How to Kickstart Word-of-Mouth Marketing: A Tactical Guide // Local Marketing Insider #046

[jakehughes]

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It’s easy to agree that word-of-mouth is a powerful marketing channel. Possibly the most powerful for local businesses.

If a trusted friend recommends a business, most people simply end their search.

But, word of mouth as a marketing strategy is tricky.

You can’t just throw money at it and get the results you need. You can’t force your customers to talk you up. They need to be believers.

Put another way, they need to be “word-of-mouth champions.” highly engaged customers that buy often and tell others about your business.

Creating word-of-mouth virality goes beyond having a great product or service. Further, simply reaching as many people as possible likely will not create the desired effect. Scattered WOM champions won’t have as much impact as clusters will.

It’s about reaching the right people in the right areas with a message that they remember, believe in, and cannot help but share with friends.

The basics of a word-of-mouth marketing strategy:

1. Find your highly engaged customers (repeat buyers)
2. Look for areas with a high density of engaged customers
3. Provide those customers with their WOM script

WOM Champions: How to Find Your Best Customers​

The customers that are most likely to recommend your business are not one-time buyers or bargain hunters (ie Groupon).

• Your WOM champions are repeat customers.
• These are the customers that find so much value in what you do that they pay extra for the best you have to offer.
• They’re the Happy Potter fans that splurge on the 20th-anniversary box set editions and buy two more copies to give as holiday gifts.
• They pay for the gym membership, the premium classes, the water bottle, the t-shirt and they pay for the year up-front.
• They’ve bought their last 4 cars at the dealership, set service appointments 2x a year and get the snow tires done.
• They completely believe in the value your business provides.

This concept is echoed by Kevin Kelly’s famous essay 1,000 True Fans. The founding editor of Wired Magazine argues that in order to make a living as a solopreneur, artist, musician, designer, inventor or any related creative pursuit you do not need an audience of millions, you just need 1,000 raving fans.

Fans that will buy anything you produce or sell.

This concept is widely popular because it helps narrow focus and makes supporting your lifestyle with creative or personal pursuits seem more attainable.

How do you find your WOM Champions? Start with your regional sales data, looking for high transaction density, normalized per capita.​

To find these customers, start with your transaction data. Find the highest density areas, filtering per capita to find where your highly engaged customers are.

Once you’ve identified highly engaged customers, look deeper, for regions with clusters of highly engaged customers. Those areas are the most likely to produce more WOM activity.

With your top WOM regions identified, what patterns can you identify? What makes those areas optimal markets - is it the climate, culture, demand conditions?

For example, Ben & Jerry’s discovered that for its ice cream flavor Cherry Garcia, <10% of its stocked grocery stores accounted for over 50% of sales. Meaning efforts made to promote Cherry Garcia was wasteful in 90% of the stores.

Or, if you were to look at aggregate Toyota Tacoma and Subaru Outback sales, Vermont would likely be far down this list since it is such a small state. Normalized for Vermont’s small population, however, you’d likely find a high density of buyers in VT, where Tacomas and Outbacks are extremely popular.

Regional ratings and percentage of 5-star reviews normalized by transaction volume​

To set the stage, ratings are most useful if you manage a business with multiple physical locations, which most of the LMI audience does.

For businesses that primarily sell online, this theory of sentiment analysis does not directly apply. But, if you have review data internally try matching sentiment with transaction records + customer addresses. This research will likely have a similar impact.

For multi-location businesses, stock sentiment ratings across multiple review sites are an easy first step when identifying popular regions.

From there, use 5-star review volume divided by transaction volume for specific stores or areas to identify the best areas/stores for WOM marketing.

4 Ways to Drive Word Of Mouth​

To recap, there are three core parts to driving WOM - right people, right areas, right message.

The right people = highly engaged buyers, which we calculate based on sales density per capita.

The right area = the geos where the most highly engaged buyers cluster.

The final piece is spreading the right message.

This can take many different forms, but in essence, it is the message that your highly engaged customer shares with their friend about your business - a script of sorts.

