GTM Dictionary

The Go-to-Market Dictionary: Word-of-Mouth Advertising

Learn everything you need to know about word-of-mouth advertising with our comprehensive Go-to-Market Dictionary.

In today's marketplace, there are countless ways for businesses to reach potential customers. From social media ads to email campaigns, marketers have no shortage of tools at their disposal. But one tried-and-true method that can yield tremendous results is word-of-mouth advertising. In this article, we'll explore what word-of-mouth advertising is, how it works, and how businesses can harness its power to drive growth and success.

Understanding Word-of-Mouth Advertising

At its most basic level, word-of-mouth advertising involves people talking about and recommending a product or service to others. These recommendations can happen in a variety of settings, from casual conversations among friends to online forums and social media. While word-of-mouth can occur naturally, many businesses develop strategies to encourage and amplify it.

Word-of-mouth advertising is not a new concept. In fact, it's been around for centuries. Before the internet and social media, people would recommend products and services to their friends and family through face-to-face conversations or letters. Today, word-of-mouth has evolved to include online reviews, social media posts, and influencer marketing.

The Power of Personal Recommendations

Word-of-mouth is powerful because it's based on personal recommendations from people that consumers trust. When someone hears about a product or service from a friend or family member, they're much more likely to consider it than if they were to come across an ad or marketing message on their own. Personal recommendations can also create a sense of urgency and exclusivity around a product or service, which can increase demand.

Personal recommendations are especially important in today's world, where consumers are bombarded with ads and marketing messages on a daily basis. According to a study by Nielsen, 92% of consumers trust recommendations from friends and family over all other forms of advertising.

How Word-of-Mouth Differs from Traditional Advertising

Unlike traditional advertising, word-of-mouth is not controlled or paid for by the business. Rather, it's the result of organic conversations and sharing among people. Because of this, word-of-mouth can be more effective at building trust and credibility with potential customers. It's also often cheaper than traditional advertising methods, which can be a significant advantage for small businesses or startups with limited budgets.

Another key difference between word-of-mouth and traditional advertising is that word-of-mouth is often more targeted. When someone recommends a product or service to a friend or family member, they're doing so because they believe that person would be interested in it. This means that word-of-mouth can help businesses reach their ideal customers more effectively than traditional advertising methods.

Overall, word-of-mouth advertising can be a powerful tool for businesses looking to build trust and credibility with potential customers. By encouraging and amplifying word-of-mouth, businesses can create a loyal customer base and increase their chances of success.

The Role of Word-of-Mouth in Go-to-Market Strategies

For businesses looking to grow and expand, word-of-mouth can be a critical component of their go-to-market strategy. By generating buzz and enthusiasm among existing customers, businesses can attract new customers and build a loyal fan base. But what exactly is word-of-mouth, and how can businesses use it to their advantage?

Word-of-mouth is simply the act of people talking to each other about a product, service, or brand. It can happen in person, over the phone, via email, or on social media. When people share their positive experiences with others, they are essentially acting as brand ambassadors, spreading the word and creating buzz.

Building Brand Awareness

Word-of-mouth can be an effective way to build awareness for a new product or brand. By encouraging early adopters to share their experiences with others, businesses can quickly spread the word and generate interest among a wider audience. For example, if a new restaurant opens in town and offers exceptional food and service, customers are likely to tell their friends and family about their experience. This can lead to increased foot traffic and revenue for the restaurant.

Driving Customer Acquisition and Retention

Word-of-mouth is also a powerful tool for acquiring and retaining customers. By providing exceptional products and services, businesses can create loyal advocates who will recommend their offerings to others. This can be especially effective in industries where customers are likely to have ongoing needs, such as healthcare or financial services. For example, if a bank offers personalized service and competitive rates, customers are likely to recommend the bank to their friends and family when they are in need of financial services.

Enhancing Customer Loyalty and Advocacy

Businesses can also use word-of-mouth to deepen their relationship with existing customers. By encouraging satisfied customers to share their experiences with others, businesses can strengthen their customer relationships and create a sense of community around their brand. For example, if a clothing retailer offers a loyalty program that rewards customers for making purchases and referring friends, customers are likely to feel more connected to the brand and become advocates for the company.

In conclusion, word-of-mouth can be a powerful tool for businesses looking to grow and expand. By building brand awareness, driving customer acquisition and retention, and enhancing customer loyalty and advocacy, businesses can harness the power of their existing customers to attract new ones and build a strong, loyal fan base.

