For centuries, there was one main strategy businesses used to get customers.
It was free, it was powerful, and it created exponential business growth.
This strategy is word-of-mouth marketing (abbreviated as WOM).
Instead of spending money to get customers, your existing ones do the marketing for free. These existing customers bring more trust than you can create in your marketing.
Today, most businesses spend their time creating ads and social media posts, hoping the customer will refer their friends.
But WOM is more than creating a good product and relying on your customers to sell it. It can be engineered into your business.
Here’s an example.
Dropbox is a file hosting service that used WOM to grow from 100,000 to 4 million users in 15 months.
Their marketing strategy was giving extra cloud storage to both the referrer and the new customer while making it effortless to refer.
It was entirely free, and referred customers had 18% higher retention rates.
This means WOM didn't just bring in more customers; it brought in better ones.
So, how can you use this?
Social currency is making your customers look good when they share your business.
Your product should make your customer feel smart and increase their status.
You can create social currency by:
- Aligning your product with an identity/trait. People who buy Rolex watches are sophisticated and wealthy. Customers feel powerful and share that when they talk about the watch.
- Creating a specific and memorable name. Naming your products differentiates your business and makes it easier to share. Apple AirPods differentiated themselves from wireless earbuds by creating a specific and memorable name.
- Having a clear benefit for the referrer and invitee. Dropbox gave extra storage to the referrer and the invitee. It creates a win-win and makes the referrer seem like a generous person.
To test if your product has social currency, ask this question.
Would your customer feel proud telling someone they bought your product?
2/ Have a remarkable delivery moment
Go above and beyond.
Have something remarkable about your business that your customers can talk about.
For restaurants, this can be a rare dish. For hotels, this could be free cookies and milk. For online services, this can be personalized follow-ups after you finish the service.
Deconstructed: Zappos
Zappos, an online shoe company, has amazing WOM from its customer service.
In one instance, a customer called to return shoes that didn’t fit, and the employee paid them back and gave a complimentary pair of socks.
This interaction went public and created WOM that far exceeded the cost of one pair of socks.
Now, this strategy won’t work for most of you, and you don’t have to give away free products.
A remarkable delivery moment can be as simple as giving a handwritten card or gift.
3/ Create a referral trigger
Brands are all about associations.
To create word-of-mouth, connect your brand to things your customers think about frequently.
This trigger will associate your brand with that object.
Whenever your customer sees the object, they will think and talk about your brand.
Deconstructed: Morning Brew
Morning Brew is a daily business newsletter.
They associated their brand with coffee and the morning, so when people think of morning coffee, it triggers the thought of Morning Brew.
Even the Morning Brew logo is a coffee, which strengthens this association.
Your referral trigger can be a mix of a certain time, place, object, or feeling.
The more specific the trigger, the more likely the customer will think of your brand. Also, the more frequent it is, the more often your customer will think of and talk about your brand.
That’s WOM. There is no perfect way to do it.
But combining social currency, a remarkable delivery moment, and a referral trigger will increase the chances of word-of-mouth.
Talk soon,
- WL