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Why word-of-mouth marketing matters for your small business

September 25, 2020
Written by Nextdoor Editorial Team
September 25, 2020 | Written by Nextdoor Editorial Team

This article was updated on September 8, 2021

Despite vaccine rollouts for COVID-19, small businesses continue to be hit with uncertainty in the face of the ever-evolving global pandemic. To continue to draw customers and increase your profits for this upcoming holiday shopping season, utilize word-of-mouth marketing. But if you haven’t focused on this strategy before, you might be wondering, what is word-of-mouth marketing? 

At its most basic level, word-of-mouth marketing is when potential customers learn about your business through discussion and personal recommendations. It’s a critical piece of the marketing pie. According to Nielsen, “92 percent of consumers around the world say they trust earned media, such as recommendations from friends and family, above all other forms of advertising.” And this was no small survey sample. The research was pulled from more than 28,000 internet respondents in 56 countries. On Nextdoor, neighbors actively recommend businesses. In fact, they’ve made over 50 million business recommendations.

So how can small business owners capitalize on word-of-mouth marketing? 

This guide will look at its value and provide tips for making the most of word-of-mouth opportunities to increase ROI, develop customer relationships, and create brand awareness. 

Word-of-mouth marketing in a post-pandemic world

Even with social distancing restrictions keeping people away from each other, the importance of word-of-mouth marketing actually increased during the pandemic. As neighbors were forced to turn to online shopping, they likewise turned to trusted friends and family members to determine which businesses to support during such an unprecedented time. 

Which local businesses were contributing to the health and wellbeing of the community, or going above and beyond to provide a comfortable and convenient shopping experience for customers? These are the types of businesses consumers gravitate to

This increase in word-of-mouth marketing, coupled with the lingering effects of the pandemic, has since provided crucial insight into changing consumer behavior.

How consumer behavior has changed

Since the pandemic, consumer behavior has experienced a whirlwind of change-making word-of-mouth marketing all the more important. At first, customers were in limbo, faced with lockdowns and social distancing regulations that changed how they shopped and how businesses operated. 

Some of the most drastic business adaptations that occurred included: 

  • Online shopping boom – Businesses that hadn’t yet developed online marketplaces set up e-commerce sites and developed digital marketing strategies. Even real estate companies transitioned to virtual tours to help home-buyers view houses from the safety of their homes. Many businesses that were already online needed to refurbish their sites to ensure an efficient and streamlined customer journey despite increases in online traffic. 
  • Curbside delivery – Restaurants, retail stores, and grocery chains needed new ways to reach customers, and to do so safely. One of the most common was curbside delivery, allowing in-store staff to shop for customers and drop off their purchases outside the store. 
  • New purchase priorities – Immediately, essential items like toilet paper saw skyrocketing sales while nonessential goods took a tumble. Businesses had to quickly identify what consumers needed and refocus their stocking efforts to match.

While the need to stock up on toilet paper is no longer as pertinent, there are new consumer habits and behaviors that might be here to stay. For example:

  • Shift to digital – Despite retailers and grocery stores now being open for in-store shopping, research shows that e-commerce is expected to retain 20–30% of its pandemic growth, while online grocery shopping will keep 70–80%. In fact, PYMNTS sees shoppers moving overall to a more digital landscape.
  • Emphasis on local – To help support struggling local businesses during the pandemic, more than half of consumers around the world began to buy more locally sourced products. This seems to have started a new trend. In a recent survey, consumers reported their continued support of independent restaurants and locally sourced foods. 
  • Luxury item splurges – As vacations were limited or canceled, people who saved up to travel found new ways to splurge. Sales of boats, for instance, saw significant surges in August of 2020 as people opted for water adventures closer to home. But even as of April 2021, this trend hasn’t shown any signs of slowing. 

Why consumer behavior changes mean word of mouth matters more

In these post-pandemic times, people are looking for brands that sell community, not just commodities. The more small business owners can do to promote that, the more likely they are to see loyal customers. 

Shopping with the heart vs the head

The push to shop local is a perfect example of how consumers are choosing to shop with their hearts over their heads. Sure, the cost will always play a role in customer purchasing decisions, but recently, the need to support one’s neighborhood and make sure its businesses are able to stay afloat is playing a larger role in how people are spending their money. 

So how can small businesses use this to their advantage and gain great word-of-mouth marketing? 

  • Care over cash – Shoppers want to know that small businesses are putting their health and safety (and that of their employees) first. Even with increasing vaccination rates, you can continue to show your customers that wellness is a top priority by making hand sanitizer available and adhering to local safety guidelines.
  • Neighborhood initiatives – Customers aren’t only interested in how they can support local, but also in how their favorite local businesses are supporting each other. Get the message out about how your small business is giving back by posting on social media or pitching a story to the local newspaper. For instance, real estate agents in San Francisco partner with local businesses like Landed, an organization that helps to make homeownership accessible to educators, health care workers, and first responders.
  • Special deals – Providing discounts to frontline workers? Offering special deals to hospital staff? These choices show your customers that you recognize the sacrifices your community members have made throughout the pandemic, and are willing to pull from your own pocketbook to help out. 

Getting the word out

Building buzz (aka word-of-mouth marketing) is a matter of diligently following small business best practices, from offering exceptional customer service to selling unique products and services. By operating a well-oiled machine of a company, you should already have earned the goodwill and brand loyalty of your customers. 

But how do you get them talking about that goodwill?

Fortunately, there are a lot of ways to encourage word-of-mouth marketing. It all starts with a little self-promotion. 

