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Practic

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Nov 29, 2022
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World-of-mouth marketing is considered to be the oldest form of marketing. World-of-mouth marketing is when people refer new clients to a business based on a positive emotional impulse or financial stimulus. When a customer has a positive experience with a product/service she/he experience positive emotions and most likely share the experience with other people. This is an example of WOMM based on a positive emotional impulse. When a business pays to a person for referrals of new customers, as in referral programs, this is an example of WOMM based on a financial stimulus.



The first type of WOMM evolved in modern types of marketing such as: buzz marketing, viral marketing, blogs, social media, etc.



The second type of WOMM evolved in modern types of marketing such as: referral programs, profit sharing programs, revenue sharing programs, income sharing programs, etc.. In referral programs participants are rewarded for direct referrals. This type of referral programs called the 1st generation of referral programs. They give rewards or fixed payments, but do not generate stable income streams for participants.



Revenue sharing programs generate income streams from sales generated by direct referrals. For this reason they are more attractive to categories of participants looking for additional income streams. This type of referral programs called the 2nd generation of referral programs.



Income sharing programs generate income streams for participants from direct as well as indirect referrals. For this reason incomes from such programs may be comparable with incomes from employment. This type of referral programs called the 3rd generation of referral programs.



The first type of WOMM works well in good economic conditions, but become not efficient in bad economic conditions. The second and third types of WOMM work well in good and bad economic conditions.
 
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