We talk about word-of-mouth marketing a lot here at Referral Rock. In fact, it’s one of the main reasons behind our business. So we thought it was time to expand our knowledge a little more.
If you poke around the web, you’ll find a ton of studies and articles written about word-of-mouth marketing. A lot of what’s been said has been said ad nauseam. It seems like everyone is quoting the same articles and studies.
The push of this information could be because it’s true, the value of word of mouth is huge. It plays a big role in a lot of marketing tactics because it works. But we wanted to see if we could find out anything new, as well as get the opinions and first-hand experience from other marketers.
So we sent out a survey to see what other marketers thought about word of mouth. We wanted to find out how they get word of mouth to occur, how they track it, and how effective it is for them in bringing in leads. And this was the most successful survey we’ve had so far – a staggering 107 experts shared their insights!
(We divided the roundup into two parts, so be sure to read part two for all of the word-of-mouth advice.)
Let’s get straight to the survey and learn how the pros measure their word of mouth.
How experts measure word of mouth?
Before we dive into the ways marketers typically measure, remember that some responses are a simple guess and may be more generalized. With that being said, there are a variety of ways word of mouth can be measured, like some of our data-driven word-of-mouth examples. In this survey, we provided three of the most common options to choose from. Respondents had to choose between ask customers, track digitally, and just guess. So, how to measure word-of-mouth marketing?
63% of marketers track their word-of-mouth referrals by simply asking how they found out about their business.
Tracking digitally came in a solid second, as 31% of our experts said they track digitally. Only 6% said they just guess.
Use the right tools for tracking your word of mouth
There are many tools out there, that help make tracking a little more efficient. The trick is finding the right tool for your business. Whether that means using an in-depth CRM or using referral software to track your word of mouth.
“Word-of-mouth referrals tend to be hard to track because most CRMs don’t make it easy to track referrals, let alone referral revenue.” Says Reuben Swartz from Mimiran.
“I got irritated with that, since word of mouth is so important for me and many of my clients, so I built it into the Mimiran CRM – each lead has a referrer field, so it’s easy to track who made the introduction, and the system automatically tracks revenue from referral sources, so you can see at a glance who is really helping you grow your business.”
Why is word of mouth difficult to track?
Tracking word of mouth can be confusing, especially depending on the way your team chooses to track.
“The problem with tracking word-of-mouth referrals is that all measurements are self-reported.” Josh Williams of JW Digital Group mentions. “If a lead forgets to mention the referral, or if the referral was second hand (e.g., existing client refers someone who then hands it off to a colleague) you may never realize the true source of the lead.”
Tracking word of mouth also depends on the type of business and marketing being done. Josh further explains, “This is less of an issue for companies who don’t do a lot of heavy marketing or advertising. Small companies like contractors or bakers or the like may rely solely on word of mouth because they always have a queue of customers waiting. They’ll still run into the issue of not knowing exactly who was responsible for the referral, though”.
A lack of tracking can also be to blame
Haj Carr founder of Trueline says that “Word-of-mouth marketing is notoriously hard to track because most businesses do not bother aggressively tracking.”
But he offers a simple solution: “If you force all prospects to disclose where they heard about your business and or services you will get a better feel for where your leads come from.”
Tracking doesn’t have to be difficult. In fact, as Haj mentions, “to really get the most out of word-of-mouth marketing you must train your sales reps to also ask ‘How did you hear about us?’ and be sure to log that information so you have the valuable analytics you need to evaluate word-of-mouth marketing campaigns.”
By simply asking where the lead came from, you can track your word of mouth.
Difficulties may be due to incorrect measurements
“Word-of-mouth marketing is hard to track because of the nature of the channel,” says Steve Kurniawan from Nine Peaks Media.
“Think of it this way: To measure anything, we have to use a measurement device, usually in a close proximity to the object. To measure the length of a table, we place a ruler on the table, to measure click-through-rate, we put a programming code on the channel, and so on.”
