Ecommerce Marketing / Social Proof

Word of Mouth Marketing: How to Create a Strategy for Social Media Buzz & Skyrocket Referral Sales

Matt Warren / 14 min read

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.”

Proof is in the Success

I’ve seen ecommerce brands blow up by developing a Facebook Group, having YouTube influencers talk about them, and by getting on podcasts. And while this all happens online, this is still WOM advertising.

– Eric Carlson, Co-Founder, 10x Factory 

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.

WOM is Here to Stay

Word of mouth will never go out of style. It is, and will remain, the #1 way people make choices about brands.

– Jamie Turner, Author, Speaker, and CEO of the 60 Second Marketer 

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:

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 

1. Sell quality products.

It’s impossible to create a positive experience if what you sell just isn’t up to scratch.

Your business will fast become more about managing returns than anything else.

So being able to source and sell quality products is crucial.

Take a look at the negativity caused in this TripAdvisor review:

The restaurant obviously spent a lot of time working on their logo design and how they looked to new customers.

Yet their product (the food) and overall experience for the customer was totally lacking.

A poor review and a customer likely to spread plenty of negative word of mouth.

Create Good Products to Get Good Profit

Word of mouth is possibly more important than ever.

Creating a great and personal experience around a high quality product can lead to all sorts of virality – online and offline.

The reverse is true as well.

If you treat customers poorly or sell lousy products, people will know and tell other to stay away. And because of social media, they can influence not only their friends but also friends of friends and beyond. 

– Josh Mendelsohn, VP, Privy

2. Seamless order process and site UX.

According to justuno, 93% of consumers consider visual appearance to be the key deciding factor in a purchasing decision.

And a Forrester report claims better UX design could increase conversion rates by up to 400%.

Bottom line:

You need to make your ecommerce site and ordering process – across all devices – slick and simple to use or people will just give up (and certainly won’t come back).

A great example of this is the Carolina Panthers online shop.

They used BigCommerce to redesign their site to look amazing and be easy-to-use across all devices:

Take a look at some of the reviews after the change:

And the numbers don’t lie either – with the Panthers’ store seeing a:

  • 83% increase in mobile conversions
  • 37% increase in overall conversions
  • 16% decline in bounce rate.

3. Run a tight operation.

A recent PCA Predict report claims that 49% of consumers would shop online more if they felt more confident about delivery and 57% are reluctant to use a retailer again if delivery is late.

So running a tight operation after a sale’s been made is crucial.

It’s hard to provide that positive, referrable experience while carrying around a reputation for backorders and order mishaps.

This means having bulletproof processes in place to perfectly control your inventory without overselling and a seamless fulfillment system to ensure on-time deliveries.

While also being super speedy in responding to and resolving any mishaps that do occur.

4. Go above and beyond for the customer.

Of course, there’s no one way of doing this.

Every customer interaction is different – but should be treated as an opportunity to impress.

It’s about being in the mindset of striving for excellence in every situation and always putting the customer first.

Zappos are the absolute masters of this. In fact, their CEO Tony Hsieh has regularly described them as a “service company who happen to sell shoes”.

The internet is filled with a multitude of what can be seen as small, yet powerful stories about how Zappos creates wow experiences for customers every single day.

They’ve even started turning them into cool promotional videos:

Ideas For Building Your Word of Mouth Marketing Strategy

Creating an epic experience for customers is sometimes enough to get some of them shouting about you and referring others.

But really making the best word of mouth marketing campaign strategy requires greater thought.

You need to move away from hoping people tell their friends about you. And towards specific strategies that actively encourage people to refer.

Let’s take a look at some ideas to help you build you WOMM strategy:

WOM works for all verticals

One of the big shifts around the concept of word of mouth is that people are spreading products in a different way.

It’s no longer through their voice and is instead happening through their fingertips. Whether it’s a viral product like the Star Wars shower heads getting thousands of shares on Facebook or a new SaaS service getting thousands of upvotes on Product Hunt; the concept of word of mouth is the same but the channel is different. 

– Ross Simmonds, Digital Strategist, Foundation Marketing

1. Set up word of mouth triggers.

A word of mouth trigger is your ‘x factor’.

The thing that makes your business stand out from any other in your industry or space.

This means giving your customers something memorable. An experience, thought or feeling they can’t get anywhere else.

And they’re left being almost forced (in a good way) to talk about you to others.

