Word-of-mouth marketing (WOM marketing) is when a consumer's interest in a company's product or service is reflected in their daily dialogs. Essentially, is it is free advertising triggered by customer experiences — and usually, something that goes beyond what they expected. Word-of-mouth marketing can be encouraged through different publicity activities set up by companies, or by having opportunities to encourage consumer-to-consumer and consumer-to-marketer communications. Also called referred to as "WOMM" or "word-of-mouth advertising," WOM marketing includes buzz, viral, blog, emotional and social media marketing.

Breaking Down Word-of-Mouth Marketing (WOM Marketing)

Word-of-mouth marketing differs from natural word-of-mouth references to a company's products and services in how it may come as the result of a promotion, encouragement or other influence by a company, otherwise known as "seeding." When a diner has a wonderful time at a restaurant because their expectations were exceeded and later tells tweets about it, or when someone had a great experience using a product in a new way and tells everyone they know about it, those are examples of word-of-mouth marketing. Also, word-of-mouth marketing does not stop at the first interaction; it tends to lead to a cascade of follow-on interactions.

The encouragement on the part of a company may take one of several forms. The best way is to give them a reason to talk, such as exceeding expectations or providing insider skills or information about a product. Other strategies include offering consumers new ways to share information about a company's products and services, and engaging and interacting with the consumer, such as through exemplary customer service. This is especially valuable with social media-based customer service, which provides for seamless sharing and promotion.

Efficacy

According to Nielsen, in 2012, consumers around the world said they trust recommendations from friends and family (earned media) above all other forms of advertising. That represents a rise of 18% from 2007.

Consumers are more emotionally bonded to a company when they feel they are listened to by the company. That is why many companies will have sales representatives discuss their products and services with consumers personally or through a feedback phone line. This kind of interaction, as well as promotional events, can stimulate conversations about a company's product.

There is significant temptation to fabricate word-of-mouth marketing. Accordingly, the Word of Mouth Marketing Association (WOMMA) has crafted a code of ethics for the industry, the best word-of-mouth marketing strategies are "credible, social, repeatable, measurable and respectful" and there is no excuse for dishonesty. WOM marketing expert Andy Sernovitz has boiled down WOMMA's code of ethics into three key rules to avoid issues:

  • Say who you are representing (always disclose a relationship)
  • Say only what you believe (be honest with an opinion)
  • Never lie about who you are (be honest about your identity)