He says that “We can’t measure word of mouth directly, and we have to indirectly measure it. For example, you can monitor conversations on social media channels, you can analyze search queries used by your audience. Arguably, however, the best way to measure this is to run a survey or interview asking customers where they heard about you.”
Even though it seems word of mouth can be difficult to track, the results point out that it’s well worth it. As you’ll see it produces high quality and fast closing leads.
How many leads come from word of mouth?
When we look at all 107 marketers combined, we found that just under half of all respondents believe 20–40% of their referrals come from word-of-mouth marketing.
We wanted to take a deeper look at these findings. Do B2B and B2C businesses feel the same about word of mouth. Or does one type find word of mouth to be less or more rewarding? For this survey, we had 57 B2B respondents and 48 B2C respondents. Here’s what we found.
Comparison of B2B vs B2C marketer’s responses on what percent of leads they get from word of mouth.
As you can see, B2C respondents felt that they receive fewer leads from word of mouth. Over two-thirds of B2C marketers believe they get 40% or less of their leads from word of mouth. Whereas, nearly half of the B2B marketers believed 40% or more of their leads come from word of mouth.
Lead quality from word-of-mouth marketing
Our survey asked three questions based on a five-point scale system, with five being the highest. We rated likelihood of closing, time to close and lead quality. As you can see the averages from each rating scale favor word of mouth referrals.
Averages from our word of mouth five-point scale questions
We averaged all the responses and found that the leads closing rate, closing speed, and quality are all rated well on a five-point scale. The average rating for the likeliness of a word-of-mouth referral to close was 3.98. The average rated closing speed of a wom lead was 3.85. Most surprisingly, the average for the quality of this type of customer was 4.18 on the 5 point scale.
We are happy that our findings further support other studies. As one Nielsen study showed, referrals are influential and make for a great form of advertising.
Best ways to promote word of mouth
The last piece of information we asked related to word-of-mouth promotion methods. Respondents answered the question, “What ways do you try to promote word of mouth referrals?”
They were given the following multiple choice options:
- Exceptional service
- Exceptional product
- Reputation management (reviews)
- Customer referral program / refer a friend
- Influencer marketing
43 out of 53 marketers believe the best way to promote word-of-mouth referrals is by offering exceptional service.
We found that influencer marketing was the least used method among marketers. We also found that referral programs and partnerships/affiliates were a solid tie, as both were chosen by 43% of respondents even though both of these types of program rely heavily on word of mouth to occur.
Promotion methods by marketers for referrals
What we found to be most interesting is that 81% said that exceptional service was their method for promoting of mouth to happen. 60% rely on reviews and reputation management. Meanwhile, only 51% of marketers said an exceptional product was a great promotion method.
Clearly, customer service really does play a vital role in word-of-mouth marketing. And it further backs up the various studies on customer service, that state people want the whole experience, not just a good product. Zendesk, for example, found that customers switch brands or services because a competitor offers better customer support.
15 tips from word-of-mouth experts
Our experts gave us a ton of advice. We have broken it down into 15 subcategories to help you digest it easily.
- Create a process for referrals to happen from the start
- Take action: It’s as simple as asking
- Don’t forget to follow up
- Hire help to grow your word of mouth
- Scoring referrals after a good transaction
- Work on your customer relationships
- Use your user-generated content to help grow your word of mouth
- Use networking to fuel word of mouth
- Offer something a little unique, and use your differences to get ahead
- Use customer reviews and platforms to get people talking
- Be the answer to a problem
- Try a rewards program to get people talking
- Make the process easy
- Make your customers happy
- Think about opportunities outside of your existing clients
1. Create a process for referrals to happen from the start
Joel Lee from Trumpia explains that you have to establish a great company for word of mouth to happen. “Your company is not going to be talked about if it is not popular in its field. Creating a successful online marketing strategy is also key in people being exposed to your brand, which can then lead them to talk about it with their peers. From here, word of mouth becomes a domino effect.”
