Word of Mouth – Personal recommendations from satisfied customers to prospective customers

The easiest way to remember word of mouth is to recall that it is a physical action that takes place in person. Someone is speaking words about a product/service from their mouth (word of mouth) directly to you. 

This differs from an advert on television or in a magazine.

Word of mouth is a form of organic marketing (not paid advertising/promotion), in which customers share their experiences with a product or service with others, i.e. face to face interactions. This can be positive or negative. Positive word of mouth is considered to be one of the most effective forms of marketing and is what all companies strive for. The reason why companies want their customers to be spreading the word about their business in a positive way is because it is the most trusted way of receiving information about a product or service amongst potential customers. The satisfied customer is not being paid to promote what they’re recommending, which makes it more meaningful compared to a paid advertisement.

In modern times, with the rise of social media, word of mouth has been applied to consumer reviews and comments as well. Although this wouldn’t carry the same credibility as someone speaking to you in person, they can have a huge effect on sales.

Here are some ways that businesses can encourage word of mouth marketing:

• Provide excellent customer service – When customers have a positive experience with a business, they are more likely to tell their friends and family about it.
• Offer incentives – You can offer incentives for customers to share their experiences, such as discounts, free products or gift cards, although this can be seen as insincere if they are clearly doing this for a reward.
• Create a buzz – You can create a buzz around your business by hosting events, launching new products and running contests.
• Produce great quality products and services – This is the most important element for a business if they want to gain word of mouth marketing, as customers will want to share excellent products and services with their friends and family.
  
  

Below are examples of companies that have benefited greatly from word of mouth:

Tesla

Tesla has a marketing budget of $0. They don’t do billboards, magazines or television promotions for their car. People who refer Tesla to friends, who subsequently purchase a car while using their referral code, receive free entry into a lottery for a chance to win a tour of Space X’s headquarters. The person with the most referrals in a region of the US will win a new car. This has been highly successful.

Netflix

Netflix helped to get social media talking about their new Netflix series in 2022 called Squid Game. Squid Game was brought to many people’s attention by family and friends and strangers online who couldn’t stop talking about it. Countless news feeds on social media platforms such as Twitter, Facebook, Instagram and TikTok were promoting the show. No paid ad campaign could have ever reached the level of success that Squid Game did through word of mouth alone.

Red Bull

Red bull makes word of mouth publicity a fundamental strategy for their success. The brand sponsors crazy extreme stunts that people on social media cannot stop talking about. Even long after the event, Red Bull rely on people continuing to talk about them, creating more awareness of the brand.