Word-of-mouth marketing is most often relied on when budgets are a marketer's chief constraint. It is, in fact, one of the few forms of marketing you can employ without writing a check to anyone.
Even when funds are plentiful, there are other situations that call for word-of-mouth. "At the beginning of a business is one situation because you have no reputation and there is no word circulating, so you have to start from scratch," says Ilise Benun, publisher of The Art of Self Promotion, a quarterly newsletter for small-business marketing based in Hoboken, New Jersey. "Word-of-mouth provides an opportunity to begin a reputation, and you're in control."
For certain markets, word-of-mouth may always be the prime marketing mechanism. Doctors and lawyers, of course, rely heavily on word-of-mouth, partly because these professions have long frowned on advertising but also because consumers tend to select professionals based on personal references. The same is true of hairstylists, housekeeping services and other personal-service providers.
Other industries use word-of-mouth for different reasons. Movies live or die by what people say about them, despite multimillion-dollar advertising budgets; the same is true of other entertainment-related products, such as nightclubs, restaurants and catering companies. "There are certain things people tend to talk about more," Wilson explains.
Word-of-mouth marketing expertise may be essential for entrepreneurs who sell their goods and services in other countries. Many of the most rapidly growing markets worldwide are in societies where the mass media is not as well-developed as in industrialized countries, says Cafferky.
For instance, Cafferky has had extensive experience marketing in Romania, where broadcast television is not nearly the force it is in the United States. An effective word-of-mouth campaign in that country takes on extreme importance.
"Any person or organization involved with international marketing had better understand word-of-mouth," Cafferky warns, "because that may be all they have to use."