I run a business called Mention Me and we help businesses to new customer acquisition through referrals We take your most valuable asset, you existing customer base, and turn it into a new source of acquisition We work with more than 400 clients to make referral work The reason we fixate on trust is because referral is so powerful for transferring trust When I refer a brand to you, the trust that I have in that brand is immediately transferred to you There is no other channel like it And so when you get trust right and your customers spread that trust you end up with a fantastic growth engine for your business
There are several challenges in the world of marketing – not least the rise in customer acquisition costs as traditional channels become more expensive
At the same time as costs are going up, trust is going down.
Nielsen - tracking trust in marketing channels for the last 5 years
Almost all mainstream channels are less trusted.
That matters. If trust channel less, they inherently trust your message / brand less.
And this goes hand in hand with another challenge in marketing.
But the problem is that marketing and ecomm run on trust - to enter your details into a website / to believe a brand you need trust
These two trends (costs and trust) are happening a the same time as the continued growth in ecommerce
> Marketing is getting harder. There are more ways to spend money but they’re all getting less effective.
Advertising landscape - some formats growing and others dramatically shrinking as media consumption patterns change. Hard to know what is reliable.
Marketers driven to explore novel new options like programmatic spending, using branded emojis and shopping assistant chatbots. How do you prioritise when effectiveness is still unknown?
Need to think about the channels where you can reliably bring in customers who are going to trust you and for whom you are going to be relevant.
Let me start with why this is interesting. The way marketing works today, we all know our numbers. We think we all know our channels and our attribution and we all do our best to allocate budgets accordingly. The problem with this is that we don’t know what we don’t know. Jonah Berger, a professor at Wharton Business School in the States, recently did some research and found that word of mouth is the primary factor behind 20-50% of all buying decisions and is 10x more effective than advertising. This is not something you’d see in your data. It talks to the value of getting this right. It may be slightly softer than optimising PPC or affiliates, but if you get it right is significantly more valuable.
When you think about why referral is so effective there are a few reasons. Let’s take Catherine and Amaki as an example. One reason, we’ve already mentioned, is the way that trust is shared in the interaction. Amaki is ready to buy when Catherine shares. And the reason for that is because Catherine is risking her own reputation by sharing it. But the other reason is because Catherine applies a relevance filter before sharing. This dynamic makes referral incredibly powerful.
So how do you generate word of mouth?
There’s one thing knowing it’s effective but it’s another thing to really make it deliver First there are some fundamentals you need to get in place When you think about word of mouth it’s useful to think through the: Who? What? How? Why? (and it’s the why which is the hardest and most valuable part)
Who? Genuine WoM is not about influencers. Don’t confuse the two. In our recent research we found that friends are the most trusted across all age groups when he comes to brand recommendations It’s about turning your customers into an army of advocates. It’s about your best customers bringing in their best friends. There are plenty of tools for finding influencers both inside and outside of your customer base. By all means use them. But don’t think that this is word of mouth. So to make word of mouth you need to understand who your customers are, and which segments of customers are closest to you and most trusting of your brand. Referral programmes are often the best place to start to learn about this.
What? This goes back to the theme of trust that we talked about up front What are people going to refer to their friends and do they trust it? Are they going to refer your brand or your products? What are they going to be telling their friends about? It sounds obvious but you need to think through the type of conversations that your customers are going to be having and whether they’ll share it. Before trying to start pushing word of mouth and referrals, you need to take an honest look as to whether customers have a positive perception of your brand and that they trust it.
How? Understanding how customers actually want to interact with their friends is really important. And within that you need to recognise the power of offline. Jonah Berger, found that 93% of word of mouth is offline and only 7% is social media. So you need to let people share where is most natural to them.
When we set up Mention Me, we realised this and so one of our early innovations was to let people share in the real world, offline. We recognised that a lot of people were talking about brands at the school gates, over a coffee or a beer or with their colleagues over lunch. Sharing a link was unlikely to work. We let people share just by using our name.
Why? The why is the most interesting question? It’s here that you get in to social psychology. There are 5 factors that make a difference
Now let’s bring this to life with some real world examples
We’ve worked with Farfetch for the last four years and they are amazing for social capital.
Fashion is great for showing off Take De Mellier - lovely luxury bags. A new bag will garner compliments, and each compliment should be turned into a referral.
The best place to start with word of mouth is a referral programme It lets you actively manage and optimise the channel and test how you get your messages across