The Word-of-Mouth Marketing Strategy

The traditional definition for Word-of-Mouth is oral, person-to-person communication perceived as non-commercial by the receiver regarding a brand, product or service. Electronic communications add a new dimension to Word-of-Mouth, as customer feedback can instantly reach thousands across the world.

Efectiveness

As consumers become more cynical about paid publicity, word-of-mouth becomes more believable and influential than other marketing devices. Through word-of-mouth marketing, the customer becomes an unpaid advocate with high credibility. On the other hand, marketers must keep in mind that they cannot control the exact message expressed through word-of-mouth channels, so it is not the best strategy for all marketing applications.

Cultivating word of mouth

Some word-of-mouth marketing will arise naturally from current or former customers satisfied with their experiences. However, it is also possible to manage customer-to-customer communication proactively by equipping those willing to participate to start conversations about the product to generate interest. For example, you may provide samples and information to selected customers.

Opinion Leaders

In proactively-managed word-of-mouth strategies, it is not cost-effective to send samples and information arbitrarily in hopes that some of the recipients become advocates for your product. It is more sensible to identify key influencers for a given target market or lead users for a given product, so marketing resources are focused on those more likely to influence the attitudes and behaviours of their peers.

Viral Marketing

Word-of-mouth marketing is more relevant than ever as of 2010. There are many more venues for consumers to share their views, concerns and experiences with others all over the world. Viral marketing, closely related to word-of-mouth, embeds a marketing "payload," or informational or branding materials, within an engaging "host," such as an online commercial or website. The combination of a payload has the potential to become viral with the addition of an exponential reproductive mechanism, like a button for forwarding the video to the viewers friends.

Negative word of mouth

Since word-of-mouth is not under direct control of the marketer, a dissatisfied customer can become a source of negative advertisement. Negative messages tend to have a more powerful impact than positive ones, given dissatisfied customers are more likely to share negative reviews than satisfied ones. Fortunately, it is likely to recover a customer following service failure with exceptional service thereafter, making it cost effective for a manager to invest more to recover dissatisfied customers.

References

• Marketing Science; Firm-Created Word-of-Mouth Communication-Evidence from a Field Test; David Godes and Dina Mayzlin; 2007
• Journal of Strategic Marketing; Word-of-Mouth -- Understanding and Managing Referral Marketing; Francis a Buttle; 1998
• Management Science; Online Consumer Review -- Word-of-Mouth as a New Element of Marketing Communication Mix; Yubo Chen and Jonhong Xie; 2008