Types of Word-of-Mouth Advertising

Word-of-mouth advertising is a powerful tool that businesses can use to build brand awareness and attract new customers. There are two main types of word-of-mouth: organic and amplified.

Organic Word-of-Mouth

Organic word-of-mouth happens naturally, without any intervention from the business. It occurs when customers have a positive experience with a product or service and share their thoughts with friends, family, or colleagues. This type of word-of-mouth is often the most effective, as it comes from a place of genuine enthusiasm and can be more trustworthy than other forms of advertising.

One way businesses can encourage organic word-of-mouth is by providing exceptional customer service. When customers feel valued and appreciated, they are more likely to recommend the business to others. Another way to generate organic word-of-mouth is by creating a unique and memorable product or service that people will want to talk about.

Amplified Word-of-Mouth

Amplified word-of-mouth, on the other hand, occurs when businesses actively encourage and incentivize customers to share their experiences with others. This can be done through a variety of strategies, including influencer marketing, brand ambassadors, referral programs, and affiliate marketing.

Influencer Marketing and Brand Ambassadors

Influencer marketing involves partnering with social media influencers who have a large and engaged following to promote a product or service. These influencers can be celebrities, bloggers, or other individuals who have built a loyal following on social media. By partnering with these influencers, businesses can reach a wider audience and generate buzz around their product or service.

Brand ambassadors are similar to influencers but typically work on a smaller scale. They may be existing customers or fans of the brand who are passionate about the product or service and want to share their enthusiasm with others. Brand ambassadors can be an effective way to generate word-of-mouth within a specific community or niche.

Referral Programs and Affiliate Marketing

Referral programs and affiliate marketing are other ways businesses can encourage word-of-mouth. Referral programs offer rewards or discounts to customers who refer new business. This can be an effective way to incentivize customers to share their positive experiences with others.

Affiliate marketing involves partnering with other businesses or individuals to promote a product or service in exchange for a commission or other incentives. This can be a mutually beneficial arrangement, as both parties can benefit from increased exposure and sales.

Overall, word-of-mouth advertising can be a powerful tool for businesses looking to build brand awareness and attract new customers. By understanding the different types of word-of-mouth and implementing strategies to encourage it, businesses can harness the power of this organic and authentic form of advertising.

Measuring the Impact of Word-of-Mouth Advertising

Word-of-mouth advertising has long been considered one of the most effective forms of marketing. It's the kind of advertising that happens when customers talk about your brand to their friends, family, and colleagues. But how can businesses measure the impact of word-of-mouth advertising? Let's take a closer look.

Key Performance Indicators (KPIs)

Measuring the impact of word-of-mouth can be challenging, but businesses can use a variety of key performance indicators (KPIs) to track their success. These might include metrics such as customer acquisition or retention rates, social media engagement, or referral program participation.

For example, if a business notices an increase in customer acquisition rates after a particularly successful word-of-mouth campaign, it's a good indication that the campaign was effective. Similarly, if social media engagement spikes after a customer shares positive feedback about the brand, it's a sign that word-of-mouth is having an impact.

Social Listening and Sentiment Analysis

Businesses can also use social media listening tools to measure the sentiment and reach of their word-of-mouth efforts. By monitoring online conversations about their brand, businesses can gain insights into what's working and what could be improved.

For instance, a business might use a social listening tool to track mentions of their brand on Twitter. If they notice that a particular tweet about their brand is getting a lot of engagement and positive comments, they can assume that word-of-mouth is playing a role in the tweet's success.

Customer Testimonials and Reviews

Finally, businesses can use customer testimonials and reviews to gauge the impact of word-of-mouth. By collecting and sharing positive feedback from satisfied customers, businesses can showcase their success and generate even more buzz and excitement.

For example, a business might feature customer testimonials on their website or social media channels. By highlighting the positive experiences of real customers, they can build trust and credibility with potential customers who may be on the fence about trying their product or service.

In conclusion, measuring the impact of word-of-mouth advertising can be challenging, but it's essential for businesses that want to understand the effectiveness of their marketing efforts. By using KPIs, social listening tools, and customer testimonials, businesses can gain valuable insights into the impact of word-of-mouth and use that information to improve their marketing strategies.


Word-of-mouth advertising can be a powerful tool for businesses looking to reach new customers and drive growth. By authentically engaging with customers and encouraging them to share their experiences with others, businesses can create a sense of community and establish themselves as trusted experts in their industry.