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How to Get New Customers Through Word of Mouth

How to Get New Customers Through Word of Mouth

At Per Diem, we talk a lot about loyalty -- how to deepen relationships with guests and make them want to come back, day after day. That's because we believe sustainable businesses are the ones where every customer feels like a VIP, and where operators can count on incremental revenue.

But what about getting people in the door to begin with? In fact, regulars can be your biggest asset in acquiring new customers. People are 90% more likely to trust and buy from a brand recommended by a friend, and, in the marketing world, a word-of-mouth impression results in five times more sales than a paid media impression (source). When it comes to building a customer base, word of mouth is the holy grail. 

Read on for tips to put your fan base to work and bring in more customers.

Refer a friend, get a deal

Encourage existing customers to spread the word by asking them to refer a friend—and sweeten the deal with a promotion. 

One way Uber was able to grow to 118 million monthly users was by allowing customers to give ride credits to friends who had never tried the app. The existing customer helps a friend, the referred customer gets a discount, and Uber gains credibility, since the message was coming from a trusted contact rather than a generic marketing message. You don’t have to give away money to win new customers, but do think about what you can offer both engaged and referred customers to encourage a referral. For some brands, the incentive goes to the referring customer, not the new one. 

Whatever approach you choose, the key to success is tracking—knowing the giver and recipient of the referral. Technology systems, including email, social media, and other platforms, can facilitate the process and give you data to know who your best advocates are so that you can start thanking them properly. 

(Hash)tag your way to new audiences

Social media platforms like Facebook and Instagram are basically requirements for businesses now, and they can be powerful tools to reach new audiences. Use relevant hashtags to help more people discover your business, and invite followers to use them, too (for the chance to win a promotion or gift, if you like). Their followers will see the hashtag, click, and, hopefully, become followers as well. 

That said, it’s not enough to put a hashtag out in the world and expect it to take off. Instead, make the hashtag one of several that you use to reach potential customers. For example, the Miami coffee shop Vice City Bean shares Instagram posts with the tag #vicecitybean in addition to #miami and #brickell, a local neighborhood. Combining a brand-specific hashtag with local and general ones helps you get in front of more people. 

Finally, leverage your existing fans by asking followers to tag a friend. Post an irresistible dish or drink, and invite people to tag someone they want to share it with—you’ll get regulars excited about what you’re offering, and they’re telling their friends about it. 

Welcome a plus one

Everyone wants to feel like part of a community. Hold an exclusive event (in person or virtual) for your best customers—neighborhood regulars, loyalty program members, and the like. Then, give them a link to invite a friend or two. Ideally, make the event something warm and casual, more about meeting new people than selling a product. 

This strategy won’t get you the greatest quantity of email addresses to add to your marketing list, but the customer information you do get will be more powerful than any random blast. That’s because these are people who have a connection to your brand and have had the opportunity to engage with you directly. Then, it’s your job to win them over and turn them into advocates.

At Per Diem, we talk a lot about loyalty -- how to deepen relationships with guests and make them want to come back, day after day. That's because we believe sustainable businesses are the ones where every customer feels like a VIP, and where operators can count on incremental revenue.

But what about getting people in the door to begin with? In fact, regulars can be your biggest asset in acquiring new customers. People are 90% more likely to trust and buy from a brand recommended by a friend, and, in the marketing world, a word-of-mouth impression results in five times more sales than a paid media impression (source). When it comes to building a customer base, word of mouth is the holy grail. 

Read on for tips to put your fan base to work and bring in more customers.

Refer a friend, get a deal

Encourage existing customers to spread the word by asking them to refer a friend—and sweeten the deal with a promotion. 

One way Uber was able to grow to 118 million monthly users was by allowing customers to give ride credits to friends who had never tried the app. The existing customer helps a friend, the referred customer gets a discount, and Uber gains credibility, since the message was coming from a trusted contact rather than a generic marketing message. You don’t have to give away money to win new customers, but do think about what you can offer both engaged and referred customers to encourage a referral. For some brands, the incentive goes to the referring customer, not the new one. 

Whatever approach you choose, the key to success is tracking—knowing the giver and recipient of the referral. Technology systems, including email, social media, and other platforms, can facilitate the process and give you data to know who your best advocates are so that you can start thanking them properly. 

(Hash)tag your way to new audiences

Social media platforms like Facebook and Instagram are basically requirements for businesses now, and they can be powerful tools to reach new audiences. Use relevant hashtags to help more people discover your business, and invite followers to use them, too (for the chance to win a promotion or gift, if you like). Their followers will see the hashtag, click, and, hopefully, become followers as well. 

That said, it’s not enough to put a hashtag out in the world and expect it to take off. Instead, make the hashtag one of several that you use to reach potential customers. For example, the Miami coffee shop Vice City Bean shares Instagram posts with the tag #vicecitybean in addition to #miami and #brickell, a local neighborhood. Combining a brand-specific hashtag with local and general ones helps you get in front of more people. 

Finally, leverage your existing fans by asking followers to tag a friend. Post an irresistible dish or drink, and invite people to tag someone they want to share it with—you’ll get regulars excited about what you’re offering, and they’re telling their friends about it. 

Welcome a plus one

Everyone wants to feel like part of a community. Hold an exclusive event (in person or virtual) for your best customers—neighborhood regulars, loyalty program members, and the like. Then, give them a link to invite a friend or two. Ideally, make the event something warm and casual, more about meeting new people than selling a product. 

This strategy won’t get you the greatest quantity of email addresses to add to your marketing list, but the customer information you do get will be more powerful than any random blast. That’s because these are people who have a connection to your brand and have had the opportunity to engage with you directly. Then, it’s your job to win them over and turn them into advocates.

Doron Segal
Doron Segal

Hey I'm Doron, the co-founder & CTO of Per Diem — a mobile app platform for restaurants. I'm also a dad and a husband. I love to travel and meet new people.I love creating things, and see people using the stuff I built.Prior to Per Diem I worked at Saildrone, OpenTable, Apple, Beats Music, Siemens.

Tomer Molovinsky
Tomer Molovinsky

A second time founder with a passion for building products at the intersection of hospitality and technology. I've had the pleasure of launching reservation systems, mobile payment solutions, and loyalty programs at OpenTable and Resy, and witnessed how operators were losing a direct connection with their customers online. We built Per Diem to strengthen the relationships that businesses have with those customers, and to ensure that local businesses can thrive in today's economy.

Ashley Rodriguez
Ashley Rodriguez

Ashley is a freelance writer and podcast producer based in Madison, Wisconsin. She hosts a podcast called Boss Barista and writes an accompanying newsletter with full transcripts of each episode and articles about coffee and restaurant work. You can check out her work here (ashleyrodriguez.work/).

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