Why Word-of-Mouth Marketing Is More Important Than Ever in E-Commerce

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4 min read
by: Holly Kuldell03/30/2021

Quick Summary Word-of-mouth marketing in e-commerce may seem like an old-fashioned sales technique, but the reality is that it’s as effective as ever in the age of social media marketing. Every marketing strategy should include a word-of-mouth marketing (WOMM) angle.

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What Is the Definition of Word-of-Mouth Marketing?

In years past, word-of-mouth marketing was limited to person-to-person interactions. Companies relied on personal recommendations to grow revenue and expand their brands. This tactic is still important for brick-and-mortar businesses. 

When we consider word-of-mouth marketing strategy, social media is front and center, though one-on-one recommendations are still a factor. A recommendation from a powerful celebrity can have an enormous impact on sales—this is influencer marketing.

One word-of-mouth marketing definition states that word-of-mouth marketing occurs when a consumer’s interest in a company’s product or service is reflected in their daily dialogues.

Word-of-mouth marketing in e-commerce can take several forms—whether it’s posting on social networks, adding brand ambassadors, working with influencers, or seeking out user-created content. 

How Does Word-of-Mouth Marketing Help E-Commerce?

According to research conducted by Nielsen, 92% of people trust friend and family recommendations more than any other type of advertising. In e-commerce, word-of-mouth marketing is centered on this fact but tailored to online consumers. 

WOMM can help your brand stand out in a cluttered online marketplace that has only become more competitive thanks to the recent uptick in e-commerce. In addition to generating more sales, e-commerce marketing using word-of-mouth techniques can achieve many key benefits. 

Community Building

By encouraging engagement, e-commerce brands can build networks of customers invested in brand success. Social networks make it simple to build a community by inviting customers to interact with brand ambassadors or company representatives. 

Cost Savings

WOMM can be a cost-effective marketing strategy compared with costly online advertising. Low-cost investments like referral incentives for existing customers can generate word of mouth revenue and organic growth. 

Trust Building

WOMM naturally builds trust because referred customers connect with the brand on the basis of trusted friend and family recommendations. Before they even navigate to your site, these customers have a positive mindset about your brand. 

Brand Loyalty

Achieving better organic reach through community building fosters brand loyalty. WOMM can generate a cycle of goodwill, with happy customers referring new customers, who refer others, and so on. 

How Does WOMM Help Direct-to-Consumer Companies?

Direct-to-consumer (DTC) e-commerce companies, especially, stand to benefit from WOMM techniques. 

Brands like Warby Parker, Bombas, and BarkBox have hit the sweet spot when it comes to leveraging WOMM as part of their DTC marketing strategies. These companies routinely engage with customers online—encouraging conversation and responding to social network posts quickly and with a personal touch. 

DTC brands are in unique positions. Without a middleman, they can engage directly with customers in a meaningful way, naturally increasing word-of-mouth recommendations. 

Is Word-of-Mouth Marketing Worth the Effort?

Word-of-mouth marketing in e-commerce through word of mouth is an effective way to build your brand and increase sales. While you may not go viral with every post, as you increase your WOMM efforts, you’ll be growing a strong and loyal fanbase that will happily spread the word about why they love your brand. 

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