What is Word of Mouth Advertising?

J. S. Petersen

Any time someone recommendeds a product to a friend, he or she has engaged in word of mouth advertising. This type of advertising relies on personal recommendations to promote a product or service. Companies often rely heavily on it to sell a product or service, because it produces good results at a very low cost.

People may be paid a small amount to recommend businesses to friends and family.
People may be paid a small amount to recommend businesses to friends and family.

Companies value word of mouth advertising for several reasons. First of all, if a consumer tell someone how much he likes a business, that endorsement doesn't cost the business any money. Magazine, television, radio and Internet ads can be expensive, but word of mouth advertising is usually free. The less money the business has to spend on advertising, the more profit they can make.

A testimonial from a friend can be a trusted form of advertising.
A testimonial from a friend can be a trusted form of advertising.

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Word of mouth advertising is also valuable because it tends to produce good results. People are sometimes skeptical of standard advertising. Maybe the ad doesn't appeal to them personally, or they feel like the company is trying to trick them into buying a product that they don't want. A testimonial from a friend can be trusted, and it's more likely to produce results.

Spreading rumors about a company can be negative word of mouth advertising.
Spreading rumors about a company can be negative word of mouth advertising.

Even more valuable are the word of mouth endorsements given by people who are presumed to be experts. Companies often offer free products or services to experts in an effort to gain free word of mouth advertising. Reviewers are sent products, or given early tickets to a movie for example, and the advertising that is generated when they write a review more than pays for the expense to the company.

Word of mouth advertising relies on social groups.
Word of mouth advertising relies on social groups.

It is often said in business that any publicity is good publicity. That is because publicity is essentially word of mouth advertising. If someone hears something about a business, even if it's something bad, they will remember the name. They will likely be curious about the business because of the news. Any time someone hears about a company and what they sell from a friend or from a news story, word of mouth advertising is helping the company become more familiar to people.

Companies sometimes encourage word of mouth advertising from their current customers. They may offer referral bonuses to current customers who bring in new clients. They may hold contests that get people talking about the prizes that can be won. Other businesses hold charity events or other acts of public service. Anything that gets people talking about a company is free advertising, and all successful companies know that free advertising can't be beat.

People may recommend the services of others by means of word of mouth advertising.
People may recommend the services of others by means of word of mouth advertising.

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Discussion Comments

Sunny27

Sunshine31- Another very effective word-of-mouth strategy involves the use of endorsements.

Many times popular celebrities are featured in advertisements in order to sell a product or service.

For example, it is a tradition that some of the gold medal winning athletes, from the Olympics are featured on the cover of Wheaties cereal box.

This creates new buzz for the cereal and often enhances its profits and sales.

sunshine31

Bhutan- Regal Cinema's website allows feedback on its site regarding various films that patrons have seen.

This feedback sometimes influences a potential customer from seeing a movie or not. For example, if enough people respond that they did not like a movie many may not take a chance and watch that movie.

In addition to Regal Cinema also provides feedback regarding the facility itself.

Bhutan

Cafe41- I agree. I think that many people want advice on which restaurants to frequent as well as where to get the right haircut.

Sometimes word-of-mouth strategy can even be linked to the company's website. For example, a company can last all of the feedback that it's received from previous patrons.

If enough positive information is listed from enough customers there is a higher likelihood that a new customer will try the product or service.

cafe41

Word-of-mouth promotions create buzz for a product. Most of the social media campaigns usually offer a strong emphasis in blogs in order to promote products or services.

The use of major social promotion media networks like Facebook are used to get people interested in a new product. Many times the use of testimonials often come into play.

Word-of-mouth strategy is most effective in the restaurant industry, the salon industry, and basically any service related industry.

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