In today’s current economic climate, most companies are operating under intense pressure and heightened scrutiny to increase revenue and grow profitability, in many cases with a reduced budget and staff. What if there were a proven marketing strategy they could deploy to build their business, year in and year out, regardless of financial instability or competitor pressure? Well, there is, and it’s called word-of-mouth marketing
So, exactly what is word-of-mouth marketing? By definition, this term is used in the advertising and marketing industry to describe activities that companies undertake to generate personal recommendations and referrals for products and services as well as brand names. Essentially, it’s about giving real people a reason to talk about your products and services, and making it easier for that conversation to take place. In other words, think of it as business-to-consumer-to-consumer marketing.
Word of mouth has been described as the world’s best-known marketing secret. Wait a minute! Okay, how can word-of-mouth marketing be both the best known and a secret at the same time? Simply put, practically every businessperson knows how important word-of-mouth marketing can be to his or her bottom line, yet so many businesses do not know how it works or how it can be used to meet their specific marketing objectives.
If word of mouth has been around forever, than why has it suddenly become the fastest-growing form of marketing? Up until a few years ago word of mouth was something that just happened, but now it is something that can be influenced — making it actionable, trackable, and plannable. Today it is considered the most cost-effective means of attracting new customers. To illustrate, the market research firm GfK NOP reports that 92% of consumers today cite word of mouth as one of the best sources for ideas about new products, up from 67% a generation ago. Perhaps the largest benefit of word-of-mouth marketing is the fact that it requires a very small budget and works without us even knowing it. We as marketers simply need to give people something to talk about.
Why is word-of-mouth marketing so powerful? Over the years there have been many reasons given to explain its amazing success. With the emergence of the Internet, consumers now have more product choices and information about these choices than ever before at their disposal. The ease and instant gratification of seeing their words on such consumer review sites like Google, Angie’s List, Yelp!, Facebook, BBB, YellowPages, and other forms of social media such as blogs and discussion groups at the push of a button has sparked consumers’ expressive urge to communicate and spread the word.
So, how can you create a positive buzz about your product or service? As Andy Sernovitz, the co-founder and former CEO of the Word of Mouth Marketing Association, points out in his book entitled Word of Mouth Marketing: How Smart Companies Get People Talking, there are four essential rules to running an effective campaign:
1. Be interesting and generate enthusiasm.
2. Make people happy and get them talking.
3. Earn trust and respect.
4. Make the message easy.
A real-world example of word-of-mouth marketing involves Google’s Gmail service. When Google launched their email service they did not market nor did they spend any money on advertising. Instead they created scarcity by giving out Gmail accounts to only a handful of what they called “power users.” Other users who aspired to be like these special users yearned for a Gmail account, and this generated a bidding war for Gmail invites on eBay. Google created demand by offering a limited supply of e-mail accounts and the privilege of having a Gmail account caused word of mouth, rather than any marketing activities executed by the company.
As Mr. Sernovitz mentioned in his book, word-of-mouth marketing is the most profitable marketing that any company can do. The net impact of conducting word-of-mouth marketing leads to more business, higher return on investment, and lower costs. And, word-of-mouth marketing does more than just make money on new sales, as it makes all of your sales and marketing initiatives more effective.
Word-of-mouth marketing is the most natural method of communication and it should become an integral part of your marketing plan. Traditional marketing methods are becoming gradually less and less effective for more and more companies. So the bottom line for companies in today’s marketplace is to open their eyes to new ways of doing business. ♦
Frank Iacono is a senior Internet marketing manager for Mobile Marketing, a full-service digital marketing agency in the greater Philadelphia area. To contact Frank, please email him at [email protected]