What is Word of Mouth Marketing?

Written by Jessica Adkins

February 20, 2019

What is Word of Mouth Marketing?

If you’ve worked with the dual special needs population (D-SNPs), you’ve likely heard they are the ultimate word of mouth population – and they are. However, what is exactly is “word of mouth” marketing?

According to the business dictionary and most textbooks, word of mouth marketing is an oral or written recommendation by a satisfied customer to a prospective customer of goods and services. Considered to be one of the most effective forms of promotions, it’s also called word of mouth advertising which is incorrect because, by definition, advertising is a paid and non-personal communication. If you go by the business dictionary’s definition, then you know that word of mouth marketing is simply referrals or testimonials, and this is why most agents and agencies refer to the dual eligible and D-SNP market as the ultimate word of mouth population. Agent Pipeline defines word of mouth marketing a little differently. We look at word of mouth marketing for insurance agents as turning your customers into your most effective sales and marketing asset by doing something they don’t expect and giving them a reason to tell someone about your business.

There are two types of word of mouth: reactive word of mouth and proactive word of mouth.

To achieve either, you need to understand that competency doesn’t create conversation. When you do exactly as your customers or prospects expect and anticipate, they do not mention you to anyone because there is no “story to tell.” Have you ever made any recommendation based on a perfectly adequate experience? It’s unlikely. Once you have provided a service or experience to your customer or prospect that is out of the ordinary, this will prompt one or both of the two types of word of mouth marketing to happen.

Reactive Word of Mouth Definition

When your customer mentions your product or service when prompted, in the midst of an offline conversation. Example: When a group of beneficiaries is discussing the cost of health insurance and their current coverage options, and your client says, “Yes, XYZ Insurance Agency helped me enroll in a health plan, and you would not believe how John Smith went to any lengths to help us find something that covered our medications, and our doctors were in network!”

Proactive Word of Mouth Definition

When your customer introduces or inserts your product or service into a topically unrelated conversation.  Example: Beneficiaries are discussing something entirely unrelated to insurance, and your client says, “Oh, I meant to tell you about John Smith, he was at our apartment last week. You wouldn’t believe how helpful he was with getting our health insurance costs down!”

Which type of word of mouth is best?

Both are important. Word of mouth is the most persuasive and most common way that people make buying decisions. However, proactive word of mouth is the most effective because it requires your customer to be so excited about your services that they are compelled to find a way to bring it up in a conversation! Telling a story when asked is one thing, but telling a story without being asked is something else entirely. It requires more conviction and passion. To make sure word of mouth about you is proactive, you need to make sure that your customer experience is genuinely different.

Have you developed a word of mouth marketing plan? Agent Pipeline offers a 6 Step Process to identify, test, measure, and operationalize a true differentiator for your business. Click here to download your short guide now.

Questions? Give us a call at 800-962-4693 to learn more about word of mouth marketing, how to get more referrals, and other unique strategies to help maximize your income and minimize your efforts.

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