Finding new ways to generate ecommerce sales is getting tougher.

Competition is fierce. And simply having a presence and a nice

looking web store is no longer enough to make you stand out.

Winning nowadays requires strategy and squeezing the most out of every opportunity.

But there’s one powerful area that tends to get neglected by

ecommerce businesses:

Word of mouth marketing (or WOMM).

What is Word of Mouth Marketing?

Word of mouth marketing (WOMM), also called word of mouth
advertising, is the social media era’s version of simple word of
mouth.

● Traditionally, word of mouth marketing was spread from one

person to another based on recommendation.
● Modern word of mouth marketing describes both targeted
efforts and naturally occurring instances where users share
their satisfaction with a brand.

In today’s hyper-connected world, a single recommendation can

have far greater impact – leading to word of mouth marketing
(WOMM) or word of mouth advertising strategies to capitalize on
the opportunity.
Many best practices and marketing tactics encourage natural word
of mouth, but campaigns — particularly on social media — can
have the explicit aim of promoting an online business’ social
exposure.

According to Nielsen, 92% of people trust recommendations from

friends and family over any other type of advertising. Even
academic research into WOMM has proven its effectiveness in
conversion.

In the International Journal of Market Research, M. Nick Hajili

wrote:

“Trust, encouraged by social media, significantly affects intention to

buy. Therefore, trust has a significant role in ecommerce by directly
influencing intention to buy and indirectly influencing perceived
usefulness.”

Organic Word of Mouth vs. Amplified Word of Mouth:

Word of mouth marketing happens in 2 ways: organically and through the use of marketing and
advertising campaigns.

The two have inherent overalps –– and over a good WOM marketing strategy will cause icnreased
organic WOM. Vice versa, if you already have a decent amount of organic WOM, your WOMM
campaugns will be much more successful.

These two types of WOMM are called and defined as:

● Organic word of mouth: Organic WOM occurs naturally when people become advocates
because they are happy with a product and have a natural desire to share their support and
enthusiasm.
 ● Amplified word of mouth: Amplified WOM occurs when marketers launch campaigns designed
to encourage or accelerate WOM in existing or new communities.

Word of Mouth Marketing Statistics

● Nielsen report that 92% of consumers believe suggestions
from friends and family more than advertising.
● Beyond friends and family, 88% of people trust online reviews
written by other consumers as much as they trust
recommendations from personal contacts.
● And 74% of consumers identify word of mouth as a key
influencer in their purchasing decisions.
● But only 33% of businesses are actively seeking out and
collecting reviews.
● Despite that fact that a little, can do a lot. When specific case
studies were analyzed, researchers found a 10% increase in
word-of-mouth (off and online) translated into a sales lifts
between 0.2 – 1.5%.

But there’s much more to word of mouth advertising and marketing than just ‘do a good job
and hope for a referral.’

So in this post we go into full detail on the subject:

1. What it takes to make word of mouth marketing work.

2. Specific strategies (with real-life examples) for setting up a
steady flow of referral customers.

Why Care About Word of Mouth Marketing?

Tactics such as setting up a cool social media ad or experimenting
with AI in ecommerce may sound more exciting (and like quicker
wins).

A strong word of mouth strategy at the heart of your business can

lay the foundation on which to build everything else from.

The Advantages of Word of Mouth Marketing:

● Grow sales without the ad spend: Many brands from The Hustle to Bangs Shoes and more
use word of mouth marketing instead advertising spend to increase sales and fanbase.
● Build a community not a commodity: Word of mouth marketing works to build an engaged fan
base rather than a buy and bolt customer. Higher engaged customers buy more often and
recommend their friends more often, extended your return on time spent on the strategy and
generating a high customer lifetime loyalty.
● More funding, more freedom: Brands with high customer lifetime loyalty and therefore repeat
purchases receive more angel and venture funding. Why? Because CAC to LTV, or Customer
Acquisition Cost to Lifetime Value, is considered one of the most important aspects of a
healthy business model in the early days of a company’s lifecycle.

In fact, there are three crucial factors a quality WOM marketing

strategy can affect:

1. Brand loyalty.
According to the National Law Review, it can cost five times more to
acquire a new customer than keep a current one.

