Word of Mouth Marketing for Small Business | Get BIG Spend Nothing

Word of mouth marketing for small business

Table of Contents

Word of mouth marketing has been the biggest driver of sales in my business from day 1 to day now

You have heard people talk about word-of-mouth marketing but wondered what it really is and how you can benefit from it. This word of mouth marketing for small business guide is going to cover what it is and whether it will work for you. 

This is Part 2 of our complete guide to every SME marketing tip... ever. Want to read part 1 on print advertising?

By the end of this post, I think you will realise, just quite how valuable it will be for you.

word of mouth marketing for small business

Contents List
  • What is word-of-mouth marketing – a definition?
  • Why is it important?
  • How effective is the word of mouth marketing?
  • Why does Word of Mouth Marketing Work?
  • How to use word of mouth
  • Ways to encourage word of mouth for your small business
  • Word of mouth strategies reviewed

What is the word of mouth marketing definition?

…influencing or encouraging natural conversations about a brand, offer or event.

That’s our simplistic word of mouth marketing definition.

Essentially it means, getting people to talk about what it is you’re doing. And it’s great – when the conversation is positive. 

Why is WOM – Word of Mouth Marketing so important?

This time we will steal Yotpo the review app’s, headline statistic.

92% of consumers will believe a recommendation from friends and family over ANY other type of advertising.

It doesn’t take an MBA or a career in marketing strategy to understand then why WOM is so important. 

If you can encourage your brand’s best customers to talk about you, then the message will have more impact than an advert. That’s quite an impressive fact.

So you can pay £1500 to fill a page in a magazine to shout about how great you are. But, it will never have the same effect as if 3 Sallys, told their friends about you.

We know that for every touchpoint, or every hit to your site, the conversion rate is low. Around 2-3%.

But what is it for WOM?

Well a study by Big Commerce, showed some powerful statistics. Their report saw conversion rates from WOMM of between 7-15%

That is a huge jump. So if 10,000 people see your advert and 1-200 people visit your site, 3-6 sales are likely to occur. 

Yes, 3 sales. As low as THREE SALES! Magazines to be fair, are more about brand awareness, but still. 

With these statistics, you can see why word of mouth marketing is so important.

It converts at a higher rate than many other forms of media. Plus it’s can be cheap as all hell to do, and you can start now on a zero initial outlay.

word of mouth marketing statistics

How effective is word of mouth marketing?

Massively, in fact quite how effective is a word of mouth marketing strategy, that major brands incorporate it into their advertising and marketing budgets.

  • TOMS – Buy a pair of shoes, they donate a pair of shoes
  • Coca Cola – Share one with a friend
  • Facebook – None of us – ZERO, signed up for Facebook because of a paid ad did we?

But exactly how effective is it?

Consumers discuss brands in conversation, on average 90 x per week according to Hubspot. In a study from Ad agency Ogilvy, 74% of consumers say their primary driver for making purchasing decisions, is from other people mentioning a product.

But a key statistic for the future is where Millenials and Gen Z stand. We know that 71% of people are more likely to buy when influenced by someone they have trust in on social media, and Radius Global discovered this:

Millennials ranked word-of-mouth as the #1 influencer in their purchasing decisions about clothes, packaged goods, big-ticket items (like travel and electronics), and financial products.

Radius Global

Why does Word of Mouth marketing work?

According to Yotpo, word of mouth marketing works for two reasons.

  1. Social Currency – this means we like to know something, others don’t. We want to feel part of a private club.
  2. Ego – Now we are in that private club, we just need people to know about it.

It’s essentially the upside for a retailer or a business from the humblebrag. The art of trying not to show off how special you are.

If your business is that exclusive secret that gets spilt – you have benefited from word of mouth marketing.

How to use ‘Word of Mouth’ marketing?

So you know what it is, and you’re thinking “I NEED THIS!” and you’d be right to. So how do we get it working in your business? 

First, let’s talk about what ways there it’s done online and offline.

