2016_JUN_ALL - MARKETING - 5 Ways Retailers Can Increase Word of Mouth and Referrals

Francesca Nicasio Vend

Francesca Nicasio is Vend's resident retail blogger. She writes about trends, tips, and other cool things that can help retailers increase sales, serve customers better, and be more awesome overall.

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.

2016_JUN_ALL - MARKETING - 5 Ways Retailers Can Increase Word of Mouth and Referrals

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.

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.

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 people 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.

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.

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.

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.

Francesca Nicasio Vend

Francesca Nicasio is Vend's resident retail blogger. She writes about trends, tips, and other cool things that can help retailers increase sales, serve customers better, and be more awesome overall.