And Bain & Co estimate that a 5% increase in customer retention

can boost a company’s profitability by 75%.

And think about this:

A positive word of mouth advertising and marketing strategy keeps
customers coming back. And referring other customers. Who also
keep coming back. And referring more customers….

All of a sudden you’ve got a machine that’s pumping out new

customers who are all loyal to your brand.

2. Brand trust.
HubSpot show that 75% of people don’t believe adverts, yet 90%
trust suggestions from family and friends and 70% trust consumer
reviews.

In other words:

People trust friends, family (and even strangers) more than they do
ads.

Word of mouth marketing means your brand is being recommended

in the most trustworthy context possible. And first time browsers are
much more likely to take that crucial extra step of handing over their
payment details.

3. Creating a buzz.
It’s great to have ad budgets and perfect sales funnels. But the only
way to create a genuine buzz about your brand is to have impartial
people shouting about you in the media and on social networks.
And a good word of mouth marketing strategy severely increases
the likelihood of this happening.

Impress the right person and you might even end up getting
featured in something like the New York Times.

In fact, this is the exact strategy Flash Tattoos used when they
nabbed a promotion and collaboration with Beyonce. The brand
was able to earn the star’s interest at festivals and through natural
WOM promotion on Instagram of their products.

Next thing you know, Beyonce is knocking down their door to get a
custom collaboration.

The collaboration made national headlines, including:

● Buzzfeed
● TIME
 ● Mashable
● Marie Claire
● Entrepreneur

For Flash Tattoos, sales increased 1,100% following the

collaboration.

CREATIVE WOM BEATS AD UNIT ECONOMICS

Word of mouth is becoming increasingly and a must-have component of any

ambitious brand’s marketing strategy.

Paid acquisition through channels such as Facebook, Instagram and Google have become
significantly more competitive, which is putting increasing pressure on brands’ gross margins (when
considering customer acquisition costs).
Brands thus have to focus on alternative marketing tactics, which have more cost-efficient unit
economics and simply requires less of a monetary investment.

One of the best recent examples is Patagonia’s “The President Stole Your Land” campaign. Their
tweet about this got more than 60,000 retweets. The overall campaign, which Patagonia targeted at
their own customers, generated worldwide publicity and contributed greatly to their marketing efforts.

– Adii Pienaar, High King of Ecommerce, Conversio

Create An Epic Experience First

There’s one thing to make sure of before doing anything else before
creating effective word of mouth marketing strategies:

That you’re already creating an epic customer experience.

Trying to get people to refer their friends and family to your

business is almost impossible if they had a poor experience. Even
with an average one it’s difficult.

You could even do the opposite and spark up a whirlwind of

negative publicity.

People refer others because they want to share something they

love. Not just because they might get a discount voucher for doing
it.

And with 65% of consumers having cut ties with a brand over just a
single poor encounter, it’s more important than ever to create that
amazing experience.

Here are a few things you can do to make sure that happens:
WOM IS BUILT-IN TRUST

Word of mouth customers convert better because they already have a level
of trust and confidence in your business that has transferred to them from the person who
recommended your store.

People who arrive by other channels, by contrast, might know nothing about your store and have to
be convinced first. Their levels of ‘trust’ are lower and conversions are correspondingly lower too.

In addition, if someone has had a good experience with your company and passes this message
along they are also likely to point out helpful tips (i.e. be sure to pick up your discount coupon, or log
in to get a free gift, etc) that make your offering more attractive to that person BEFORE they have
even visited the site.

Word of mouth customers come with built in levels of trust and confidence that other channels don’t.

– David Mercer, Founder, SME Pals

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Tesla case
Let’s dig into some examples of great Tesla PR
/ ‘free marketing’ in action:
1. A CEO who understands the power of showmanship
(tonnes of interviews, cameos and media
appearances)

“The public tends to be, as they should, interested in things that

are precedent and superlatives.” – Elon Musk [source]

The above quote, I think, captures a lot of the essence of Elon Musk’s

attitude towards marketing. He understands the utility of showmanship,

of having a larger-than-life persona (hence doing things like movie

cameos).