1. Offline

Everyone leads with online strategies, don’t they? How obvious. I am a shopkeeper at my core, and that means, offline comes first.

So let’s talk about where WOM is seen.

Your customers

If you have a shop or restaurant, or maybe you’re a PT – you hopefully have customers. People that come to you, or people you go to. And when they are done shopping with you, they probably talk to other human beings.

There is no better encouragement for an immediate word of mouth boost, by EXCEEDING customer service expectations. 

Going absolutely above and beyond. In customer services, this doesn’t mean exceeding the average customer experience. It means eclipsing what is normally considered GOOD customer services. 

For example, in the UK we all know that Waitrose focuses on good customer service. But once that experience is normalised to their customers, the impetus to talk about drops. 

They may notice the value of it if they shop somewhere else that lags behind. But, they aren’t necessarily going to tell the world about it, each time they buy tomatoes. 

Where we talk about exceeding, is if the experience one day at Waitrose was simply mindblowing. Then, the impetus spikes to tell their friends. Then you’ve planted a marketing megaphone with a high trust score in their social circle. WOM WIN.

How can you encourage your customers to promote you?

Well besides the obvious, such as incredible customer service, I am going to suggest what we did with success.

Just on the incredible customer service, I would recommend Zappo’s book ‘Delivering Happiness’ for this.

There is an audible as well as text, and the audio is narrated by the ‘Head Honcho’ Tony Hsieh.

Why do I recommend this book – because there are actionable steps you can follow to implement their systems in your SME. No matter your size.

  • Delivering Happiness – Story of Zappos 
how to use word of mouth marketing

How I used Word of mouth marketing for small business

Referral marketing has been the cornerstone of many a business for centuries. It is the act of someone recommending another. In your case, it’s someone telling a friend to shop with you.

This is an extension of word of mouth – it’s word of mouth with a commercial end focus.

In my retail business, for a long time, we had these little cards in-store. They said:

“Refer a friend and bring them into the store with you. When you do we give them 15% off and then you will get 15% and blah blah blah..”

It was a ridiculous set of hurdles to overcome for anyone to get the discount. But also was a paltry offer.

So you have to find someone willing to do this, who can find someone who is available when they are. We aren’t talking about 16-year-olds, but grown adults, with families and jobs etc. That means it’s the most inefficient system ever.

I knew we could do better.

What about a referral system that leveraged smartphones. One that meant you didn’t need two people to be in the store at the same time.

A system that could encourage someone to refer tons of people.

What about a system that was seriously compelling and able to be abuse checked.

Well, that’s what we developed. 

If you want to know the specifics of that, then we shall begin.

The WhatsApp Referral

Below you will see three designs we produced for an easy to implement word of mouth marketing system. No expensive apps, just some printed cards and a kind word at the till.

But I’ll get onto the pitch in a moment.

word of mouth marketing
This is the Whatsapp Word of Mouth Weapon of Mass Satisfaction

So above is my famed (to me), Whatsapp referral system.

Our stores had a loyalty card system, which is a great way of being able to re-market to lapsed customers, but also a useful tool for rewarding loyalty AND a fall back if they ever lose a receipt and needed to do a return.

What was great also, was that each card had a unique ID.

Notice that box above for membership number, this meant we could track the referral.

How does it work?

Simple as all hell. At the checkout, the staff member would bang their membership number down on the card and hand it over to the customer.

The customer would look at it, and the team member would say:

“You come in all the time, if you want to get some free vouchers, simply take a photo of that card and send it to your mates if they shop elsewhere.

If they come in with the photo and set up a loyalty card like you have, we add £10 credit on there for them and we have your ID number here to ensure you get your voucher too.

Our Referral Pitch

Seem simple?

Why 3 designs?

This is a basic A/B testing method, so we could see what cards got a higher response. So even in something as old school as referral marketing, there is a way to make it contemporary, trackable and improvable.

That to me is a solid system.

That was our system, now let’s have a look at some ways you can foster it within your business.

