While some businesses devote large portions of their budget to paid advertising to spread their message, other businesses forgo those expenses in hopes of getting those who use their products and services to share their story for them.
Your customers are your business's greatest asset
Word-of-mouth advertising has become increasingly important in today's age where a growing number of consumers are placing their trust in online reviews when deciding where to spend their money. Research shows that word-of-mouth marketing drives $6 trillion of annual consumer spending and is estimated to account for 13 percent of all consumer sales.
Melanie Perkins, CEO of Canva, knows just how valuable a successful word-of-mouth advertising strategy can be. Since launching in 2013, Canva, an online design and publishing tool, has grown to more 15 million users across 190 countries, with more than 1 billion designs created, all thanks to word-of-mouth advertising. Canva never used paid advertising campaigns, instead relying on organic distribution of their messaging.
We recently spoke with Perkins about the benefits of word-of-mouth advertising, the challenges associated with it and how to make these campaigns successful.
Q: What is word-of-mouth advertising?
A: Word-of-mouth advertising is when your customers love your product so much, they feel compelled to tell their family, friends and colleagues about it.
Q: How do you make this type of marketing campaign successful?
A: Our success at Canva wasn't about launching gimmicky 'campaigns.' We knew that if people loved the product we created, they would naturally spread the word and tell all their friends about us. This is why we built Canva to be super valuable right from the start.
We offer a simple, user-friendly and intuitive design solution, without asking people to spend hundreds of dollars and time grappling with complex and expensive software. Those who've tried Canva were surprised by its ease of use and that it's too good to keep secret. And that's what happened. Word of mouth spread like wildfire and, today, we're in more than 190 countries with over a billion designs created since we launched five years ago.
I think one of the most critical things to ensure when you are devising any campaign – is this something of real value that you'd proudly promote to someone you care about? It's less about games and gimmicks and more about ensuring that you are providing something really valuable. We live in a world where we have access to a multitude of communication channels, so it's really about giving people something awesome to talk about.
Q: What are the biggest advantages of word-of-mouth advertising?
A: When someone we trust is willing to go out of their way to share their experience, we're more likely to believe in their recommendation. Positive recommendations need to be earned. It's not something a company can spend huge bucks to buy, which makes every positive rating even more credible and valuable.
Q: What are the biggest challenges for a word-of-mouth ad campaign?
A: Perfecting word-of-mouth advertising is no different than running a good business. You want to create a product that solves a problem that a lot of people care about. You want to build a service that is so good that your customers want to tell everyone about it, and you want to go over and above expectations with a little more TLC so their experience is so special they want to come back for more.
When we launched Canva Print, we spent time perfecting the packaging to ensure that when people opened their delivery for the first time, they'd have a surprisingly delightful experience. There's a beautiful quote on the inside cover of the delivery box, there's a little 'thank you' card, and there's crimped recycled paper ensuring your prints stay safe during transit, and it's all laid out in a way that's very photogenic.
We've seen a lot of our community post a photo of their delivery on social media about how happy and impressed they were when they received their order. It certainly takes work to craft a great experience, but it's worthwhile.
Q: How do you determine if your advertising efforts are working?
A: When people try Canva for the first time, they are amazed at how their creativity can be unleashed and that they can create an amazing design in minutes. This has generated a lot of love and word-of-mouth growth. When we first launched Canva, we had 90,000 people sign up within the first couple of months, without putting any paid advertising campaigns behind it. It has been incredible to see people respond so well to something we have worked so hard on for so many years.
Q: Can you combine word-of-mouth advertising with paid advertising strategies?
A: In most businesses, it's critical that your customers are loving their experience with your company. Not only will they tell others about it, but they'll come back more often. There are very few businesses that can survive without it. Perhaps some of the few types of businesses that can are cafes in tourist areas with heavy traffic. They don't expect anyone to return and because there is an influx of new visitors every day, they can rely on their location while having average food and service. I don't think that's most businesses goal. Of course, paid channels through a lot of other measures can complement this.
Q: Are certain businesses better suited for word-of-mouth advertising?
A: There are lots of factors involved in creating a business, and the most fundamental is solving a genuine problem a lot of people struggle with.
There're certain things you can do when you are thinking about your product or service to help gear it up to grow more rapidly through word-of-mouth, such as:
- Solve a problem that a lot of people care about.
- Think about something valuable that you can give away for free.
- Choose your first audience wisely. It's often good to choose your initial target market who has the strongest and most frequent need for your service.
- Create a product or experience worth talking about.
Q: What piece of technology could you not live without?
A: My iPhone. I like to stay connected to my team and enjoy reading feedback from our design community. My favorite hashtag is #canvalove, which people use to communicate how Canva has changed their lives. When I hear about a nonprofit that used Canva to raise money or a small business that is able to market their product, even a sheriff that used Canva to create wanted posters, it reminds me why we got started.
Q: What is the best piece of career advice you have ever been given?
A: You get an incredible amount of advice as a startup founder, so you learn early on whom to listen to and how to assess feedback to make sure it's right for you. For me, this is also about recognizing your locus of control: a person's belief about how much they can control the events around them.
Do you take control of the things you can control, or do you blame external factors for your success or failure? I think this has really shaped the way I look at the world; I spend all of my time improving the things that I can change and don't worry about the things that I can't change.
Q: What's the best book or blog you've read recently?
A: I learned a lot from reading a book called, Designing the Obvious, by Robert Hoekman, which I came across early on in our Canva journey. It explains how to create apps and online experiences that people will find easy, intuitive and enjoyable to use. I recommend it often because of how much it helped hone my thinking.
Q: What's the biggest risk you've taken professionally? Did it pay off?
A: I was studying communications, psychology and commerce at the University of Western Australia but dropped out to build my first company, Fusion Books. My first startup was bootstrapped, so I learned a lot about how to build a real business with short timelines. We had to become profitable quickly, or we'd have no company. A lot of what I learned then I still use at Canva today.
Q: As a leader, what's the biggest challenge you face?
A: My job has changed dramatically from when we were just a very small team of a few people to a team of 500+ today. And I expect it will change even more dramatically when we are thousands of people.
We hire people across many different areas, from incredible engineers to marketers, designers and operations. In each of the areas, we hire the very best people in the world. Every single person on our team brings different talents and skills, and I see it as my job to help people to do their best work.
There's a great analogy from Molly Graham who led Facebook's early growth and saw her team jump from 25 people to 125 in just nine months. She likens it to the feeling of giving away Legos as a kid. It's a fantastic analogy for what it feels like working in an organization that is changing rapidly.
Realizing along the way that I needed to pass along my work to other people who can do an even better job at particular things has definitely been something I've needed to get used to. At first, that process feels uncomfortable, but I quickly realized how valuable it was and that the only way to build a big, awesome company is to have amazing people that are so good that they intimidate you.
Now, with a whole team of amazing people, everyone is pretty intimidating but equally friendly and awesome, and, together, it feels like there is little we can't achieve.