Here are four ways to craft a script that drives word-of-mouth marketing:

1. Have a unique point of view
2. Help the customer understand how what you’re selling will transform their life
3. Help the customer make money
4. Identify what is surprising

Have a unique point of view​

For a deep dive on formulating a point of view, I’d recommend this article.

For the purposes of this post, I’ll condense it by suggesting you think about this in terms of your WOM champion. What would a happy customer tell a friend about your business?

Your POV is the script your customer will use to promote you.

Vinebox’s slogan is “premium wine by the glass.” The company ships vials of premium wines, easily making for at-home wine tastings.

A Vinebox customer when talking to a friend might say “it’s premium wine by the glass. You order a box, they send you a bunch of vials of different wines and you can do a wine tasting at home. If you like any you can order full bottles.”

The customer is just repeating a version of the marketing messaging. But, the key is that Vinebox’s POV is unique. It is not just a better wine distributor. By eliminating the fundamental concept of selling wine by the bottle, 99% of all wine distributors can no longer compete with it. It’s in a class of its own.

We position Widewail’s Engage product as “people-powered review response.” We’re not trying to use technology to replace people. This POV resonates with our clients. Responding to reviews is an extension of customer service, and requires a level of nuance that is best supported by a human team.

Help your customer understand how your product/service will change their life​

Explain to the customer how their life will look after using your product/service. How would the world look if everyone used your product/service? Educate them on your mission, show them that they have a need and help them toward a solution.

When your customers identify similar needs in their peers’ lives, they’re likely to recommend your business if your solution worked for them.

Help your customer make money​

While this advice does not apply to all businesses, it's good food for thought. If your customers are making money, they are going to spread the word.

Apartment hosts on Airbnb. Drivers on Uber. Writers on Substack. Artists on Etsy. YouTubers on YouTube.

Long live the #sidehustle.

If your customer's success can be attributed to your product/service, that is a direct signal of your value to onlookers.

Figure out what is surprising​

The line “wanna hear something weird” really cuts through the noise.

Help your customers realize the benefit(s) of your product or service are vastly different from what they thought was possible.

You can jump-start this process by asking customers to leave a review and to share what they found surprising about the experience. Reviews can be thought of as WOM at scale.

Collect enough of these reviews and you’ll notice trends, and these trends can be worked into your POV and messaging.

A good example of this is my recent experience updating my home to solar power. I had always assumed adding solar panels was a “maybe someday” sort of situation. Not feasible in the short term with young kids, etc.

I was surprised to find it's possible to do it with no money down. We’re still connected to the grid so it’s as if nothing really changed except my energy bill went down. And there’s a fun app that shows my monthly energy production.

Unsurprisingly, I’ve told a lot of my friends about it.

Lately, as I walk around our neighborhood, I notice houses with solar panels popping up all over the place, which gets me to the bonus tip.

Bonus: create the perception that everyone is buying​

This is a less robust way to drive word of mouth because it is not based on advocates, but the perception of popularity is still a powerful tool.

Think of the bar with a line outside. Or the business with way more reviews than the other businesses on the block.

You just assume they’re good because everyone else is doing it. It’s a bandwagon effect.

Key Takeaways​

To strategically drive word-of-mouth, find your WOM Champions (highly engaged repeat buyers), normalized on a per capita basis, in areas with a high density of other WOM Champions.
Then, provide those customers with their WOM script.
Here are four ways to craft a script that drives word-of-mouth marketing:

1. Have a unique point of view
2. Help the customer understand how this thing will transform their life
3. Help the customer make money
4. Identify what is surprising

WOM is a classic “marketing soft science,” making it hard to pull off but, in many cases, it’s a key competitive advantage for businesses. I hope this article helps provide some structure to your thinking and direction on your strategy.

The credit for many of the key ideas in this article goes to the newsletter Category Pirates, which I highly recommend to help expand your thinking around positioning. It’s a keeper.

- Jake @Widewail

Check out Widewail's new reputation management video library.