Spread the word

Entrepreneur, Feb, 1998 by Mark Henricks

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."

* LANGUAGE LIMITS

Word-of-mouth isn't the solution to every marketing problem, however. Speed is perhaps its biggest limitation. Compared to other marketing tools, word-of-mouth takes a long time to work. If you want to reach the whole nation really fast, says Cafferky, this isn't the answer.

Quite a while may go by before even a highly effective word-of-mouth campaign begins to bear major fruit. Anderson says entrepreneurs can generate half their new business from word-of-mouth in three years, all of it within five years. "It will help before five years," he says, "but it won't provide a total source of new jobs."

Word-of-mouth also offers very limited control. "When you buy an ad in the newspaper, you can control exactly what is said, when it is said and, to some degree, to whom it is said," says Cafferky. "But the fact is, you just cannot control what and when a consumer says something about your product."

And if your marketing goal is to point out a competitor's faults, word-of-mouth will be of little use. "You can't be negative with it against a competitor," says Davies. "You need to stay positive."

Finally, word-of-mouth is likely to be of limited value in some industries and with some products simply because they're not frequent topics of conversation. "When was the last time somebody told you about some great shoestrings they bought?" asks Wilson. "The mundane things people buy, we don't talk about."

* MIXED MESSAGE

Just as the right word in the right place can work wonders, the wrong word in the wrong place can wreak havoc. For instance, word-of-mouth marketing can be very risky if the message being spread is inconsistent with your other marketing messages.