Why word-of-mouth works wonders

Viral marketing is the process of implementing means through which the knowledge of your existence self-propagates. Like a virus, your visibility spreads throughout a network of people who refer you to each other. Unlike unsolicited advertisements or "spam," which usually stops once it reaches its destination (and the reason spammers must keep spamming in order to remain successful), viral marketing continues to spread almost effortlessly since the people who refer you to others know each other. Also, those who get to know you (or to know about you) through third party referrals grant you a higher level of confidence, credibility and loyalty.

Word-of-mouth advertising is crucial in the offline world. Online, referral or network marketing (as they are commonly known) is vital. Why? The key to marketing success in the offline world is "location, location, location." The Internet is no different. In other words, your marketing success depends highly on the number of locations you appear -- places on which your site, link, company or product name exist. In essence, it is to be in as many places as possible, talked about by as many people as possible and seen by as many eyeballs as possible. Success online is all about "location" too!

Remember a dictum a mentor of mine once told me, which is: "Implication is far more powerful than specification." In other words, if you tell people you're the best, that you're the leader in your field, or that your product is the best solution to their needs, your self-serving promotional bias makes it all suspect. Your statement is rarely believable at face value. And if you do make such claims, you will have your work cut out for you in order to prove them.

However, if someone other than you says to another that you are indeed the best or that you do have the best solution to their problems, how much more believable will that person's statement be? How much more credible? The answer is "definitely more." Accordingly, referrals and networking systems are not only important because they create an awareness of your business (or because they create traffic in the online world), but also they are important to the degree to which third party marketing indirectly communicates greater credibility, superiority and value of the products or services you offer.

In his new book (which I highly recommend) "The 22 Immutable Laws of Branding," Al Ries stresses the importance of leadership and how that leadership is communicated. According to Ries, people never buy the best -- they only think they do. They usually buy the leader (or what they perceive as being the best). And that perception is often molded by what they are told and by what others do, not by what is fact or by what is being advertised.

Coke, for example, outsells Pepsi. But according to Ries, taste tests reveal that Pepsi is the better tasting brand. So, why does Coke still beat Pepsi in sales? It is not because it is the leader in the marketplace or promoted itself as such but because it is known as the leader.

Coke was the first cola "in the mind" of the marketplace and thus the one most talked about, even to this day. When a person is introduced to cola for the first time, he or she is often told to try Coke. People in restaurants still refer to the word "coke" as the generic name for colas, even when only Pepsi is served. Why is that? While other colas are bombarding them with marketing messages, people have heard of Coke first and most likely from other people.

Consequently, if your business or website is unique, focuses on a niche or is the first in some category, the knowledge of your existence will spread quite naturally, almost like wildfire. But creating systems and using specific tools that will leverage the spreading of that message helps to multiply your marketing punch exponentially. Such tools stimulate word-of-mouth advertising, which is more effective than general advertising. For along with communicating your existence to the world, word-of-mouth advertising helps to cast that aura of leadership and superiority.

Networking systems, for example, include strategic marketing alliances, joint ventures, and affiliate programs. Online, they are often called referral traffic generators. And unlike the more traditional traffic generators such as banners and search engines, these specific tools are much more effective since they are used by third parties and not by the original advertiser.

In fact, referral traffic generators are key ingredients of online success. A great example is a referral service like the one recently launched by my associates at "Internet Marketing Challenge" (the publishers of the "Chronicles" ezine of which I am the editor). This service is based on this viral marketing concept (visit ../forms/referral.htm).

Nevertheless, if you received a call, letter or email from someone you know (and especially trust) referring you to a particular company, how much more credible will that referral be when compared to a blatant advertisement coming from the company itself? You got it… More. Much more.