The Hustle, for instance, sends an ambassador promotion email anywhere from 2 weeks to a couple months after someone joins (they continue to test timing for effectiveness). Here’s the email they send:

Of their nearly 600,000 subscribers (as of writing), this email has earned them more than 4,000 ambassadors, each of whom recommends upward of 25 people to The Hustle. 

2. Use visual triggers.

Disney does an amazing job of this with their theme parks.

They create a stunning visual experience that people just want to take photos of and share with other people.

But this can be a little trickier to create when it comes to ecommerce.

You could create a website so stunning and unique that people just have to share it. But navigation, ease-of-use and conversions should always be your first point of call.

IKEA is a great example of a brand using a visual trigger to create word of mouth.

They were among some of the first retailers to embrace Augmented Reality in a big way and created a huge online buzz when launching their AR app:

This video has 1.4 million views on YouTube and was shared across copious other channels because people were visually amazed.

3. Do or create something unique.

Creating something totally different and out of the box is another way to trigger people into spreading the word about your business.

But that doesn’t mean you need to totally reinvent the wheel.

It could be that you market your business in a way that’s totally different to anyone else in your space. Or that you take an old product and sell it in a completely new way.

Dollar Shave Club is a fantastic example of both of these ideas.

Not only did they take an old product (a shaving razor) and sell it in a new way (via subscription to monthly grooming packages). But they also marketed themselves using self-deprecating humour in an industry that’s mostly known for producing serious commercials of men with chiseled good looks.

In fact, they gained 12,000 customers within 48 hours of this initial YouTube video going live in 2012 (and it now has over 25 million views):

4. Emotional provocation.

Tapping into people’s emotions can be very powerful for generating shares and getting people to talk about your business.

This can be done via taking something you believe in and tying your company brand closely to it on social media, your website and anywhere you can.

For example:

Android believe in their slogan “Be Together. Not the Same”. And their ‘Friends Furever’ video went on to become the most shared ad of all time by simply encapsulating this concept.

BigCommerce retailer Ben & Jerry’s also does this really well by attaching themselves to a cause they hugely believe in – environmentalism:

5. Encourage user generated content.

Content generated by your users, customers and followers can be much more powerful, engaging and shareable than run of the mill company updates and photos.

In fact:

According to an Adweek infographic, 85% of users find visual UGC more influential than brand photos or videos.

Meaning engaging your follower base in a two-way conversation can encourage them to start shouting about your business on social media – effectively endorsing and referring you to their friends and followers.

Offering discounts for posts that meet certain criteria is one way to encourage this. Or running an ongoing social media competition on your own hashtag is another.

BigCommerce retailer Jeni’s Splendid Ice Creams does this fantastically well.

They have stores all across America and get customers to Instagram themselves enjoying their ice cream while using a special hashtag for the store they’re at:

And even go a step further by creating community sections for each store on their website – filled with social proof of people loving their ice cream:

6. Push ratings and reviews hard.

Not every person is going to refer dozens of friends and family.

But that doesn’t mean they didn’t love their experience. And certainly doesn’t mean you can’t use their feedback to convince others to buy.

According to BrightLocal’s 2017 Customer Review Survey:

  • Consumers read an average of seven reviews before trusting a business – up from six the previous year.
  • 85% of consumers trust online reviews as much as personal recommendations
  • 49% of consumers need at least a four-star rating before they choose to use a business.

So feedback and word of mouth from your current customers is crucial.

That means collecting and prominently displaying honest reviews of your service and products in as many places as possible – marketplaces, websites, in-store, social media posts and anywhere else you can think of.

If someone is willing to shout about your business, make sure everyone knows about it.

Alcoholic drinks retailer BeerCartel do this brilliantly on their BigCommerce store by prominently displaying product ratings in the top left and a reviews tab on the right:

With the tab on the right causing a pop up box filled with reviews to appear as an overlay:

And they also do a great job collecting reviews on social media too:

Use Reviews to Their Full Social Power

Reviews are the modern word of mouth. Consumers are reading reviews and they’re asking for advice on social networks. Word of mouth is more important and bigger than ever before.

– Stephen Slater, Sr. SEO and Digital Advertising Manager, TopRank Marketing

7. Create an official referral program.

A referral program isn’t going to trump a bad experience for your customers.

But offering systematic referral rewards is a great way to nudge happy customers into actually taking that step and introducing others to your business.

In fact:

Texas Tech research has indicated that 83% of satisfied customers are willing to refer a product or service but only 29% actually do.

So gently pushing customers towards taking action on referrals could be a game changer.