How you can encourage word of mouth marketing for your small business

Firstly, and I literally can’t stress this enough – as a small business owner you need to lead effectively.

You need a team that pull in the same direction and you need to ensure you have a set of rigorous quality standards across your business. We all make mistakes in our operations, but it’s learning and improving from them.

Get good and get worth talking about.

Some things truly matter to customers – what are they?

  • Customer Service
  • Ease of doing business
  • Quality of products
  • Affordability options
  • Strong positive values
  • Attention to detail
  • Cleanliness

In the melting pot of what creates fans of your brand, go many ingredients. Everyone has their ‘thing’ or their trigger. It could be as simple as being a clean builder, who tidies up after themselves. It could be a shop that the moment you walk through the door, the staff member stops what they are doing and greets you with a smile and maybe even your name.

Or it could be as simple as your the local business that hands out food parcels to the homeless.

Whatever it is, strong values and a great ethic are central to it all. Getting people to love your business is NEVER luck. It’s an investment in doing the right things brilliantly.

Spend a few moments now to write down what you would love about your business.

If you’re having problems, then your first task is to set about creating a set of core values in your business. Then establishing a process through action that evidences those values are more than just words.

Then train your team in them and explain why you’re pursuing them.

You will not be sorry you did this.

Do that, and the success stories of WOM will include you too.

benefits of word of mouth american cheesecake factory

Simple ways to ask your customers to promote you


Is it that hard?

Actually if you do take the time to strike up conversation with your customers, then yes.

Where we would monitor the performance of our retail store’s customer service patters, we could see how often they included rapport chat.

Rapport chat to us is simple small talk that helps you build bridges. Classic sales, tells you to not waste time on small-talk, but in smaller retail environments it’s a wise move.

How do I build rapport with customers?

Just as many of us have a favourite barber or stylist, your shop can become your customer’s favourite ‘whatever’. You won’t get that by being little more than a vending machine.

Taking payment and grimacing at them.

It takes time, and it takes lots of grimaces back at you too. Make it part of your sales process, and eventually it will become second nature.

We all know the brands who staff care that bit more. We also know the ones who are staffed by unhappy people who look like they are deciding between laying on the floor and dying or crying. Serving you is third.

One simple method we found to break the ice, was to incorporate the loyalty card swipe into this rapport moment. While swiping their loyalty card, you could see whatever other items they had bought before:

“How did you find X or Y?”

“Day off, or just stretching your legs at lunch?”

Every question you ask can lead to another.

We could see their name, so we would start by asking those less confident, to just say:

Team Member: “It’s Gary right?”

Customer: “Yes”

Team Member: “Great, just double checking – don’t want to give your points to someone else now do we?”

I get it, not everyone will linger for small-talk, but we really aren’t trying to make everyone fall into a deep and meaningful with us. Just those that will.

Same with any sales really, don’t try to sell to the ‘No’, find the ‘Yes’. With a little commitment to this, you will get more confident at doing it, and also find the customers who will take the time to talk.

These people will become your brand ambassadors in time.

These then become those people you can ask for a referral in the future. In fact, if they get on well with you, they will do it often without being asked.

Summary of our Word of Mouth for Small Business Guide

Well that sums that up. Having put finger to keyboard on 2000+ words, I wish I could end it that quickly!

thanks for reading this far. I hope you have some inspiration, some ideas, some sense that you don’t need to spend fortunes on Google ads to get more feet through the door. Sometimes your own customers can do the marketing for you.

But first you have to give them a reason to.

Then you need to reward them for it.

That’s word of mouth marketing for small business in a nutshell. A method old as time and as effective as anything out there. You don’t need a great marketing agency, just great values and a happy team.

Go out there and change your future.


Get Ambassador | https://www.getambassador.com/blog/word-of-mouth-marketing-statistics

With over a decade of e-commerce growth experience, I am at home talking about organic growth from start-ups to enterprise level businesses. Full-stack and data driven. Let's grow revenue, not just traffic.

If you have a problem and no-one else can fix it, contact me here or on Fiverr @seofairy

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