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Customer acquisition is at a pivotal moment, particularly within the ecommerce industry. In the face of inflation and higher-than-usual sales expectations, numerous brands have called out the astronomically high acquisition costs as barriers to achieving their near and long-term goals. As traditional paid strategies become less effective, retailers have scrambled to find a replacement solution. For brands with limited marketing budgets, word-of-mouth referrals are the golden ticket to low (or no-cost) customer acquisition.
Word-of-Mouth Referrals in 2022 and Beyond
Word-of-mouth referrals are becoming increasingly effective as an organic acquisition tactic and an invaluable byproduct of positive customer experiences. Gladly’s 2022 Customer Expectations Report found that 59% of shoppers said they’d recommend a brand because of great service. These referrals are a result of brands leaning heavily into retention and loyalty-driving strategies, and receiving the trickle-down benefits as a result.
2022 Customer Expectations Report
To understand the full value of these recommendations, let’s take a closer look at how word-of-mouth referrals can happen organically, and the tools and tactics that generate them. Brands can use these ideas to replicate those crucial acquisition metrics and continue their sustained revenue growth into the future.
What Are Word-of-Mouth Referrals?
Word-of-mouth referrals are organic recommendations of a brand that customers make to their friends, family, community, or social media followers.
Referrals can also come through deliberate paid tactics called referral marketing, wherein a brand will provide a bonus offer or promotion to an existing customer in order to bring in new ones. However, since this uses company resources and is instigated by the brand, these tactics aren’t considered “organic.”
Instead, word-of-mouth referrals are given freely, often because of a positive customer experience. Not only do organic referrals come from valued, loyal customers, but new shoppers are also far more receptive to these messages. A Nielsen report found that 92% of shoppers relied more on word-of-mouth recommendations from trusted sources like friends, family, and influencers than any other form of paid marketing.
Benefits of Word-of-Mouth Referrals
Word-of-mouth referrals are highly valuable to brands, not only because they are free (no extra marketing spend or paid ads needed to draw customers to you,) but also because they create a virtuous cycle of happy customers evangelizing your brand to others. Not only that, but word-of-mouth referrals often start (or continue upon) the process of building a customer community.
How to Get Word-of-Mouth Referrals
Organic word-of-mouth comes from an exceptional customer experience that encourages shoppers to spread the word. Brands that focus on customer support, empathetic messaging, and creating personalized experiences often get the most buzz.
Popular clothing retailer Chubbies is a great example. In a conversation on Gladly’s Radically Personal podcast, co-founder and chief digital officer Tom Montgomery discussed a scenario when a customer wrote in to say their shorts had been stolen out of their school locker. Chubbies not only sent a replacement pair, but the brand also gifted them free karate lessons, demonstrating the brand’s ability to be personal, viral-minded, and take a unique approach to service all at once.
Customer Experience Resources to Build Long-Term Brand Loyalty
How to Increase Word-of-Mouth Referrals
These are the three most effective ways to boost organic referrals quickly:
- Provide personalized, efficient service
- Help shoppers check out faster and more securely
- Launch a referral program
Why These Tactics Generate Buzz for Ecommerce Brands
- Provide personalized, efficient service. Customers love to feel like they’re being heard and treated like individuals, not just tickets being checked off in a system. Personal touches like streamlined, continuous conversations across channels show these shoppers that you remember who they are and care about their needs and experiences.
- Help shoppers check out faster and more securely. In-channel payments can leave customers feeling more than satisfied with how easy it is to shop with your brand.
- Launch a referral program. Provide win-win opportunities for customers and potential shoppers in their networks by offering both of them a small discount on their next purchase.
These loyalty and retention strategies are what will generate organic marketing that’ll give you a competitive advantage. As word-of-mouth referrals become the gold standard, be sure to invest in the training and technology that foster strong customer relationships. In doing so, you’ll create long-term, valuable customers who will share their vote of confidence in your brand with new curious shoppers.