What is word-of-mouth advertising? Remember that great movie your friend saw or the amazing Christmas gift that your sister bought - didn't you go see that movie or shop at the same store that your sister did? Well, that, in essence is word-of-mouth advertising! To put it in simple terms, it is what goes from person to person – if you like a product, you are sure to tell your friend about it.

Word-of-mouth is second only to strong branding when it comes to building consumer trust. It is so powerful as to almost create an awareness campaign about your business. For a new business, word-of-mouth marketing is often the best and most effective advertising method. There are many things entrepreneurs and business professionals can do to generate positive word-of-mouth for their business.

Read through the list we've created for you and go ahead; make your business the talk of the town!

o Recruit friends and family: Who better to support your cause than your family and friends? Talk to friends, family and neighbors about your business. Give them pertinent information about what it is you are doing. Invite them over to your office or store so that they can see for themselves how the business is shaping up.

o Create visibility: Be active in your local community by participating in various networking groups and/or professional associations. By increasing your own visibility, you are drawing attention to your business.

o Generate referrals: Develop relationships with businesses that have clients with overlapping or similar needs. An example would be the case of a lawyer, an accountant, a financial planner and a banker all working together and referring each other as need be. This also ensures that they don't encroach upon each other's territory.

o Leverage your website: Get on the Internet! Create a website for your business. Zero in on what it is you want the viewer to do – purchase a product from you, read information, gain knowledge – and design your site accordingly. Make your website user-friendly and easy to navigate through and keep the information updated.

o Give freebies: Who does not like to get something for free? Small take away items that people can use work as a wonderful reminder of your business. For example, if you are a real estate agent, you can give away calendars designed on the theme of homes and interior design, with your business information printed on it.

o Distribute promotional literature: Use brightly colored fliers and brochures to publicize your business. Leave them where your prospective customers are likely to find them. For example, leave fliers for a floral business in restaurants and beauty parlors or brochures about your landscaping business in nurseries and garden supply stores.

o Focus on customer service: Ultimately, it is how treat your customers that will determine if your business will be a success. There can be no better advertisement than a satisfied customer. If you want your customers to spread great word-of-mouth, the entire customer experience encompassing the products, service, interaction and follow-up, must be a source of delight. Remember, a happy customer generally talks to three people, whereas an unhappy one talks to eleven!

In a nutshell, word-of-mouth advertising is about building trust and cultivating relationships. The more referrals you get from those who know and trust you, the bigger the customer base you can build.