Rewards could be anything from:

  • Discount off next/first order.
  • $X gift card for referring a certain number of people.
  • Straight up paying people for referrals.
  • Bonus gifts with next order for referring people.

Outdoor apparel retailer The Clymb does an awesome job with their referral programme, clearly highlighting it in their website header:

The reward itself is then clearly explained at the top of a dedicated page:

And they then make it super easy to share via email and social media. Even providing a pre-populated message and potential earnings according to number of email addresses entered:

8. Know Your Customer LTV.

A key caveat to mention here though is that you need to know your customer numbers and metrics – especially average lifetime value.

There’s no point giving a reward of, say, $50 if your average customer only has a lifetime value of $25. You’re just throwing away money.

This is why reward programs lend themselves particularly well to subscription services or businesses that see high customer retention.

But knowing your numbers means you know how much you can afford to spend as a reward.

For example:

In their early days, PayPal literally paid people just for getting someone else to open an account ($10 to each the referrer and new customer).

Not something most brands can do. But PayPal knew their numbers and created 7-10% daily growth in user base with it selling for $1.5 billion a few years later.

Today, PayPal continues to lead the payments industry charge. They even sell their point-of-sale system to ecommerce brands in the exact same way ecommerce brands sell to their own customers.

The Most Important Metric

Word of mouth is arguably the most important marketing tactic of any business.

If you set up an ad that acquires a customer for $10 – that’s good. Assuming that’s profitable for you based on your CoGs, etc. – keep scaling your ads.

But if you can get 1 person to talk about your brand with 10 of their friends and 5 of them buy. And you repeat that for every customer that comes into your store – you’ll get so many sales you won’t be able to keep up with inventory and shipping.

– William Harris, Ecommerce Marketing Expert, Elumynt 

Spark WOM among influencers

Some people have a strong social media and online following. And hold a lot of sway with their recommendations.

In fact:

Research from Twitter and Annalect claims 49% of people say they rely on recommendations from influencers when making purchase decisions.

So getting your brand or products reviewed and talked about by relevant influencers in your industry can be a fantastic word of mouth strategy.

Some influencers you can outright pay to promote a product. But there are other ways too.

Activate Social Influencers

Word of mouth marketing is often rooted in great campaigns through social influencers. It’s important for brands to think about how to incorporate and experiment with this.

– David Feng, Co-Founder, Re:amaze 

1. Send products for free.

Once you’ve identified relevant influencers, simply sending them one or some of your products for free can get them talking about it online.

Be careful not to expect or demand anything just because you’ve sent free product. Some of these influencers will get a lot of free stuff and they might not want to review it all.

Minimalistic watch retailer Daniel Wellington used this strategy almost solely to build their online business.

They simple sent one of their watches to selected Instagram influencers along with a unique discount code to include in any posts:

This strategy helped Daniel Wellington climb to almost 4 million followers on Instagram with over 1.6 million posts in the #danielwellington hashtag.

2. Connect with a worthy cause.

Following on from one of the above WOM triggers suggestions – influencers and celebrities are always wanting to show their support for causes they believe in.

Meaning you can gain serious word of mouth exposure while supporting something cool too.

Sun Bum sells sunscreen – without any of the typical bad stuff in it. They also make and sell sunscreen specifically for children’s skin. But that isn’t all.

Sun Bum partners with schools across the U.S. to bring in professional (and famous!) surfers from around the world to teach kids about the importance of sun protection.

Support for the project in the surfing community is huge. But it’s also something that many celebrities and key influencers are more than happy to promote and post about – plugging Sun Bum in the process.

3. Solve a real challenge (yes, even influencers have them!).

Online app brand Vivino is beloved by wine novices and sommeliers alike around the world, but in the NBA –– their share of influencers is far and wide.

“Shoutout to my Vivino app,” says Warriors point guard Stephen Curry. As Kevin Love, the 5 time basketball All-Star and NBA Championship winner, says, “It’s like Netflix for wine.”

For Blazers guard CJ McCollum? “It’s life-changing.”

WOMM Executive Summary

Word of mouth advertising and marketing can be a monumentally strong player in growing your ecommerce business.

But it’s imperative to start with the fundamentals.

It doesn’t matter how many marketing consultants you hire, amazing ecommerce conferences you attend or new age growth hacks you try. If you can’t provide a quality experience for customers and run a tight operation then you’ll fall short somewhere along the way.

Get this right first and then use the strategies in this post to keep multiplying your happy customer base over and over.

Want more insights like this?

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