WOM 5,000 Times More Effective Than Advertising
By: Bonnie Kotch | Posted: 02nd March 2006
I read a news story recently that at a conference, studies showed that WOM (Word of Mouth) Marketing is 5,000 times more effective than advertising. This doesn't mean that everyone starting a business should go back to the days of inviting your neighbors and family over for a circle drawing presentation to explain the benefits of getting involved in their venture, but the studies were very interesting:
In the studies conducted, they found that that people take action in 1 of 15,000 ads they view (be it T.V., newspaper, publications or online), while consumers take action in 1 of every three recommendations they see as a result of Word of Mouth. This makes WOM 5,000 times more powerful than conventional advertising. Why?
Business matchmaking is quickly beginning to pick up in the U.S. but it's not a new concept at all. It's been more widely and openly practiced in other countries, but until affiliate marketing made its appearance with Amazon.com's profit sharing program, it wasn't fully appreciated until such public success made this method of marketing so visible.
Possible competitors began reaching out to each other as they narrowed their niche markets, making behind-the-scenes-deals to endorse each other. New business launches sought the client bases of complimentary companies in exchange for a percentage of the profits . . . does any of this sound familiar?
Such heated competition in business over the generations have resulted in the massive and sometimes malignant growth of monstrous corporate conglomerates at the deprivation of smaller, more consumer friendly businesses. However, partnering up is not just for the big brothers anymore.
Smaller businesses, startups and even sole proprietorships out of the home of the owner are learning to leverage relationships with other, more established small businesses. This accomplishes many things for both partners, most apparent, a mutually beneficial and profitable venture: The startup business receives endorsement and access to a new client base, and the more established business expands it's services and profits by including and offering that of the startup business. They partner and both profit while increasing consumer loyalty and services.
Jumping on this growing marketing trend are now services that help businesses and start ups find beneficial partners . . . a dating and matchmaking services for businesses if you will.
One such service which caters to start up companies, is Trinity Affiliate Marketing Review. This service, which I started putting together a year ago appeals to people just starting out and need help with getting their product, service or web site launched and promoted. It also helps affiliate marketers find other affiliate marketers with similar, yet complimentary products to partner up with. The benefit of the system is not only the joint venture aspect of marketing, but encompasses business start up tools, resources, tutorials, and a forum community where more than one business can get together to form mutually beneficial relationships, endorse each other to their circles of influence, trade recommendations, resources and more. Those with great ideas but don't know the first thing about web site building or how to write an ad can agree to partner with someone who does with an agreement to share the profits. There are endless examples of asset and skill sharing.
Matchmakingforbusiness.com, which has yet to launch, is owned by Joyce Swartz, who was a long time AOL forum owner with over 2 billion in partnerships negotiated between major companies such as AT&T. Catering to slightly larger and more established businesses, her expertise in market sharing between businesses will still be a help to start ups.
Other more tightly-niched services, such as Directory of Ezines, offers ad sharing between publishers of online e-zines and newsletters to benefit the marketing side of business development.
Web hosting and web management tools across the web offer free services by allowing customers earn by referring others to their services.
Affiliate marketers are learning to expand their customer base by sharing ad space or newsletter endorsements.
Not only does this benefit the bottom line, but it is socially enriching and rewarding. Doing business especially online can be somewhat isolating.
Using business matchmaking also benefits the consumer by making available information from a trusted source that they might not otherwise have benefited from. Because companies want to keep their good relationship with their customers, will be discriminate on who they recommend. This is good for the consumer market in general.
The best benefit of all is the ability for talented, hardworking people who have fantastic ideas, but no budget to find a business partner or match that needs their fresh ideas. And they are readily accessible online. The statement "In business for yourself, not by yourself" is true, if you just have confidence in your idea and seek the help you need. It's available, if you can find the right benefactor.
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Tags: word of mouth, small businesses, many things, new business, amazon, startups, word of mouth marketing, niche markets, sharing program, affiliate marketing, news story, generations, sole proprietorships, matchmaking, profitable venture, startup business