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Why Word of Mouth is So Important for Growing Your Business

If you're making your customers' lives better, they’ll recommend it to their friends... simple as that!
Andrew Deen has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He implements lean methodology and currently writing a book about scaling up business. Twitter @AndrewDeen14
Andrew Deen has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He implements lean methodology and currently writing a book about scaling up business. Twitter @AndrewDeen14

Via Carl Nenzén Lovén

We live in a world of marketing buzzwords, tactics and tools for getting your product out to the right people—your customers. Of course, all of this is important for growing your business, and no one should neglect putting together a formal marketing plan. However, one of the most powerful tools in your marketing and branding arsenal is word of mouth. Word of mouth is the original marketing tool, and it’s still one of the best ways to gain loyal customers. If your customers’ lives are made better by your product, they’ll recommend it to their friends. It’s as simple as that! But why is word of mouth so important for growing your business?

Potential Customers Trust Existing Customers

When you’re marketing to a potential customer, they don’t know you. They don’t know your business. They don’t know if they should trust the claims you make about your product or service. But they do trust their friends, and if their friends are happy with your products, there’s a good chance they will give your business a try. According to Nielsen, 92% of consumers trust recommendations over advertising, and it’s not hard to see why: we trust our friends and family to only recommend what they think we would like.

Word of Mouth Includes a Built-In Review

Word of mouth doesn’t just spread the word about your company: it also offers a built-in review for your product. Remember, your potential customers trust their friends over your Facebook ads, and they’re offering you free, trusted advertising, along with a customized endorsement for your business. They’re in essence reviewing your company and giving their friends positive feedback.

You’ll Identify Your Ideal Buyer

While it’s not always easy to identify which buyers are driven in by word of mouth (even surveys and analytics aren’t perfect), you can get an idea of who your biggest target buyers are by learning more about customers who come in through this channel. You want more buyers like this, and taking note of their characteristics, like their demographics, beliefs, and purchasing habits, can help inform future marketing decisions.

Word of Mouth Has Evolved

Once upon a time, word of mouth was quite a literal phrase. If you talked to someone about a business you were excited about, then that was word of mouth. Today, we have so many other communication tools, and they can all be used for word of mouth. Phone, text, and social media are all ways we can influence with word of mouth all over the world. This is why social media has become such an important part of any marketing plan: it’s a tool for increasing word of mouth as well as engaging with existing and potential customers. Social media has the power to help word of mouth advertising spread quickly—sometimes even going “viral”. Word of mouth still takes time to build up for most businesses, but there is potential for explosive referral power that simply didn’t exist a few decades ago. Of course, it helps if you’ve got a really unique product, or a planet-saving concept that can help you go viral, but social media can help almost any business gain more word of mouth.

Tips for Increasing Word of Mouth

When you’re first starting your business, no one knows who you are or what you’re doing (okay, maybe your mom does). It’s your job to tell them! Any chance you get, you should tell people about your product or service—even if they don’t have a use for it, they may know someone who does. You, as a business owner, are the first source of word of mouth, so use it to your advantage! Carry business cards with you, and don’t forget to perfect your elevator pitch.

Giveaways are a great way to increase word of mouth. Your social media followers will tell their friends, and your products will reach more people quickly. You can also give freebies to friends and family and ask them to leave an (honest) review. Word of mouth can take some time to gain traction, but if you focus on providing an excellent product or service and back it up with excellent customer service, then your positive word of mouth can only grow.

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