Jeff Epstein

All in the Family: The New Word-of-Mouth Marketing Strategy

By: Jeff Epstein | April 9, 2018 | 

The New Word-of-Mouth Marketing StrategyThink of word-of-mouth marketing the same way you’d think of a family tree.

There’s the matriarch of the clan, relationship marketing, sitting atop the tree and ruling the roost.

Then, there are the offspring—referrals, affiliates, and influencers—originating from the matriarch and branching off on their own.

While people often use these terms interchangeably, each is a subtly distinct reimagining of word-of-mouth marketing.

Sure, they might have that dominant family trait, but they’re still individuals.

And you need to treat them as such if you want to bring out their best qualities.

The more you can leverage their differences the more successful your customer acquisition strategy will be.

Deciphering the Word-of-Mouth Marketing Family Tree

Realizing the potential value of each approach starts with recognizing what makes each marketing type unique.

From there, you can steer your strategies toward them.

  • Referrals: Referrals come from enthusiastic customers who refer your business to people in their networks. These programs have been proven to generate higher-quality leads because they are authentic, trusted voices in their communities. Referrals benefit from automation and scale much more than other types of relationship marketing. Successful referral marketers will often build in-house programs to manage and measure how effective their referrals are.
  • Affiliates: Affiliates are people incentivized to provide your business with publicity or leads. Because this strategy allows the alignment of particular incentives with particular results, affiliates are super effective for making targeted impacts. For instance, affiliates can reward marketers with a hard-to-get piece of swag for each purchase they bring in. Affiliates tend to correlate with high brand recognition, so attracting them can be both costly and time-consuming.
  • Influencers: Influencers are similar to affiliates in that they receive a reward for spreading the word, but they tend to have bigger networks of followers than affiliates. Their visibility is hugely powerful: a single post can win back the cost of an entire campaign. Because of its reach, influencer marketing has to be a more custom-made strategy. Each influencer must be wooed and understood individually. And this strategy can cause a lot of speculation before it pays anything back.

Wrapping your mind around the ins and outs of each strategy may sound as overwhelming as introducing yourself to scores of distant relatives at a family wedding.

But once you familiarize yourself with each of them, you’ll find you can use specific tactics to easily distinguish one from the other.

Find an Approach that Feels Like Family

Now that you know who everyone is, you can select and craft your marketing approach.

Employ the following strategies to ensure you’re using the best combination of tactics to satisfy your particular goals and serve your particular audience.

Lean on Old Faithful

It’s smart to rely more heavily on tactics that make the most sense for your company while launching controlled experiments into other strategies.

If your company has a solidly loyal user base, leverage it to develop a machine-like referral program the way successful companies like Dropbox have.

The file-hosting company cashed in on its loyal customers when developing its successful referral model.

Rather than providing cash rewards, Dropbox gifts the referrer and the new customer each with 500 megabytes of free storage.

The concept was a success from the outset, resulting in a 600 percent membership spike in 2010.

Dropbox saw the word-of-mouth potential its customers provided and leveraged it to resounding success, gathering more than 500 million users worldwide.

Dropbox played to its strengths by using the allure of extra storage to incentivize referrals.

Assess what your company does well or has done well, and use it to nurture a word-of-mouth approach that appeals to customers and prompts them to brand advocacy.

Take Your Customers’ Temperatures

A Nielsen study found that 92 percent of customers trust word-of-mouth marketing more than other forms of advertising.

If you’re trusting customers to spread the good word about your brand, let them share their thoughts in a way they’re most comfortable.

If you’re not sure what word-of-mouth strategies are best to use right now, let your audience decide.

Conduct an outreach campaign, and see what response you get.

If loads of your followers seem willing to refer their friends, for example, put your initial energies into launching a referral program.

If you want to start an affiliate or influencer program, look for common threads among your most active advocates—networks they all belong to or bloggers and influencers they all follow—then find ways to leverage those avenues.

Think newsletter mention or social shout out. Begin with an open mind, and start small: set a simple, small-scale objective and measure effectiveness against it.

Pick and Mix Strategies

While giving focused attention to marketing strategies can increase success, don’t stick with just one.

Interweaving multiple strategies into an overall scheme can be the best way to optimize customer acquisition.

For example, consider combining the strengths of influencer and affiliate marketing to empower trusted influencers to help build your brand.

Give them free rein to use their influence.

In the meantime, perform a more controlled foray into affiliate marketing, which is much more trackable.

Affiliates will see that they belong to the same special club as influencers they admire, and the strategies can fuel each other.

Last year, Amazon attempted just such a program when it beta-tested a twist on its affiliate marketing referral program.

Unlike the affiliate option, which is open to anyone, the influencer program invites people with active, engaging social profiles to peddle content and products on their personalized pages.

Influencers provide programmed vanity links to products on their pages and receive a commission each time a product sells.

Though it hasn’t resulted in a sales spike, the program has allowed Amazon to associate itself with reputable influencers and establish relationships and credibility with niche customers.

Word-of-Mouth Marketing isn’t THAT Complicated

So you see, the relationship marketing family isn’t so complicated.

Referral, affiliate, and influencer marketing make up a tight-knit bunch, but each member has its unique characteristics, strengths, and weaknesses.

Learn what makes each approach unique.

By doing so, you can create a relationship marketing strategy that appeals to customers.

As a result, they’ll feel a kinship to the brands they refer to their friends and family.

About Jeff Epstein

Jeff Epstein is the CEO and founder of Ambassador, a trusted referral software company that empowers brands to increase customers, referrals, and revenue by leveraging and scaling the power of word of mouth. He is a lifelong entrepreneur with a law degree from Chicago-Kent College of Law, Illinois Institute of Technology, and a degree in business from Michigan State University.