What is word-of-mouth marketing?

We’ll explain what word-of-mouth marketing really means, how it works, and why it can be an effective tool for UW Partners.

What is word-of-mouth marketing?

Word-of-mouth marketing, sometimes called WOM or WOMM for short, is when people share their honest opinions and experiences about a product or service with others.

It’s one of the oldest and most trusted ways to spread information because it comes directly from real people, not paid ads from businesses.

For example, when someone recommends UW services to their friends, family, or colleagues, that’s word-of-mouth marketing in action.

You might also hear the terms ‘word-of-mouth advertising’ or ‘mouth-to-mouth marketing’, but these are usually just variations of the original term.

Understanding what word of mouth means can help UW Partners appreciate the power they already have to grow their business by sharing what they know and love about UW with their network.

How does word-of-mouth marketing work?

Word-of-mouth marketing works because people trust recommendations from people they know more than traditional ads. Here’s how it usually plays out:

• Positive experience

It all starts when someone has a good experience with a product or service, like saving money, receiving excellent customer support, or simply being impressed by the value offered.

• Sharing with others

That satisfied customer then talks about their personal experience with someone they know. It could be a friend, a family member, or a colleague at work, and they trust the recommendation because it comes from someone they know and respect.

• Trust and influence

As the recommendation is personal, the listener is more likely to pay attention and consider trying the product or service themselves. This trust is what makes word-of-mouth marketing so powerful compared to traditional advertising.

• Decision and action

The authenticity of the recommendation encourages the listener to take further action. They might do more research, ask questions, or decide to make a purchase or switch services.

• Further sharing

If they decide to try the product or service for themselves and their experience is also positive, the cycle continues as they share their recommendations with others. This creates a ripple effect that spreads the message even wider.

Today, word-of-mouth marketing doesn’t just happen face-to-face or in-person. It also happens online through social media posts, reviews, messaging apps, and emails. These digital channels help recommendations reach more people faster and keep the conversation going beyond your immediate circle.

Examples of word-of-mouth marketing

Word-of-mouth marketing takes many forms, both in everyday life and online. Here are some common examples of how it happens in practice:

1. Personal recommendations

A customer telling a friend or family member about a product or service they love is the classic form of word-of-mouth marketing. These one-to-one conversations are often the most trusted.

2. Social media sharing

People often share reviews, photos, or stories about products on social platforms like Facebook, Instagram, X, or TikTok. A positive post or video can encourage others in their network to check out the product or service for themselves.

3. Online reviews and testimonials

Leaving reviews on sites like Trustpilot and Google or directly on a business’s website helps build social proof for other people who read about their experience. When potential customers see genuine feedback from real users, it boosts their confidence in buying or switching.

4. Community forums and discussion boards

As people become savvier with spending, it’s not uncommon for them to share their experiences and advice on forums related to finances, utilities, or local communities. These conversations can help introduce others to services they might not have found otherwise.

5. Referral programmes

Lots of companies encourage word-of-mouth by rewarding customers for referring friends, often by offering discounts or even a set amount of cashback. This creates an incentive for happy customers to actively spread the word.

Advantages of word-of-mouth marketing

Word-of-mouth marketing offers several key benefits that make it an incredibly effective way to grow a business or network. Here are some of the main advantages:

Builds trust quickly

Since recommendations come from people you know and trust, word-of-mouth marketing creates instant credibility. In fact, a Nielsen survey found that 92% of people trusted recommendations from friends and family above all other forms of advertising when making a purchasing decision. It makes it easier for potential customers to feel confident in their decision.

It’s cost-effective

Unlike traditional advertising, word-of-mouth marketing doesn’t require a big budget. Positive experiences and genuine referrals spread naturally, saving companies money while reaching the right people. WOM has also been found to be more effective than paid ads, resulting in five times more sales.

Leads to high conversion rates

People are more likely to act on recommendations from friends or family than ads. This means word-of-mouth leads often convert better and faster.

