How Brands Leverage Word-of-Mouth Marketing | BoF Professional, News & Analysis

How Brands Leverage Word-of-Mouth Marketing | BoF Professional, News & Analysis

Sarah Flint was early to the trend. In 2017, she pulled her shoe brand from retailers and lowered prices on her website. For a while, the brand relied on solely on organic word-of-mouth and lucky mentions from celebrities and influencers. She saw the impact word-of-mouth was, and decided to find a way to take ownership of it. In 2019, she started recruiting a mix of influencers and “normal” customers to talk up the brand to their friends and followers. While some influencers with big followings get cash for sponsored posts, most are paid in free pairs of shoes — one pair for every five sold through unique links or promo codes provided to programme members.

Today, Sarah Flint has 500 ambassadors, and 10 percent of the brand’s sales came through the programme. The number of sales the programme is driving has grown 187 percent over last year.

“I thought a lot about how I’m finding out about brands today, and it was really from the most stylish women in my network,” she said. “I felt who better to tell those stories and to be able to spread the word about the brand than those women?”

A slew of fashion and beauty brands, from Revolve to Glossier, have hit upon the same idea. So-called social selling is particularly popular with small brands, which typically don’t have the advertising budgets to elbow out rivals for space on consumers’ Instagram feeds. Instead, they turn what they do have — a small number of fiercely loyal customers — into a viral marketing machine at a fraction of the cost.

It’s a tactic that’s proven wildly successful for many of these companies. But they’re also walking a fine line: Historically, social selling was closely associated with multi-level marketing companies like Mary Kay and Avon, where sellers may have to buy products they hope to sell. Members are encouraged to think of themselves as entrepreneurs and to boost their income by recruiting friends and family into sales networks known as downlines. At their worst, this model, also known as direct selling, draws comparisons to pyramid schemes.

The new crop of brands pick and choose from the MLM playbook. At companies like Sarah Flint or Revolve, ambassadors ask followers to buy products via unique links, earning a commission on sales or free product without having to take on the risk of holding inventory themselves. Some blur the lines, however. Beautycounter sellers aren’t required to pay for inventory but must pay a $50 for a digital enrolment kit at the start, and pay an annual membership fee, also $50. They can also form downlines to earn additional income, though it’s not a requirement.

In most cases, these programmes are able to retain what was effective about direct selling — leveraging word-of-mouth buzz into sales — without the stigma.

“Many consumers feel small is better and more authentic,” said Allen Adamson, co-founder of marketing consultancy Metaforce. “It’s opened the playing field to a lot more brands that used to be unable to compete because they didn’t have the money to build a brand image in the marketplace.”

Anyone Can Be an Influencer

Social selling operates on the same principle as influencer marketing: The strongest endorsement of a product comes from a voice the customer trusts.

It’s a pitch designed for people who wouldn’t call themselves influencers, at least beyond their immediate social circles. In theory, anyone who likes Sarah Flint heels or Beautycounter moisturisers can earn money talking up these products to friends, something they might have been doing for free already.

Some take social selling a step further.

Michele Walker, a brand ambassador for Sarah Flint, said she has a shelf in her home where she displays her collection of Sarah Flint shoes, and invites potential customers over to try them on.

“The relationship is a more personal relationship,” she said. ”I can style them or help fit the shoe for them, and then they tell their friends.”

“You’re getting the best of both worlds.”

Unlike a typical friend’s recommendation, brands coach ambassadors on sales strategies, hosting Zoom workshops or operating Facebook groups. Beautycounter “advocates” talk about how the brand avoids certain chemicals in its product formulas, and the company has called for stricter regulations on cosmetic ingredients.

“It is all of the best things about why those channels were so effective, authenticity, being really connected to the product,” said Kristi O’Brien, general manager of brand partnerships at influencer monetisation platform RewardStyle. “You’re getting the best of both worlds.”

Pitching the Modern Consumer

The biggest complaint against multi-level marketing is that sellers are often required to buy their own inventory, and can end up in debt if they fail to hit sales targets. Perpetuating the cycle by recruiting new sellers is built into the business model.

With social selling, there can be expenses — Beautycounter’s membership fees and starter packs, for instance — but for many ambassadors, the real cost is time. Sarah Flint has posting requirements of once per month, but encourages weekly posting. Others might not have formal posting requirements, but ambassadors hoping to earn even a modest income might spend hours creating social media content.

Either way, it’s a good deal for the brands, which can incorporate the best content their ambassadors create in their own marketing efforts. These homemade posts can drive serious sales without brands having to pay influencers with larger followings to create sponsored content.

“They might have a smaller following, that following is extremely engaged and interested in that person and trusts and respects what they have to say,” said Stephanie Raddock, associate director of social media strategy at marketing agency T3.

Parade sends free products to its “Friends of Parade,” who post about the intimates brand and refer new customers. Members aren’t required to post, but plenty do, giving the brand a bigger presence on social media than it could create on its own.

Onward and Upward

The bigger a brand gets, the more difficult it is to retain that intimate tone.

Glossier launched a “rep” programme in 2017, initially recruiting 500 customers, who each received their own page on the Glossier website to feature their favourite products. The brand has since folded the reps into its larger affiliate programme, a more behind-the-scenes operation where users can receive a commission on purchases made through unique links. That’s similar to how many large companies, such as Target and Amazon, run their own in-house affiliate linking programmes.

Glossier’s move away from its “rep” programme came out of a desire to scale its marketing and product discovery efforts — in essence, the brand outgrew the tactic, and chose to prioritise the brand’s overall growth versus the authenticity that these programmes provide. Therein lies another key difference from MLMs, which aspire to grow larger and larger selling networks. (Though growing these programmes is certainly still a priority — Flint said she hopes to see her brand’s ambassador programme reach over 1000 members.)

“You may end up losing some of its shine when you build these massive ambassador programmes,” said RewardStyle’s O’Brien.

Related Articles:

How Not to Be a Boring Direct-to-Consumer Brand

Beyond Avon and Mary Kay, Why Social Selling Still Works

Will Social Selling Work in Fashion?

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