To a marketer, word-of-mouth is what people say about your business as they go about their daily lives. It happens when one friend tells another, "You should check out that new restaurant downtown. The food's great!" It happens in a negative way when another diner complains, "Stay away from that new place on a Friday. You'll never get a seat!"
Though it may seem inconsequential, word-of-mouth can make or break your business. "Word-of-mouth carries an implied endorsement by the person who said it," says Art Davies, president of Impact Solutions Inc., a two-person Cincinnati sales agency that relies heavily on word-of-mouth. "When you have other people talking about you, it carries weight."
Another name for word-of-mouth marketing is opinion leadership, and today, everyone's a leader, according to Keith Tudor, chair of the marketing department and an associate professor of marketing at Kennesaw State University in Kennesaw, Georgia. "Everyone is an expert in some area," explains Tudor. "And that's one of the strongest influences on consumer behavior."
As a marketing form, word-of-mouth is distinct from any other. Unlike print advertising or direct mail, it primarily uses the spoken word--although the Internet has made e-mail a potent word-of-mouth medium. Unlike mass media, word-of-mouth is typically dispersed one-on-one from person to person. And unlike discounts, coupons or other cost-based appeals, its appeal is based on one person's respect for another person's judgment.
Even testimonials, word-of-mouth's closest marketing relation, are different in several ways. Testimonials are usually used in paid advertising, says Raphel. Word-of-mouth is unpaid and hence, more believable, he says.
It's also different from networking, where your primary goal is to develop referrals from a group of people with a common interest, such as chamber of commerce members or crafts hobbyists. Networking, says Cafferky, is part of word-of-mouth marketing, but word-of-mouth marketing is concerned with a broader market.
Perhaps the most distinctive trait of word-of-mouth marketing is that, compared to other media, it is poorly understood. While a great deal of research has been done on such arcane marketing techniques as psychodemographics, word-of-mouth marketing has been neglected, says Jerry Wilson, an Indianapolis speaker and marketing consultant who wrote Word of Mouth Marketing (Wiley).
"Very few researchers have tried to do anything formally on word-of-mouth," says Wilson. "As a result, people feel like it's a giant, but it's nebulous and they don't know how to conquer it."
Few things are known about word-of-mouth, besides the fact that everybody can do it and it can be very powerful. With a little thought and some patience, nearly any entrepreneur can put this often-overlooked, one-of-a-kind marketing tool to work.