Elon Musk telling Tony Stark about his idea for an electric jet.
And if you ever Google “Elon Musk says” (with quotes), you’ll find a long list

of very showy things that he’s said:

● Elon Musk says we’re probably living in a computer simulation

● Elon Musk says Advanced AI could take down the Internet: “Only a

matter of time.”

● Elon Musk says humanity is currently running ‘the dumbest

experiment in history’

● Elon Musk says he plans to send rocket to Mars by 2018, manned

mission to planet by 2024.

● Elon Musk says people should receive a universal income once robots

take their jobs

● Elon Musk says nuking Mars is the quickest way to make it livable

● Elon Musk Says Tesla Vehicles Will Drive Themselves in Two Years

● Elon Musk says that Apple only hires Tesla’s worst engineers

● Elon Musk says he won’t go into genetic engineering because of “The

Hitler Problem”

In a way, Elon Musk and Donald Trump have a lot in common – they both

understand the power of saying something crazy.

The Hyperloop, which Elon Musk isn’t planning to make, but is great PR for

him as a tech visionary. This is something much like Walt Disney, PT

Barnum. He’s selling us a vision of a magical techno-wonderland.

There’s now an actual Hyperloop contest going on.

2. Good Guy Tesla gives away its patents for free

Tesla’s Patent Wall (before)

Give away patents for free – Tesla positioned themselves as the “good guy

brand” with a cheekily titled blogpost All Our Patent Are Belong To You (a

nod to a video game meme from the 80s).

Tesla’s Patent Wall (after)

3. Good Guy Tesla makes sure that dying man can

have his Model S

Bump dying man up production queue so he can have his Model S. It makes

for a great ‘Connection’ story.

4. CEO does Reddit AMA, has sense of humor

Reddit AMA where Elon answered “What daily habit do you believe has the

largest positive impact on your life?” with “Showering”.

He also shared this video of a cat on a Roomba.

5. New charger prototype is released, instantly gets

parodied

New charger prototype – it’s kind of weird, like something out of a creepy

sci-fi movie.

Somebody reposted the video with Marvin Gaye music, instantly turning it

into something with a ton of innuendo.

The original submission to /r/videos on Reddit got over 15.5k upvotes.

Incidentally, the label “Ad?” is a perfect description of Tesla’s marketing

tactics – so much of it is peripheral and focused on getting maximum word-

of-mouth without literally being conventional advertising.

-----------
Chipotle
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.

Netflix
Netflix arguably has a head-start on word-of-mouth marketing. Its core
product (original programming like House of Cards) offers an enjoyable
and original experience that people naturally want to talk about.
However, Netflix boosts its CX by tapping into user data and sentiment
– and delivering exactly what people want on the back of it.

For example, recognising the phenomenon of ‘binge watching’, Netflix

strategically released all ten episodes of Making a Murderer in one go.
What’s more, it released it on 19th December in the US – a time when
viewers would be well primed to hibernate during the holidays.

Elsewhere, Netflix’s social activity is also designed to increase

awareness about new original programming. It often does this through
user generated content, sharing viewer’s excitement about their
favourite upcoming shows in order to prompt interest in others. This
taps into the notion that people trust their peers more than big brands,
especially when it comes to what to watch.

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McDonald’s
But actually there is no bad game at all. A representative said this
is how McDonald's celebrates International Women's Day March 8
(The W represents Women). Lauren Altmin, a McDonalds
spokesperson, told CNBC: The M will be converted to a W "to
honor women everywhere".

"We have a history of supporting women in the workplace, giving

them opportunities for growth and success." Altmin said. "We are
proud to announce that in the US today, 6 out of 10 store managers
are women."

Not only honoring its Californa store, CNBC said the McDonald's
logo will be altered on the company's social media pages, and at
100 restaurants there will be "gift wrapping, shirts, hats and bags.
specially designed for this day. "
"For the first time in the brand's history, we have flipped our
classic logo back to honor International Women's Day, for their
incredible achievements everywhere, especially women at Our
stores, "a McDonald's representative Wendy Lewwis said. "From
employees to leaders, women play an irreplaceable role at all
levels, along with the brands that make McDonald's success."