Word of mouth most powerful marketing tool
May 11 2011
Word of mouth can be a powerful tool for small businesses
Word of mouth is the single most useful form of marketing for small businesses, finds research.
According to a study of more than 200 small and medium sized enterprises by SmallBusiness.co.uk, 36 per cent of company owners rate word of mouth as working best for their company, above other specified marketing strategies.
Advertising (31 per cent) was the next most popular choice, followed by social media (8 per cent).
Sending direct mail (5 per cent), cold calling (3 per cent) and sending email alerts (1 per cent) were the least useful options, according to respondents.
Chieu Cao, co-founder of deal website Huddlebuy.co.uk, says, ‘Successful small businesses quickly learn about their customers and adapt their marketing activities to fit. Many startups have no choice but to rely on low cost and creative means such as word of mouth and social media due to a limited budget.’
Matt Hutchinson, co-founder of flat and house share website SpareRoom.co.uk, feels that word of mouth is a pivotal means of marketing. ‘Word of mouth has been crucial to the success of the website. Now we've made the top ten UK property sites (data from Hitwise) we are on people's radars and, hopefully, by providing a consistently good service we'll continue to get recommendations from happy users. There's nothing more effective than that.’
Scott Knox, managing director of the marketing trade body Marketing Agencies Association adds that businesses need a clear strategy to go with the marketing plan. 'Whichever channel a business decides to use, it is the creative idea and smart strategic thinking that will ultimately gain the best cut through. Of course the marketing channel will always play a vital role in bringing that message to life, but it is so important for entrepreneurs and business leaders not to lose sight of creativity, irrespective of the industry you work in.'
Comment by Kate Garratt
Thursday 12th May 2011A ‘Marketing Strategy’ is rarely built around a single strand of activity. Successful marketing usually involves a combination of communication initiatives such as advertising, PR and direct marketing working together. One of the main reasons that many marketing campaigns fail is that they are based on a ‘single-solution’ approach. PR, on its own, is usually not the answer; any advertising agency or web design company worth their salt with say the same about their discipline.
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Comment by Nigel Davey
Tuesday 31st May 2011A great many small businesses do the majority of their new business development through word of mouth simply because they believe they cannot afford to do anything else. The problem there is one of speculation and accumulation. I agree with Kate that a multi-activity strategy is vital but has to be followed by a level of discipline that means you are measuring the performance of each route to market.
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