7 Ways Retailers Can Increase Word of Mouth and Referrals

referrals concept handwritten on blackboard

Word of mouth is one of the most powerful drivers of traffic and sales for retailers. According to McKinsey, it’s the primary factor behind 20 – 50% of all buying decisions and can influence purchases in ways that traditional advertising can’t.

Word of mouth is like the holy grail of marketing. And to help you tap into it, we’ve compiled some tips that you can put into action in your store.

Offer exceptional products and customer service

When you have truly outstanding products and services, many of your customers will talk up your store all on their own. So before you cook up word of mouth gimmicks or referral programs, make sure that you’re  blowing away shoppers with fantastic products and customer service.

Invest in your merchandise. Use high-quality materials, see if you can present them better, and highlight the ways your products are superior to others.

In the same vein, you should also invest in your staff. Allocate resources for staff training and happiness. Come up with ways to keep your employees engaged and motivated.

You’ll find that these investments can pay off in the form of delighted, raving customers who tell all their friends about you.

One example of a retailer that’s focused on product and service quality is American Giant. Rather than spending a ton of money on advertising and marketing, the retailer invests in developing high-quality merchandise. American Giant believes that when they provide exceptional products and customer service, customers will naturally spread the word.

As they say on their website:

The pressure to attract consumers leaves most apparel businesses with bloated marketing budgets. We have a different approach. Instead of investing in billboards and commercials, we invest in quality product and great service with the hope that our customers will become our advocates. We’ve found that if we can exceed customers’ expectations, they want to share and spread the word for us.

This strategy worked out great for American Giant. One of their main products, the classic sweatshirt, was dubbed the best hoodie of all time. At one point, the retailer couldn’t make the sweatshirts fast enough, and shoppers had to wait months just to buy it. Not bad for a company that doesn’t advertise.

Spell it out for customers

Sometimes, you need to give people a little reminder to spread the word about your brand. You can do this in-store by putting subtle prompts around your shop to get people to talk about your products.

For instance, some apparel retailers have hashtag stickers in their dressing rooms to nudge customers into sharing photos of themselves while trying on the store’s clothes.

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New York & Company, for example, has hashtag decals posted on their fitting room mirrors.

Other merchants are more explicit with their word of mouth efforts. Take, for example, Sleeping Baby, an online retailer that sells swaddle transition blankets for babies. Whenever someone buys their products, Sleeping Baby encloses a postcard with each delivery, thanking customers for the sale and requesting that they post a photo of their baby with their products on the company’s Facebook page.

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Because of this, Sleeping Baby’s Facebook page is filled with customer photos and comments. Aside from getting people talking, having all that social proof also increases the likelihood that people will buy.

The key takeaway here? You can get people talking (or posting) just by reminding them to do so. If you have amazing products that customers love, ask them to spread the word. There’s a big chance that they’ll say yes.

Identify and engage brand advocates

Recognize that people have varying word of mouth potentials. Some shoppers are more likely to make referrals compared to others. The key is to identify individuals who are most likely to recommend you to their friends, and then reach out to them.

How do you zero in on these people? Turn to your best customers. Go through shopper data and find individuals who have purchased and interacted with your brand the most. From there, create a campaign to encourage word of mouth and referrals.

One brand that did this well is Sony. According to Marketing Sherpa, to increase signups for its branded credit card, Sony identified their most engaged customers and sent those people an email incentivizing them to refer their friends.

For testing purposes, the company also sent the same email to a control group of non-influencers. Upon doing this, Sony saw that the influencer segment generated results that were 2.8 times better than the control group.

Consider doing something similar in your business. Rather than targeting everyone with a word of mouth campaign, do research on your top customers.  Determine who they are, and figure out the best way to approach them.

Run an influencer campaign

Pay attention to the people that your customers are listening to. Aside from their friends and relatives, are there bloggers, social media personalities who influence their buying decisions? Find these individuals and use their platform to spread the word about your brand.

One example of a retailer that tapped into influencers is Kohl’s. Last year, the department store partnered up with a fitness-centric influencer network called FitFluencer to launch the #MakeYourMove campaign, in which they encouraged FitFluential bloggers to publish posts containing fitness tips and product recommendations from Kohl’s.

Looking to use influencer marketing to boost word of mouth? Start by finding relevant influencers in your niche. You can do this on your own by asking customers about the people they follow online. Alternatively, you could use services such as Speakr or Women’s Influencer Network to connect with influencers.

