surprisingly rare, mentions from a number of influential internet personalities has meant that it has still enjoyed valuable exposure.
With the likes of Zoella and Tanya Burr declaring their undying love for the brand in endless ‘Lush hauls’, the store has garnered millions of new customers as a result.
There’s no denying the power of this word-of-mouth marketing. Despite the world of influential advertising becoming increasingly murky, most of Lush’s endorsements do appear to be organic (with many videos appearing during the early days of YouTube).
With millions of subscribers, personalities like Zoella are able to influence buyer behaviour far more than most other forms of advertising – a fact that has certainly gone in Lush’s favour."
The flower shop that makes people smile
"Fleur, a florist shop in Chicago, puts a bucket full of bright balloons by the door of their shop both inside and out, with a handwritten sign that says: “Take a balloon.”
That’s all. No logos, no catch. It is just a small action to make people smile. Inside the store, it makes a pretty display, and outside the store, people are likely to ask where you got the balloon.
That’s a simple, fun way to get a conversation started without a marketing message. A bucket full of balloons is a bucket full of word of mouth memories waiting to happen. It doesn’t have to be branded or a part of a larger campaign — in fact, the simpler you make it, the better."
It is possible that no other company has ever implemented referrals as a word of mouth growth system better than Dropbox. Dropbox grew their user base from 100,000 to 4,000,000 in only 15 months through an incredibly effective referral strategy for a product that was difficult to market in 2008: personal cloud storage. While extremely useful, cloud storage was not something the average consumer understood or searched for, making it particularly difficult to spread through word of mouth.
In cases like this, word of mouth needs to be based on some sort of incentive or transactional benefit that is easily understood by both users and potential new customers—Dropbox managed to hit the bullseye after trying growth strategies that failed horribly.
Dropbox implemented a simple two-sided referral program that rewarded both the referrer and referee. While many brands have tried referrals, this word of mouth strategy worked so well because of the reward they chose as well as the referral user experience.
Firstly, Dropbox followed a cardinal rule of referrals: relevance. Instead of giving away t-shirts or mousepads, they gave users more of the product they signed up for in the first place, storage space. While this may seem like a simple decision, its impact was significant. Dropbox could already be confident that the incentive was appealing because customers had already signed up for their service, more storage would only make the service more useful. Storage space was also an efficient incentive for Dropbox as it is relatively inexpensive compared to purchasing merchandise and shipping it around the world.
Secondly, Dropbox made the referral process as easy as possible with an intuitive user experience and compelling copy. Immediately after signing up for an account, users were given the opportunity to get more space by referring friends directly or creating social posts through a link.
Ultimately, Dropbox nailed three tenets of effective referrals to achieve major growth:
The product was desirable
The incentive was related directly to customer needs and the product
The user experience made referrals frictionless
ALS Ice Bucket Challenge
Remember that blazing hot summer you spent watching everyone on Facebook dump buckets of ice water on people’s heads? The ALS Ice Bucket Challenge is a fantastic example of word of mouth marketing.
Participants filmed themselves getting a bucket of ice water dumped on their heads, and they then nominated others to do the same in less than 24 hours or forfeit by giving a financial donation to the research of the disease amyotrophic lateral sclerosis (Lou Gehrig’s disease). The phenomenon spread quickly across the Internet, with everyone from professional athletes to your grandparents jumping in on the action.
In the end, the ALS Associated raised $115 million from the campaign to fund further research and increase access to care for people with ALS.
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Word-of-mouth marketing is a powerful technique for all business owners to use to grow their business by leaps and bounds. If you've found this post useful, please share it with your followers.
Word-of-mouth marketing is a powerful technique that will grow your business by leaps and bounds.