Why word-of-mouth is marketing nirvana

Why has generating word-of-mouth buzz become so popular among marketing strategies in recent times?

One-word answer:


Read on to understand why you should get on the band wagon ASAP.

Exponential growth

Technology advancements have made it possible for us to spread the word about our products at the speed of light. There is a plethora of examples of products that have been able to exponentially generate a buzz via word-of-mouth, leading to, at times, exponential growth.

Dropbox is a champion of word-of-mouth based marketing. They used a freemium model to get people to use their product and then offered a great incentive (more storage space) when a user referred the product to a new user. With the incentives appropriately aligned, each user now effectively turned into a word-of-mouth advertiser for the product. This led to their famous exponential growth during the crucial early stages of the company, and eventually to their current annual revenue of over $1 billion.

Here are the ways in which word-of-mouth, when done right, outdoes traditional advertising alone:

More Persuasive

GEICO made one of the most popular TV ads in 2019: https://lnkd.in/evvc4TY. Yet somehow every time I feel like changing my car insurance provider I ask a friend for advice.


While I’m now more than 50% sure that GEICO is a legitimate choice…

I’m also 100% sure that GEICO is only going to talk about how great GEICO is. My friend isn’t.

While a TV commercial will only say great things about the product or company, our friends are much more credible and are likely to tell us both good things and bad things from their experiences using products.

More Targeted

When you used Dropbox for the first time and were incentivized to tell your friends about it, you probably told the friends that would get the most value out of it rather than just everybody you knew. We are always looking to build our social currency and the best way to do this is by offering up useful pieces of information to people who would get value out of it. We target the things we say to the people we are talking to, much unlike a TV commercial or the front page of a newspaper, which are targeted at literally everyone. Word of mouth naturally extends towards targeted sharing of the news, experience, and values of your product.

While word-of-mouth marketing can be extremely powerful when done right, for different products there are different ways of getting people to talk about you.

Dropbox and Facebook were born in universities and they relied heavily on college chatter to spread the word. Data center technologies, like VMware, rely on channel partners and a presence in the field to generate a buzz. Several other products rely on TV commercials. While TV ads create brand awareness that is important for creating trust and keeping the brand at the top of the audiences’ mind, generating word-of-mouth is a great way to get the potential customer to the point of purchase.

Don’t waste any time before you start looking for a word-of-mouth strategy for your product! For more great examples, pick up a copy of Jonah Berger’s classic, Contagious.

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