In many respects marketing by word of mouth can be said to be the “hidden statistic” for all programs, as it’s well near impossible to actually gauge the effectiveness of marketing done this way. Saying that, however, it should be noted that almost every product in this increasingly digital age has, at one time or another, relied on this method of marketing to increase public and corporate awareness of product or service availability.

A recent study proved that two thirds of online marketing will be done on this basis alone in the coming year, which when coupled with the advent of Web 2.0.0 social networking and social marketing sites point towards promoting your product by word of mouth may be both more cost effective, and have an increasingly better ROI than more “traditional” online advertising media.

Consider any of the current online social networking site's business model. There has yet to be a successful site of this type that charges for any sort of membership, relying instead as they do on ad generated income to fuel their corporate engines. It is difficult to measure the effectiveness of marketing by word of mouth, but it should be noted that there is a method of measuring if your campaign is working – increased sales.

A company must know from their output exactly the difference between pre campaign, during a campaign and post campaign. This in itself gives businesses a measurable statistic to show effectiveness of this marketing methodology. It is true that not all businesses need or desire this form of sales technique, but is also through that not one business turns away prospects garnered from the by word of mouth method either.

Whatever you sell, a great study completed by Hill and Knowlton in February this year showed that decision makers are largely influenced by personal experience’s (58%), with recommendations and industry reports coming in at 51%. Coming in lower than expected was direct marketing at 21% with internet advertising lat 17%. These figures may only reflect the purchasing habits of key decision makers, but a young lady in Oregon deciding to buy one car insurance or another IS the key decision maker for that purchase, and her buddy Becky telling her to go with this company over that company will have a greater influence than any gravel-voiced actor pushing the product in a TV advert.

In essence, this statistic can be shown to reflect into any industry, any segment or niche, if every purchaser is considered the key decision maker. This makes the resurgence of the world’s oldest sales tool easy – get vocal or start tweeting, but tell everyone!

Every entrepreneur would love the day to arrive when they don’t have to market their services any more because buyers come to them through their referral system. The main reason that most people do not have referral networks working for them, or develop referral systems is that they haven't yet learned how. People are not mind readers, unless you ask them to refer other people who may be interested in what you have to offer; then you won't get a referral.

If someone is happy with your product or service and tells you so, then is the time to say thanks, if you happen to hear of anyone else who might benefit from what I have to offer, then please give them my contact details. A tiny variation of this is I'm pleased youare happy, perhaps you know someone else who would like to lower their second mortgage repayments.

The above is an ideal scenario, very often people are happy with what they have received, but because we don’t act straight away and ask them, the time has come and gone.Another great way of developing a referral system is with the thank you letter where you thank a person for their business and then end saying that you have enclosed two of your business cards for them to pass on to others.

There are occasions however, when the above methods of developing a referral system do not work, especially in the financial sector. The fact of the matter is that people vary rarely discuss their finances with others, and so wouldn't be sure who might be interested in the services that you have to offer. There are a couple of approaches to creating a referral system that will work more effectively than those already mentioned.

Successful business people have realized that it is a must to stay in touch with your clients by asking them if they would like to receive your monthly news letter. This may give them sound advice financially, then you could ask if they know others who might appreciate receiving a newsletter on this topic.

You should network with other businesses and try and get people together referring business to each other. When people meet like this, they are far more likely to make referrals in case a client of theirs needs the services that you have to offer. These things are proven methods of building a referral system, but it won’t happen overnight.

If you are going to build a great referral system that will still work in the future, then you need to not rush.

Getting referrals is the key of any successful business especially if you are running your own business with a fixed ad budget. If you’re not getting referrals, then you had better have an absolutely gigantic advertising budget the likes of which few business owners have, and which those who do wish they did not need to spend.

Why do you need referrals? Referrals are virtually cost free leads that are targeted to your business. The actual referral cost is little because referrals are a direct result of you providing your existing clients excellent products and service. So, the cost to your company of all of your referrals is only the money and time you spend selling to your existing customers. If your product or service is top-notch and you make your clients feel special, they will give you referrals.