Tip

Want to improve your influencer outreach results? Caitlin Gustafson of Web Talent Marketing shares the following advice:

1. Look for middle-level influencers; they aren’t as expensive to work with and oftentimes they’re still at the stage where they are flattered to be contacted by brands. Sometimes you can find influencers who are willing to do a review or mention your product on social media in exchange for free products and you featuring their review on your own social channels (especially if you have a great social presence.)

2. Look for influencers who may have mentioned your products before but do not regularly do so. It may be that they enjoy your products, but they just aren’t top of mind or they can’t afford to buy them regularly. Just sending a few free products – no strings attached – with a personalized note saying thanks for talking about your product – can get you a few new mentions.

Run a contest and use it to measure word of mouth

Janice Mckay, of Spring Lynn Motorcycles advises retailers to run a contest to generate word of mouth. According to her, doing so not only  generates engagement, but it allows you to measure the results quite easily. Have a look at what she has to say below:

Let’s say last month you spent $500 on 4 weekly adverts in the newspaper. You’re not sure who read it, if anyone at all! Plus, you’re not that confident with the wording and with the position of the advert in the paper. It’s totally hit or miss.

Wouldn’t it be far more effective — and engaging for your audience —to spend that same money on a giveaway instead?

The competition entries are a way for you to physically measure how many people have taken notice of your campaign and who they are. This enables you to perform important market research at the same time, so you know if the campaign and if it’s something you should replicate in the future. 

Be creative with your competition idea so that its newsworthy enough to notify the media. (Not sure how to notify the media? Learn how to write a press release here.)

And when you have a winner, make sure you get some photos of them with their exciting new prize. This photo and your competition story could make the news and get you:

a) A prime spot in the newspaper.

b) A much bigger space in the newspaper than the adverts you bought.

c) An interesting story that people might enjoy reading compared with a boring, generic advert.

d) An angle which makes you sound very generous with your giveaway offering.

Case in point: I once ran a contest in my business, and it allowed me to improve word of mouth and land some sweet media mentions. It got me a full a page magazine feature, ant the best part is, it cost me nothing! If had a gone with traditional advertising, that type of placement would have cost me upward of $30,000! And wouldn’t have been half as effective, because let’s face it — who wants to read magazine ads?

Sponsor or host events

“You can also notify the media if you are sponsoring an event, or holding one yourself,” Janice continues. “If you hold regular, exciting events, send regular press releases and after a while the media will get to know you as an exciting, forward-thinking business.”

“When sponsoring an event, it’s a good idea to also be involved with a charity – this is more newsworthy and the organization you team up with can also help you get media attention. Plus it means people recognize and trust you as a contributing member of the community.”

Build communities

Getting people together through events, clubs, and whatnot can organically generate word of mouth. When people are part of a community, they’re more likely to spread the word — and even recruit — like minded individuals.

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One retailer that’s doing a stellar job at fostering communities is Lululemon. The retailer regularly holds local classes and events, and these initiatives bring people together. Lululemon events are fun and educational, so attendees get a ton of value out of them.

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Another example is American Express. The credit card company runs Open Forum, a website that provides insights, inspiration, and connections to help entrepreneurs grow their businesses. In addition to thought leadership articles, the site lets users ask questions and seek advice from fellow members on just about anything about their business.

Through Open Forum, American Express has managed to empower entrepreneurs, while building their brand at the same time.

If you have a highly engaged customer base, you’re in a perfect position to implement a community building initiative. Come up with ways (hint: ask your customers) to bring people together in a fun or even educational way. Be it through meet-ups, online groups, or classes, see if you can launch something that would cultivate relationships and get people talking.

Your turn

How can retailers improve word of mouth for their stores? Let us know in the comments.

 

About Francesca Nicasio

Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.

  • Gavin Bottrell

    Your employees can be your best brand advocates. Ensure every employee understands the values and practices that make your business unique. Doing so will allow them to speak confidently when asked about your business. It ensures that what they communicate is consistent with all other marketing channels.
    Gavin Bottrell
    Bottrell Business Consultants
    http://www.bottrellaccounting.com.au

    • Excellent, Gavin. Employees — especially if they’re well-trained and are happy with their wrok — can be some of the retailer’s best brand advocates.

      Thanks for weighing in!

  • Deepti Sharma

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