Why word of mouth still wins when marketing your business

In a vast world of marketing options such as social ads, SEO, print and influencer partnerships, there is one marketing channel that's always stood the test of time and not showing any signs of going away - 'word of mouth' referrals.

Yes an omnichannel approach is used by many entrepreneurs to attract new customers, and this is wise as it's never a good idea to rely purely on one channel...

However, word of mouth referrals are so impactful because they cut away a lot of the doubt or uncertainty in a customers mind about your business.

If a referral comes from a friend or someone you trust (whether for a product, service, restaurant etc) then you instantly feel a sense of verification and may consider giving it a shot.

Yes, referrals can be subjective, but on the whole they deliver a much better hit-rate and experience than just seeing an online ad, reading a blog or even worse, trusting someone who is being paid to flog you something.

So join us today as we do a deep dive into why, what and how to make a success of referrals, so as they can turbocharge your business growth and give you a solid bank of regular customers, who in-turn may start to refer their own network to your business or subscription service.

Why word of mouth referrals win

As mentioned above, the strongest way to grow your community is through word of mouth & referrals, specifically by creating your own referral program.

Time and time again research has shown that customers referred by others (their friends, family, even trusted influencers, etc)... are more likely to convert and have a higher lifetime value than customers who find you through more traditional forms of advertising.

So tap into that network of yours!

Unfortunately, it's not as easy as sitting around and waiting for those conversations to happen organically. It takes work to get your name and message out there. According to data from Texas Tech University, 83% of satisfied customers are willing to refer products/services but only 29% actually do.

So you've got to close the gap. You've got to keep bringing value to your subscribers, and you'll have to remind them to refer you to their network.

What is word-of-mouth marketing & why it works

Word-of-mouth marketing is exactly what it sounds like. Having subscribers love your offering so much that they can't help but rave about it to their friends, family, coworkers, and just about anyone else.

Word-of-mouth naturally happens when we're excited about something. It can be done online or off, and is the most meaningful driver of growth.

There are two main reasons why word of mouth is such a powerful growth tool for your subscription business.

#1 We are more likely to trust recommendations coming from friends way more than we trust ads.

#2 It's better targeting. Think about it. A friend is likely to tell you about something they KNOW you'll enjoy. So the journey to conversion is much more straightforward.

You've likely unknowingly done word of mouth marketing yourself. Ever recommended an up-and-coming restaurant to a friend or given a new helpful app a 5-star review?

You probably didn't even realize you were marketing (for free!) for a company. You just felt the need to share because, in your eyes, it would improve someone's life to know about a new place or product they'd enjoy. That's what happens when we find something great. And that's what will happen when you win over the hearts and minds of your subscribers.

Even though most word-of-mouth marketing is done completely free-of-charge, a small incentive can go a long way.

Referral programs can spark word-of-mouth recommendations by encouraging satisfied subscribers or customers to share your business with their peers. You get a new subscriber or customer, they (both referrer and the referred) get a discount. Everyone wins.

How to get more referrals

If you're looking for referrals from your existing community and network of customers then be bold, but also don't get obsessive over it. Be natural and let people know they can refer you customers, without ramming it down their throats.

Pick and choose where, when, and how you want to talk about it. In the end, you know your people best. You know if they follow you on social media, read your content, enjoy chatting for 5 minutes after each session. Consider all these things and read below our suggestions on how to start getting those referrals.

Where to talk about your referral program

During your live events or customer catch-ups - You can and should mention your referral plan in real-time, when you're in contact with your subscribers and customers.

Every couple of weeks, at the intro or outro of a session, remind your subscribers of the benefits they'll get once they bring in referrals. Don't mention it in every interaction, and don't mention it in the middle of your session unless someone brings it up.

Email - For non-marketing emails, meaning emails that aren't trying to sell a product, you might want to add a referral program inclusion on the email footer or in the main content. As long as the rest of your email is bringing value to your subscribers, there's no problem in being repetitive about referrals.

Website - If you use your own website then you should definitely link to a referral program. Link to a referral landing page, or a blog post with the referral plan inclusion, or even better, make a big banner so that it catches any visitor's attention.

Now that you've dipped your toes in, you can start getting bolder by addressing your entire community more directly.

• Social posts -  Post about your referral program on your social media accounts. This is evergreen content, so you can think up new ways to talk about the referral program continuously. Pair it with some of the ideas above such as the limited-time offer, or reinvestment you want to make into your business.
• Sharable content - To make the most out of having the referral program inclusion featured in your post, make sure your content is sharable. It makes sense to have gated content that only your subscribers and customers can access, but think about how you'll reach many more people by offering some content for free. Find a balance between both.
• Dedicated email  - You can also send a dedicated email to your subscribers about the referral program. No need to beat around the bush, just ask in a personable way. Make sure you keep the tone of the email true to your relationship with your subscribers so that it doesn't come across as too salesy.

