Word-of-mouth marketing is by far the most cost-effective form of advertising a business can have. Statistics demonstrate that the average person has at least 350 people in his sphere of influence. Granted, the average person is not going to talk about your business to all 350 people they know, but having them talk positively to even one can translate into a powerful, free ad that has a great return potential for your business. A friend telling a friend or acquaintance about your business is a bit like pushing a snowball down a hill. One friend tells another, who tells another, who tells another and soon, you've gained a valuable customer or two.
The psychology of affiliate marketing
Think about it. Would you be more likely to go to a new restaurant you saw advertised in your local paper, or go to a new restaurant recommended by an acquaintance or friend? Most people choose friend. Why? Even in an acquaintance-type relationship, there is a level of trust that has already been established. There is psychological value that stems from getting information from another person. We tend to believe that "real" people have our best interests at heart. Enter affiliate marketing. Affiliate marketing can be likened to word-of-mouth marketing via the internet. Although this is not strictly the case, there are similarities that do exist. Affiliate marketing is a marketing practice in which a business rewards people and/or other entities for creating customers or sales for that business via affiliate's marketing efforts. In essence, the affiliate is spreading the word about a company's product or service, usually using the internet.
Capitalizing upon word-of-mouth marketing
Referral fees have been standard in business practice for years. Affiliate marketing simply capitalizes on the concept, while expanding it to a world-wide marketplace. It's the electronic commerce version of the traditional agent/referral fee with a twist. Businesses have taken the concept of revenue sharing and answered the question, "What's in it for me?" Because you no longer have to be a marketing or advertising executive with a degree and a slick campaign to cash in on the World Wide Web, companies now have access to an affiliate's sphere of influence - an affiliate can be anyone with time, access to a computer, and a passion for promotion.
Affiliate marketing could be viewed as taking word-of-mouth marketing to its outer edges. Often times, an affiliate marketer has what could be deemed as an acquaintance-type relationship with the person to whom he is promoting a product or service. This means the affiliate has attracted a database of warm leads who are looking for a particular type of product or service. Because of this "soft" relationship, affiliate marketing may seem to be less of a "sales pitch" to the consumer than traditional types of advertising. While this is not actually the case, it shows that affiliate marketing with its word of mouth twist is highly effective.
Copyright (c) 2008 Christian Fea
Word Of Mouth Promotion
Tom "Big Al" Schreiter, for example, has taught for years that recommending your product or business is like recommending a restaurant - only you don't get paid when you're recommending the restaurant.
While network marketers do speak to others about their wares, the 95% drop out rate in NM tells me that the "words of mouth" in NM are somehow not the same. People everywhere still recommend restaurants, movies and a host of other things to friends, but most network marketers have given up recommending their wares long ago.
What's the story here? Why the wildly different results?
Word of mouth and NM are both the same and not the same. Same in the sense that people talk to each other about things in both. But there the similarity stops.
Many marketers (not just network marketers) have latched onto the phrase word of mouth because it has been the most effective means so far to market products.
Here's how it's defined in Wikpedia: http://en.wikipedia.org/wiki/Word_of_mouth
"Word of mouth (WOM) is the passing of information by verbal means, especially recommendations, but also general information, in an informal, person-to-person manner, rather than by mass media, advertising, organized publication, or traditional marketing...
Word of mouth promotion is highly valued by marketers. It is felt that this form of communication has valuable source credibility. People are more inclined to believe word of mouth promotion than more formal forms of promotion because the communicator is unlikely to have an ulterior motive (ie.: they are not out to sell you something)...Also people tend to believe people that they know." (Emphasis added.)
In his eye-opening book "The Tipping Point ( http://www.bananamarketing.com/library.html ), Malcolm Gladwell discusses those people ("Connectors" and "Mavens") who start word of mouth discussions that create major marketing successes.
"What sets Mavens apart...is the fact that [they] want to help, for no other reason than because they like to help. That turns out to be an awfully effective way of getting someone's attention."
He then brings up Paul Revere...
"News of the British march did not come by fax, or by means of a group email. It wasn't broadcast on the nightly news, surrounded by commercials. It was carried by a man, a volunteer, riding on a cold night with no personal agenda other than a concern for the liberty of his peers..."
And last, he gives a restaurant example..
"And why are the Zagat restaurant guides so popular?..Their real power derives from the fact that the reviews are the report of volunteers - of diners who want to share their opinions with others. Somehow, that represents a more compelling recommendation that the opinion of an expert whose job it is to rate restuarants." (Emphasis added.)
The difference, it appears, is in the motivation. Love? Or money?
In network marketing, many people DO love their products; so for them, that part of the word of mouth works. But then, when they come to the money part - the part where the listener finds out the speaker is selling it or benefitting in some material way when the other buys - that's the moment the word of mouth spell is broken. The trust has gone. The relationship has been abused, ( http://kimklaverblogs.blogspot.com/2006/04/who-else-wants-to-abuse-their-friends.html" ) according to tens of thousands of people.
Two suggestions for network marketers:
1. If in your soul, you feel this difference between marketing and word of mouth like I do, stop telling prospects that NM is like recommending a restaurant. And don't nag your people about going to their friends. It likely means they too, have discovered this difference first hand. Most people would rather keep their special relationships. It's not worth it to them to risk friendships by selling to their friends. (See Stella's story: http://www.bananamarketing.com/paperback.html in If My Product's So Great, How Come I Can't Sell It?)
2. Train your folks to ALWAYS tell up front that they are marketing the product they're talking about. FIRST thing, before the gushing starts. I don't know of anyone, anywhere, who wouldn't rather buy from someone who loves their product line, who uses it, and who wants to make a difference in the lives of others by spreading the word. We ALL buy stuff anyway, so that's not the problem. Just don't hide it. You have to reveal it at some point. So why not do it up front?
Both Christian Fea & Kim Klaver are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Christian Fea has sinced written about articles on various topics from Partnerships, Joint Venture and Business Plan. Christian Fea is a Collaboration Marketing Strategist. He empowers business owners to discover how to implement Integration, Alliance, and Joint Ventures marketing tactics to solve their specific business challenges. He demonstrates how you can create you. Christian Fea's top article generates over 22200 views. to your Favourites.
Kim Klaver has sinced written about articles on various topics from Marketing, Water Filters and First Date. . Kim Klaver's top article generates over 301000 views. to your Favourites.
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