6 Companies that Prove the Power of Word-of-Mouth Marketing

03/20/2017 10:56 pm ET

Today’s marketers have so many digital tools available to them. Social media marketing, content marketing, email marketing, SEO—it’s easy to get so caught up in these new strategies that we forget about the oldest trick in the book: word of mouth.

Even though it’s not always on contemporary marketers’ radar, word-of-mouth marketing has an incredible impact on potential customers. One Nielsen study found a whopping 92 percent of consumers value referrals from friends or family members more than any other type of marketing.

If you’re still skeptical, the success of these six companies might convert you. Each of these businesses eschewed most contemporary advertising strategies and embraced word-of-mouth marketing instead. The results of their efforts speak to the power of personal recommendations when it comes to building a brand.

Coconut Bliss

The dairy-free frozen dessert company distributes more than two million pints and boasts revenues of more than $5 million each year. These large numbers bely the brand’s humble beginnings.

When it was starting out, Coconut Bliss invested in building personal relationships with potential customers by hosting small-scale tasting parties and demonstrations. As their fan base grew, the company encouraged their customers to advocate for stores to carry the brand’s product line. They also developed a large social media presence in order to expand their social reach. That’s really all it took: Developing a quality product, sharing it with customers, and encouraging said customers to spread the word.

Dropbox

These days, Dropbox is known by hip millennials and luddite Boomers alike. But the company didn’t invest many advertising dollars in earning this recognition. Instead, it grew to an approximately $10 billion company largely via the power of word-of-mouth marketing.

As a young business, Dropbox relied on refer-a-friend programs and sign-up incentives distributed via social media. Together, these word-of-mouth strategies rapidly grew the company’s brand recognition both on- and off-line.

Lands’ End

When Lands’ End decided to launch Lands’ End Canvas, a product line targeting millennials, it embraced the power of word-of-mouth marketing. The company partnered with eight well-known bloggers, each of whom was charged with curating a “Blog-Up Shop,” or digital retail space, on their personal platform. These influencers truly spread the word: The campaign generated more than $100,000 in sales and over 60 million impressions on the internet stars’ sites.

Tinder

There’s not a millennial in the country who hasn’t at least heard of Tinder (if not swiped right a few times). But can you name a single ad for Tinder on traditional media outlets? The dating app’s notable absence from conventional marketing channels is a result of its decision to rely on word-of-mouth instead.

When the app was just starting out, it targeted college campuses by hiring “college campus reps”. These brand advocates were tasked with planning parties and other events at which guests were required to download or engage with the app in order to participate. After that, the brand let these new users do the talking. The result? In a mere two years, Tinder grew to 50 million users.

WinkBeds

Like the other companies on this list, WinkBeds grew from humble beginnings. The e-commerce mattress company started out as a one-man show operated from the founder’s apartment. At first, the brand grew slowly—customer by customer. Those customers started to talk, and as a result the brand was eventually noticed by a prominent mattress review site, which posted a glowing review that got the site’s whole following talking about WinkBeds.

Nearly overnight, the brand grew from selling three mattresses per week to more than 300 per month. Even as WinkBeds continues to make a name for itself in the mattress industry, the brand relies primarily on word-of-mouth marketing from satisfied customers.

Zappos

Zappos has long embodied the idea of “If you build it, they will come”. The company’s twist on this adage has been, “If you build a stellar company, the customers will come (and they’ll tell all their friends to come, too).”

Instead of investing in traditional advertising strategies, the clothing and shoe retailer has channeled its dollars into providing an exceptional customer experience. Not only does this build repeat business (up to 75 percent of the company’s sales stem from returning customers); it also inspires existing customers to spread the word to new or potential buyers. Clearly, this strategy worked: Zappos was purchased by Amazon for a whopping $928 million in 2009.

These companies operate in vastly different industries and target different demographics. Yet they all share in common a belief in the power of word-of-mouth marketing. That belief is borne out in the remarkable successes of each of these companies. Their stories suggest that one of the best growth strategies for businesses of all stripes is to create a product or service that gets people talking.

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