“Advise your new clients from the start about your referral program,” explains Alistair Dodds from Smoking Chili Media. “By conditioning them from the start of your relationship of the referral deals you offer, you are giving them food for thought as to the businesses they can potentially introduce you to in return for a retainer discount deal or bonus work you are willing to do.”
But don’t just rely on your incentives
The incentive isn’t the only driving factor in getting referrals, however. You can actually get them by providing great service too.
“It’s certainly helpful to have a great business and to provide quality service. This is key,” explains Sarah Charrouf from Bowery Creative. “The customer needs to feel as though they’re important, and they’re receiving the best service or product from someone that they trust.”
She then explains how a reward isn’t always necessary. “It’s not always necessary to provide referral incentives, for example, if you’re a dentist looking for more patients – if your work is good, honest, and prices are fair, you’ll be referred naturally in conversation, however, for products or bigger businesses, providing an incentive to customers who refer their friends and family will help the business grow.”
Morning Score’s Marina Dolcic says “We start off with exceptional customer service and communication. The more interaction (and positive interaction at that) you have with your customers, the more engaged they will become with your brand, service or product. This will, in turn, create a loyal customer that will help you in your WOM campaigns.”
She also mentions that you need to take charge of all opportunities. “Make sure you use every opportunity to communicate with your customer” and to “Offer help and be honest when dealing with complaints. This is extremely important for your potential customers.”
Marina states that “Anyone can receive (or even fake) positive reviews. What potential customers are concerned with is how you solve problems.”
Be the best in your business so that people want to use you
Laura Simis from CoalMarch states “The most important focus area for us is offering the best services possible. We want to be so good, people can’t afford not to let us help them.”
She brings up a good point that this is especially true when there are a ton of options like yours. “Having happy clients who see the value in what we bring to the table naturally lends itself to spreading the word”.
Pawan Kiraula from Digital Acharya, says “There are numerous effective ways that you can employ to get more word-of-mouth referrals.”
Pawan mentions “One of the simplest ways is to provide the best services and experiences to your customers. If your customers are happy with your services, then they will be tempted to share good word of mouth about your services naturally.”
Condition word of mouth by providing great service
Nellie Akalp from Corpnet mentions, “A great way to increase your word-of-mouth referrals is to give the best possible customer service you can.” She mentions that going above and beyond sets you apart, “When you go above and beyond for your clients as we do, it helps set you apart from your competitors who may cut corners.”
Her final advice is to remember that customers will know if you cut corners, “So remember when you want to cut a corner by outsourcing, it may hurt you in the long run. Try to keep your service hands-on from your core team to impress clients and bring in those word-of-mouth referrals.”
Siddharth Sharma of Clever Tap believes in two things when it comes to word of mouth. “Assuming one has the following foundations:
1. Provide a great product: Without this, word of mouth will fail.
2. Exceptional service: No one remembers a transactional service. They remember whether your customer service was great or bad.”
“As unmeasurable as it sounds, word of mouth still becomes a huge force for a lot of businesses.”
2. Take action: It’s as simple as asking
“The most effective way of getting more word-of-mouth referrals is simple – ask for them,” says Elijah Masek-Kelly from Powerful Outreach.
Elijah explains “Clients don’t always think about making referrals, so if you make an effort to mention it and emphasize the value of a referral when speaking with clients, it can go a long way in reminding clients that the best way to pay someone back for exceptional service is to recommend that company to their network.”
Wise Team’s Zygimantas Jacikevicius says, “If you are a small business the best way to get word-of-mouth referrals is to provide great service and stay in touch with your current clients.” He mentions that you can simply “ask around if they could recommend your product or service to other businesses they know.”
Asking your happy customers can lead to more referrals
“Ask happy customers if they know of anyone else who would like your service,” mentions Stacy Caprio from Accelerated Growth Marketing. She explains, “I have found having a clear value proposition that you talk about with everyone who asks what you do can lead to word-of-mouth leads from non-customers and customers alike”. If you’re wondering how she gets creates happy customers to refer, she says “Customers are most likely to refer you when you get them great results.”