Organize internal communications

To ensure each and every customer is having the best experience possible, make sure all employees are on the same page. This means setting a standard for employees to welcome customers into the store, offer assistance, provide advice and tips, and go above and beyond to create a convenient shopping experience (for instance, by carrying their bags to their car).  Chances are, shoppers will share their experience with friends and family who, in turn, will be more likely to make the extra effort to shop at your small business and experience your top rate service for themselves.

Post about it 

Social media was designed for a reason: to be social. Give your customers a place to talk about their experiences by implementing a live customer review space on your website. This may be particularly beneficial to real estate agents who rely on positive customer testimonials to garner more business. People trust word of mouth and want to know how others feel about your business. 

In fact, a survey found that 73% of customers find they trust a brand more when the business has a lot of positive reviews. What’s more, about 95% of consumers say positive reviews make them more likely to purchase a product or service from a business. 

Network

The digital era and social media platforms have made networking easier than ever before. One way to do this is by building an active social media community to draw new customers and promote engagement. In fact, 71% of consumers report being more likely to buy from a brand based on their social media referrals. 

Another study found that 74% of those surveyed said they were more likely to eat at a restaurant they follow on social media. But, the use of social media crosses many industries—77% of Realtors use social media for their business to strengthen their brand and their community. 

Once you’ve established a strong online following, you can bring these connections into the real world by organizing a local event at your business, and inviting your online followers, as well as neighbors and business owners to attend. You can even raise money for a local cause or donate your products or services to a local charity. 

Either way, by strengthening your connections with people in your community, you can build trust that will improve your business reputation. 

Alert the media

News stories can be an incredible form of word of mouth. So, let your local media know what you’re up to. Whatever initiatives you’re doing to help your community and customers—use it to gain media time. The free advertising will cost you nothing, and the goodwill could gain you more clients.

Update your website

With consumer behavior shifted toward digital, now is the time to update your website. Keep it as up-to-date as possible with information on health and safety changes, news alerts, and special events and promotions. 

Updating your website includes making it mobile-focused. According to BigCommerce, “By 2021, mobile e-commerce sales are expected to account for 54% of total e-commerce sales.” That means half your customer base is going to be visiting your website through their phones. To capture that half of your potential market, consider using a website-building platform that automatically converts the website for mobile devices.

Nextdoor: Where connections form a community

During the pandemic, Nextdoor became a lifeline for many. Isolated and at home, neighbors turned to the neighborhood hub to support each other during a challenging time. People volunteered to trade toilet paper when supplies got low and pick up groceries for those who couldn’t leave home. 

Today, Nextdoor continues to be a valuable place for community members to interact, connect, and provide support. 

That’s why it’s so valuable to small business owners. 

Nextdoor neighbors are all real people who live nearby - not bots, like so many accounts found on social media platforms these days. All Nextdoor members are registered, making it an ideal space for small businesses to spread the word about their products and services.

Join Nextdoor

Nextdoor is where your business can connect with and get to know your neighbors and most loyal customers. In fact, 88% of Nextdoor neighbors shop or support a local business at least once a week. 

It’s easy to get started. Claim your free Business Page and personalize it by adding images of your business and share your story. From there, you can: 

70% of Nextdoor members report word-of-mouth referrals from family, friends, and neighbors as their most trusted brand advocates to discover new businesses in their neighborhoods. Use Nextdoor to expand your word-of-mouth marketing today.

 

Additional sources: 

Nielsen. Consumer trust in online, social and mobile advertising grows. www.nielsen.com/us/en/insights/article/2012/consumer-trust-in-online-social-and-mobile-advertising-grows/#:~:text=According%20to%20Nielsen's%20latest%20Global,an%20increase%20of%2018%20percent

Media Post. Word of Mouth remains vital to consumers during COVID-19. https://www.mediapost.com/publications/article/354241/word-of-mouth-remains-vital-to-consumers-during-co.html

EngagementLabs.com Analytics shows that both online and offline consumer conversations drive purchase decisions but require separate marketing strategies.
https://www.engagementlabs.com/press/engagement-labs-analytics-value-consumer-conversations-published-mit-sloan-management-review/

PYMNTS. When, How And Why Consumers Will Change Post-COVID-19. https://www.pymnts.com/coronavirus/2020/when-how-why-consumers-will-change-post-covid/

Market Watch. 5 months into the COVID-19 pandemic, here’s how people’s spending habits have changed. https://www.marketwatch.com/story/splurging-on-luxury-products-instead-of-vacations-and-haircuts-at-home-what-consumer-behavior-looks-like-5-months-into-the-pandemic-11598296107

Philadelphia Inquirer. COVID-19 makes boat sales soar as families seek social distancing on the water. www.inquirer.com/business/retail/boating-sales-shortage-virus-philadelphia-20200808.html

Sprout Social. How to effectively use social media for real estate. https://sproutsocial.com/insights/social-media-for-real-estate/

QSR Magazine. Study: Nearly 50 Percent of Diners Influenced by Social Media. https://www.qsrmagazine.com/news/study-nearly-50-percent-diners-influenced-social-media


Claim your free Business Page to get started on Nextdoor. For resources on how to use Nextdoor to stay connected with your local customers, pertinent news affecting businesses, and more, follow us at @nextdoorbusiness on Facebook.


Claim your free Business Page to get started on Nextdoor. For resources on how to use Nextdoor to stay connected with your local customers, pertinent news affecting business, and more, follow us at @nextdoorbusiness on Facebook

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