How to tap into your community

As mentioned earlier, the best way to get referrals is from your immediate network.

• Friends & Family - Start with the people you know well. Chances are you've got some subscribers and customers that are friends and family you can rely on.
  
  Tell them you're looking to grow your business and have a personal goal of getting X new subscribers this month.
  
  Ask if they can help you get there and tell them about the referral benefits they'll get in return. You can even make this into a playful competition within a group of friends. Who's able to get the most referrals?!
• Superfans - Identify the subscribers that seem most engaged with your offering.
  
  They never miss a session, regularly read your emails, and always seem excited to see you. Those are your superfans and they can be the ones powering your growth.
  
  You don't have to convince them of how awesome your business is, they already know. Check in to see if they have peers who would be interested in your offering. Be direct about the value they would get with each referral.
• User-generated content - Stay connected to your customers through social media. You might find there are some that are natural marketers in your community. They share content when they're out and about and seem to enjoy creating free content for others.
  
  Ask them if they'd like to use their talent to share the referral program with their audience on their next social post.
  
  Remember UGC works on all social media platforms or blog content, so watch out for bloggers too!
• Ask for reviews - Don't forget that reviews are also a kind of word-of-mouth marketing. Ask your loyal community about why they love you and include that wherever possible.

More Ideas to promote your referral program

If you find that just sharing your referral program with your audience doesn't get you the results you're looking for, then it's time to implement these creative ideas to boost the interest in your referrals.

• Limited-time offer - Create a limited-time offer for referrals and referred neither party can resist. For example, "Refer anyone this month, and both you and them will get 50% for the next 3 months. Offer ends on the 30th." That'll get people sharing asap. You can tie this into themes and holidays, like Christmas or Mother's day.
• More rewards - Feel like offering credit is not the best way to express gratitude to your referrers? You can reward them in other ways too! Send them a free gift, whether it be a content piece, product, or activity. This can be part of your pitch. "Get 15% for 1 month AND a free meditation!"
  
  The more referrals, the better the gift.
• Raffle - Along with more rewards, to make the additional reward more interesting you could even incorporate a raffle into it so that referrers are entered into a raffle with a superb prize. That might mean one high-ticket item for you, but lots of referrals will pay it off.
  
  The better you know your target audience, the better you can motivate them with the right reward.
• Share your Why - To make your ask even more powerful, you can give them a snippet of why you want to grow your business. Where you want to take it. "If I got 10 more subscribers I'd be able to invest in a better microphone." "With 20 more subscribers, I'd be able to get more training."
  
  You should always be honest, of course. And this will only be impactful if your goals are aligned with reinvesting in your business so that it's an even great success for you and your community.

When should you ask for a referral?

Sooner rather than later - The best time to ask for referrals is when customers are still new and extra enthusiastic about your offering. Of course, they'll stay with you for a long time, but nothing beats the excitement of novelty. So make sure to mention your referral program within that first month.

After they're reminded of your value - Don't worry, after the novelty has worn off you'll still have people excited about you. This is especially true right after you have an interaction with them be it at the end of an activity or content release. That's when they are reminded of your value, which makes those excellent times to ask for referrals.

Friendly reminders - Don't be afraid to repeat yourself. Don't be afraid to repeat yourself. Don't be afraid to repeat yourself. You get it. Whether it's with your super-fans or friends and family, chances are that after you've told them about the referral program once, twice, thrice and still, they've forgotten. Tell them again.

Tracking success

Before making any assumptions like, "my subscribers aren't interested in discounts...they don't bring in any referrals," you've got to give it time.

Word-of-mouth marketing can take many mentions, both by you and the referrer until someone's ready to actually try your service. That's why we suggest using the free trial feature — it removes all friction from the "getting to know you" phase. Don't be discouraged if your referral program takes awhile to catch on.

While it's hard to know what tactics will work because lots of word-of-mouth conversations happen behind closed doors or can't singlehandedly be tracked by you, it is important to try to gather as much data as possible about how you are acquiring new referrals.

Always ask new customers how they heard about you. You can ask them directly or include this question on the first survey you send them.

If your community creates content about you, especially when sharing a referral link publicly, watch what they say and if that messaging gets you new subscribers.

On top of that, try to observe the impact of your marketing initiatives. For example, if after sending a dedicated email about referrals you notice that 5 people tagged you on social media posts with referral links, then that's great work that should be done over and over again!

Just being you will sell your offering, but referrals will take it to the next level

We hope you've enjoyed our referrals and word-of-mouth run-through. Good luck using all of the above and we look forward to hearing about how you get on!

Until next time...keep winning

Jonny Quirk

If you like what you've read here, have your own success story, or want to join the conversation around entrepreneurship then hit me up on Twitter or check out our YouTube channel - I'm always around!

Feel inspired to start, run or grow your own business? Check out subkit.com and learn how you can turn "one day" into day one.