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4 Ways SaaS Companies Can Use Word-of-Mouth Marketing to Drive Growth SaaS founders can get hyper-focused on paid channels like Google Ads and Facebook Ads, but personal recommendations are driving buying decisions in 2021.

By Mike K. Tatum Edited by Amanda Breen

Opinions expressed by Entrepreneur contributors are their own.

Word-of-mouth marketing was the very first type of marketing, and it remains the most powerful for SaaS companies even though many have the optimization of digital-advertising channels like Google Ads down to a science. I'm a marketer at a well-known tech company that spends a lot of money on software, and I get inundated with countless ads, cold emails and LinkedIn messages promoting software that does everything from project management to attribution modeling and I ignore 99% of it. There are a lot of companies investing a lot of time and money to reach me, and the vast majority of that money and effort is wasted.

The one thing that does get my attention each and every time is someone I know and respect recommending a particular piece of software. A single personal recommendation from someone I trust is all it takes for me to sit for a demo, trial a tool or outright buy a piece of software with no other marketing or sales effort required.

Most SaaS companies have made little effort to encourage word-of-mouth marketing because it's hard to measure and doesn't fit neatly into an attribution model like SEO, Facebook Ads and outbound sales, but it's a huge missed opportunity to cost-effectively drive growth.

There are four simple ways that you can make word of mouth a part of your marketing strategy.

Related: Here's How to Calculate What's Working When You're Marketing on Lots of Channels

Make giving referrals easy

People are extremely busy, so even customers who absolutely love your product aren't going to exert a bunch of effort to recommend you. That means it's on you to make it as easy as possible. Take a look at how your current customers are typically communicating with other professionals in similar roles.

Something like a Mailto link that automatically loads a thoughtfully written email into their email client so all they need to do is select a contact and click send can go a very long way. Any way you can remove friction from the process of recommending your product will pay dividends when it comes to getting new customers.

Celebrate advocates

When the people who love your product do put in the effort, you need to celebrate them and make sure you do it publicly. It shows that you actually appreciate that they took out the time to do something that directly benefits you. A great source of inspiration is Morning Brew. The company gamifies providing referrals with simple swag and perks.

None of the incentives they give to those who recommend new subscribers are very expensive, and they get much more ad revenue out of 25 new subscribers than the cost of sending someone a Morning Brew t-shirt. What matters is that the people recommending new subscribers see that Morning Brew appreciates them taking the time to send subscribers to the newsletter. One important takeaway is that they don't offer money like an affiliate program. Non-cash incentives often encourage more meaningful recommendations because they are authentically fans of the product and not just hunting for some easy money.

Related: 5 Ways to Make Swag Giveaways Count

Leverage internal experts

No matter what product you sell, you probably have employees that fit your customer profile, and you should empower them to be the face of the product in whatever way they want. If you're selling marketing software, you've probably got marketing leaders, and if you're selling customer-service software, I'm sure you've got a customer-service team.

These internal experts are a huge untapped resource in most companies because you better believe the CMO of HubSpot carries a lot of influence among the marketers they are trying to sell to. This doesn't mean making them some kind of official spokesperson and curating everything you want them to say. The key to good word-of-mouth marketing is that it's authentic, so trying to control the message and encouraging them to sound like human ads is going to turn potential buyers off.

A company that does this really well is Gong. It empowers its internal experts across marketing and sales to carry Gong's message across LinkedIn. The company creates visual assets that it knows its employees will want to share, and it lets them put their own voice behind what they share so that it stays authentic and the people in their networks feel like they've got a real perspective on the product.

Invest as much in customer marketing as you do in acquisition

I've seen so many SaaS companies invest in an entire team of marketers dedicated to acquiring new customers and spending over $1 million a month on ads. Then, when it comes to customer marketing, it ends up being the job of one person with almost no budget. You might be surprised by the ROI you could get if you balanced that marketing investment a little more evenly. The way you get more word-of-mouth marketing is by building a relationship with customers that goes beyond just being transactional. Your customers expect you to have a good product, but what they don't expect is for you to be invested in them as people. You can give them a voice in your content by asking for quotes, give them a platform to tell their company's story at events and roundtables, and surprise them with gifts outside of when their contract is up for renewal.

Related: Why Customer Champions Need to Be a Part of Your Marketing Strategy

Mike K. Tatum

Demand Generation Manager at SurveyMonkey

Mike Tatum is on the demand generation team at Momentive and has spent the past six years helping SaaS companies achieve exponential growth. He built a demand-generation system at Kinsta using HubSpot that resulted in a 1,170 percent increase in new customers per month.

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