Why word-of-Mouth lets you run circles around bigger competitors

I posted this last week, but an IE bug was causing problems with it.   Turns out the original image was causing the problem (a photo of Gary V…who knew he’d take our blog down ;-).  here’s the repost.

I just finished watching Gary Vaynerchuk’s video explaining how word-of-mouth marketing is changing and what this means for brands today.  Great stuff…totally entertaining and Gary does a great job of explaining word-of-mouth in a simple, powerful way.  He describes the change like this:

Word-of-mouth has always been the most powerful (form of marketing)….But here’s where it gets (even more) powerful.  Word-of-mouth has fundamentally changed in the last three years, because of social media.  Twitter and facebook and other products like that have allowed your voice to go extremely viral.  So let’s just say Chris Mott over here was the biggest socialite in New York City and he just went to every event every night.  He was the biggest yenta in town.  How many possible people could he tell about your service?  Five hundred?  A thousand, if that’s all he did for a month?  Well now, one press of the button on twitter and tens of thousands of people are going to know.

Gary goes on to say:

Plus, understand word-of-mouth.  So now you tweet something else.  Well then somebody blog posts about it.  Somebody StumbleUpon’s that.  Somebody digg’s that.  The tail of word-of-mouth is the power of what the Internet has created.  As soon as you understand that, the sooner you’ll be able to build brands on the Internet.

Exactly right…and the beautiful thing for small and mid-size businesses is that big companies still aren’t participating to any great degree, which gives you a great opportunity to establish yourself in the marketplace.  According to research conducted by Ross Mayfield and Chris Anderson, only 12% of the Fortune 500 are blogging, which is WAY below the average for private companies.  Given the low level of participation on blogs, you can only imagine what the numbers must look like for social services like Twitter, facebook, digg, etc.

Why aren’t big companies focused on social media marketing and word-of-mouth?  Simple…they don’t feel the impact of not participating, so they don’t think they have to be.  They can skate leveraging traditional channels and relying on the brand equity they’ve built up over years.  We’re in the midst of the single biggest change to marketing since the advent of television, and as a small business it’s almost impossible not to feel the impact of this.  Big businesses won’t feel it for years though, so inertia keeps them from acting…momentum keeps a supertanker moving forward for a long time, even after the engines have been turned off.

At this very moment, someone in a Fortune 500 company is in a windowless conference room walking his boss and peers through a 42 slide PowerPoint about how social media marketing is “for real.”  When he finishes, everyone will congratulate him on the great work and they’ll all agree that “this is something we really need to keep our eyes on.”   As anyone who has worked in a big business knows, this is code for “I’m not doing s**t until someone tells me I have to or until it shows up in my bonus plan.”  For small and mid-size businesses, this provides a great opportunity to use twitter, your blog, comments and all sorts of other social tools to build the brand, pick off customers with long-tail searches, engage with the new influencers in your market, etc.  By the time the big business finally realizes that it needs to get off the dime, you’ve already established yourself…and the competitive advantage is sustainable because as easy as it is for the supertanker to rely on momentum to coast, it’s equally as hard to get it moving again once it stops.

Update: Jason Falls has a great case study up that demonstrates how one small business is incorporating social media into their business.  My primary focus in this post is on lead generation whereas Jason’s case study focuses more on the value that this business is getting in the middle part of the sales funnel (brand preference and consideration).  Definitely a worthwhile read.


  • Paul May

    @Ken – congrats on the making the jump! Yeah, I’ve sat in on my fair share of those meetings…life is definitely too short. 🙂

    @Dave – thanks for stopping by. We’ll keep an eye out for the video.

  • I love Gary’s videos. Next week I plan on making a spoof video of Gary’s video before the pubcon conference.


  • Paul, I won’t bother being redundant and lamenting in detail what the other commenters have already covered. And it gave me a good solid out loud chuckle, the way in which you described “At this very moment….” That is absolutely true. I’ve lived in those corp cultures too. And just recently left one so I could move quickly, be empowered, etc… This represents a fantastic opportunity for so many ppl and companies. Excellent post.

  • @websatan – I agree that everyone needs it (big or small), but I do think the level of pain is significantly higher and the barriers to participation are much lower in smaller companies. We’ll add socialtwist to the list of companies to check into.

    @Andy – I think you nailed it with your examples. The infrastructure at large companies is designed for deliberate, structured decision making. I.e., put processes and checkpoints in place that slow things down so that bad decisions are avoided…as you pointed out, this doesn’t work when the name of the game is speed and individual empowerment.

  • Thanks for the recap and insight on Gary’s presentation. I actually had a related conversation with Gary on Twitter last week about the lack of big companies participating “actively and authentically” on social media outlets.

    I believe large corporations often desire the change and leverage social media can provide, but do not possess the communication hierarchy to join the conversation. Social media is so powerful for SMEs because the tools are focused on empowerment and quick decision making. See an interesting article? Then quickly post a blog. Over hear a debate related to your industry? Then join on Twitter, Facebook, or any phpBB forum to express your opinion. Many large corporations do not provide employees with the freedom to act with “informed impulse.”

    Hope this ramble added to your conversation.

    Andy Angelos

  • Word of mouth is needed for every company- be it small or, big.

    Every one wants to leverage it be it your direct competitor or, the big player. Any way, we just launched Tell-a-Friend. At least in the online sphere word of mouth platform can be offered to every one 🙂


1 pingback