Wednesday, December 4, 2013

Why Word of Mouth is Essential for Really Big Companies

The converntional wisdom is that positive and enthusiastic word of mouth (people referring other people to a specific product) is helpful for any supplier of goods and services.

Some might argue world of mouth is the only a way a successful company becomes a huge company. The reason, as often is the case, is scale. 

When a company is small, marketing or advertising arguably can drive usage growth. But eventually, a firm gets so big that it simply can't spend enough money to have an impact.

At that point, only word of mouth recommendations make a difference in sales volume. 

True, the product has to be useful, priced right and of sufficient quality to make it "better" than other alternatives. Still, it is a useful insight: a very-large company is in the hands of its users, where it comes to marketing, even if a small company can affect sales by marketing.

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