Word of mouth is the most powerful brand-building mechanism there is. This is not new, of course. The book on the left put rigorous data behind the idea that people were more influenced by their peers in marketing, politics, and fashion than they were by mass media. It is interesting to note that the book was published in 1955, and is well-known by most marketing researchers. That is why I am taken aback by people promoting word of mouth as the next big thing.
What is new is the means to witness, promote and harness word of mouth through digital social networks. But this does not change the fundamental challenge to marketers, which is finding a way to generate genuine word of mouth in the first place. True word of mouth happens when a potential customer gets a sincere recommendation from someone they trust. True word of mouth cannot be generated directly by a company. If it is, it loses the sincerity and trust that make it so powerful. Instead, it has to do something that makes that trusted influencer want to recommend their product. High product quality might do that, mass media might do that, database marketing might do that, great customer service might do that, a viral video might do that. These are all marketing channels. They are all means to influence the influencers.
When new firms try to position themselves as Word of Mouth agencies, the trick is to find out what they really do. How do they generate word of mouth? If they say by creating buzz in the mediasphere, then they are a PR company. If they say by identifying influencers most likely to be the source of recommendations to others, they are a database marketing company. If they say by creating unique brand experiences, they are an events company. Word of Mouth is an end, not a means. It still falls on marketers to find and use the tools they need to make true word of mouth happen.
The Ryan Report 