Creates loyal customers

When someone comes through a trusted recommendation, they’re more likely to stay loyal and recommend the service to others, continuing the cycle. The Wharton School of Business found that customers referred by other customers are 16–24% more loyal on average.

Encourages growth

One happy customer can influence multiple people, who then pass the message along further. Studies have revealed that word-of-mouth marketing may be directly responsible for 9 in 10 purchases, which shows how this ripple effect can grow exponentially.

Enhances brand reputation

Consistent positive recommendations build a strong reputation and can set a business apart from competitors who may not have any or as many positive reviews.

Creates a library of user-generated content

Brands that build up a large number of recommendations, especially ones left online via reviews, testimonials, or social media posts, can repurpose these on their website or other marketing channels.

How UW Partners can use word-of-mouth marketing to grow their business

Like the sound of word-of-mouth marketing to grow your UW network? Sparking genuine conversations and building trust is key to being a Partner. Here are a few simple ways to make the most of it:

• Deliver excellent service – Providing a great experience is the foundation, and you’ll probably find that referrals may come naturally afterwards. When people see you’re knowledgeable, helpful, and reliable, they’re more likely to recommend you to others.

• Encourage referrals – Don’t be shy about asking happy customers to tell their friends or family about how much money you’ve helped them save on their monthly utility bill. A friendly reminder can go a long way.

• Share your own story – Talking openly about your experience and why you believe in UW’s services can help build rapport with potential clients, as personal stories are relatable and can spark genuine interest.

• Use social media – Whenever you receive a testimonial, contribute to a success story, or have useful information you want to share, make it a habit to post it on your social media channels. Engaging content can encourage followers to spread the word.

• Host informal events or webinars – Gather people together online or in-person to talk about how they can benefit and encourage them to interact with other clients, too. By doing this, you’re also creating a safe, relaxed space to answer their questions.

• Stay connected – Keep in touch with your network regularly, providing updates, tips, and support. The more engaged your contacts feel, the more likely they are to recommend you.

Common challenges with word-of-mouth marketing and how to overcome them

While word-of-mouth marketing is powerful, it may not be for everyone or every situation. Knowing what to expect can help you stay on track and make the most of your efforts.

Here are some common challenges you might run into:

• Relying solely on word-of-mouth can slow growth

Word-of-mouth marketing builds trust, but it often takes time to spread naturally. Relying only on referrals might mean slower progress than more active marketing methods. Take, for example, paid ads; a study found that nearly half of all purchases attributed to an ad happen within the first hour after an ad impression.

To avoid this, consider combining word-of-mouth with other tactics like social media marketing, running workshops and events, or direct outreach to speed up growth.

• Not having a clear plan

Without a clear strategy, you might find your word-of-mouth efforts inconsistent or ineffective. After all, it can be easy to miss opportunities to encourage referrals or follow up with interested clients if you’re working a full-time job and are a UW Partner on the side.

To give yourself more steer, set goals, track referrals, and plan regular activities like follow-ups to keep momentum going.

• Difficulty encouraging people to share

Some customers or contacts may love your service but don’t think to tell others about it, or don’t feel motivated to do so. If this sounds familiar, have a go at making it as easy as possible for them to share: provide clear information or gently remind them when appropriate.

• Negative word-of-mouth

One of the biggest difficulties with word-of-mouth is receiving a negative recommendation, as it can damage your reputation.

It’s estimated that 96% of unhappy customers don’t complain directly to the company, but instead, they share their experience with up to 15 people​​. Then, it can take around 40 positive reviews to make up for the damage caused by a single negative recommendation.

To try and avoid this, always respond professionally to concerns, fix issues quickly, and turn negative experiences into positive ones where possible.

Start growing your UW Partner network with word-of-mouth marketing

If you’re ready to take your business to the next level, start by focusing on great service and genuine conversations. Remember, every recommendation counts – and could lead to new opportunities.

Start using word-of-mouth marketing to grow your network, or learn more about becoming a UW Partner today.