The power of word of mouth

By Abhinash on February 13, 2010

In today’s internet age, it does not take very long for a person to spread opinions about a certain experience. Word of mouth refers to the passing of information from one person to another, mostly about a product, service or a specific brand. Word of mouth is almost entirely associated with marketing today. Oetting (2010) defines word-of-mouth as “Oral, person-to-person communication between a perceived non-commercial communicator and a receiver concerning a brand, a product, or a service offered  for sale”.

Reasons for the spread of word of mouth

Word of mouth has a strong impact on the formation of expectations of potential customers. It is an important determinant of future purchasing behavior. Word-of-mouth has existed since humankind; people have always talked with each other about products, issues and events that are important in their lives. In the last ten years, several changes have occurred that increased the impact of word-of-mouth:

  • The decreasing effect of traditional marketing increases consumers’ reliance on word-of mouth for information.
  • Communication through telephone and internet have enabled consumers to have an easier time gathering information from others.
  • Influential people are able to impact public opinion to a greater degree with new means of communication.
  • Internet makes it possible for marketers to find out what people say about their products because word-of-mouth is taking place in an archived, publicly accessible format.

Word of mouth versus traditional advertising today

A 2003 Marketing Society Poll found that 90% of the people taking part believed that traditional advertising’s influence has diminished (Kimmel, 2010). This pattern is likely to continue in the future. Two important reasons why word-of-mouth works are attention and credibility (Hughes 2005). ‘’When people talk to each other, they have undisturbed, face-to-face attention – something conventional advertising rarely achieves. Furthermore, people know that advertisements are biased but when their friends tell about a great product, they believe them”.

Buying decisions based on word of mouth

Silverman (2001) describes in his book, “Secrets of word-of-mouth marketing”, nine levels of word-of mouth. He describes the levels in a continuum of negative to positive word-of-mouth. It ranges from minus four: very negative word-of-mouth, to plus four: very positive word-of-mouth. The willingness of people to ‘’create’’ word-of-mouth is related to the height of positivism or negativism. It also is proven that customers are less willing to say something positive about a product or a brand than something negative (Silverman 2001).

In recent days, consumers are relying less on advertising and more on word of mouth to make their purchasing decisions. This has given businesses a new perspective. They now need to ensure that their offerings are satisfying customers to their expectations. Case in point: the Hindi film industry. Until a few years ago when internet was not rampant in India, even bad Bollywood movies managed to make decent business because of slow exchange of communication between audiences. However, since the advent of internet, many movies are failing miserably at the box office. Reviews spread quickly through the internet and telephones. This has resulted in huge losses for many producers who are struggling to even meet their production costs today.

Thus, we can see that the power of word of mouth cannot be underestimated. It is good to have sound marketing principles, but more than that companies should ensure that their products are able to meet customer expectations. Only a good product/ service can survive in the long run.


  • Hughes, M. (2005). Buzz Marketing. Penguin/Portfolio.
  • Kimmel, A. (2010). Connecting With Consumers: Marketing For New Marketplace Realities. New York: Oxford.
  • Oetting, M. (2009). Ripple Effect: How Empowered Involvement Drives Word of Mouth. Berlin: Gabler.
  • Silverman, G. (2001). The secrets of word-of-mouth marketing : how to trigger exponential sales through runaway word of mouth. New York: Amaco.

I am currently working as a Research Associate. My work is centered on Macroeconomics with modern econometric approach. Broadly, the methodological research focuses on Panel data and Times series data analysis for causal inference and prediction. I also served as a reviewer to Journals of Taylor & Francis Group, Emerald, Sage.


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