Every referral you get is a lead you did not have to buy, did not have to cold-contact, did not have to qualify, and did not have to pay to advertise for. Each referral you receive has essentially been pre-sold on your service, the cost to you is zero, and you know your clients are satisfied.

It is not hard to figure out that by getting referrals, you are virally growing your business. It works just like that old TV commercial about the great hair shampoo that impressed a woman so much that she told two friendsand they told two friendsand so on, and so on

A referral is an individual who wants to speak with you. It would be a person who is set on purchasing from you, or could at least be contemplating it. It is not an individual who finds your approaching them disturbing. You do not have to spend a lot of precious time trying to qualify this person.

So, what are some of the ways that you can use to start getting referrals?

1. Simply make it a rule to ask for them. Make it a mandate at your company to ask for a referral each and every time you are in contact them, either to service them or showing them a new product. If you compose e-newsletters, have a section in there every time where you always ask them to show anyone they know who could use what you offer.

2. Always give incredible customer service to your existing clients, and always send a thank you notice every time they buy from you.

3. Keep personal relationships going with your clients. Try to acknowledge their birthdays, and reward them for remaining clients by giving them special promotional customer discounts off just released products to show them that you really care about them.

4. Exchange website links with any clients who run businesses via the Internet.

Remember, getting referrals is the way to have your business explode, and make yourself a fortune.

What is online viral marketing? It is basically a successful advertising campaign. The phrase was a creation of a business school graduate, popularized by the media and a media critic named Douglas Rushkoff. It simply refers to your ability to reach an unlimited number of people by starting out with a handful.

If you tell me something that I think is interesting, I will tell my friends about it. If they, too, think it is interesting, they will tell their friends. They probably know people that I do not know. So, the circle of growth is unlimited. In the old days, we called it word of mouth advertising.

The difference between word of mouth advertising and online viral marketing has to do with the number of people that someone talks to every day. Let’s use me as an example. In my “real” life, I talk to my close family members every day. I may talk to my extended family members and my friends once a week.

Some of them I haven’t talked to in years, “live”. But, via e-mail and social networking sites, I communicate with all of them, every single day. If I find something that I believe in…something that moves me, I will share it with at least 30 people.

Surveys say that the average person shares this kind of thing with only 12 people. So, I may be a little outside of the curve. The point is that the 30 people that I know will share with others. Effortless, information moves through this wave of people. Will the wave eventually crash?

If you have an effective online viral marketing strategy, you may be able to generate numerous waves; when one crashes, another forms. There are a number of different strategies, but all of the effective ones include one element. There is something “free” for people to share.

In some cases, it is simply a well-done commercial. Sony had one a while back. It was posted on YouTube and people sent it around. To date, it has had hundreds of thousands of views. How many people bought something? Who knows?

The point is this. In order to reach hundreds of thousands or millions of people in the past, you would have had to pay for television advertising. And, of course, you would have had to buy space on the most popular shows and the costs are prohibitive. With online viral marketing, you can reach that many people for next to nothing.

Before you hire a viral marketing agency, take a moment to look objectively at your website. With a good technique, a marketer may be able to drive tens of thousands of visitors to your website. But, it won’t do any good if your site does not sell your products or services.

If you are confident in your site and the products that you sell, there are hundreds of companies to choose from. You can even take a class and learn how to “do it yourself”. Take your time and shop around. Read about the company’s strategy and see if it makes sense to you. Find out how many people are in the network. Read the testimonials, if they are available.

There is one company that operates somewhat under the radar. The strategy that they use may be good, but websites like YouTube would not be too happy with them. Besides, their services are not customized. They recommend the same strategy for all of their customers.

If they are to effectively grow your business, a viral marketing agency should tailor their solutions to suit your products or services. They should offer ways to keep in touch with your current clients and turn your clients’ friends into your customers.

One of the effective techniques is a regular newsletter, sent to your client’s e-mail address. If you have no clients, you may need to obtain a list of e-mail addresses. Some of these lists were created by other successful businesses. They ask their customers if they would like to receive information from affiliates. If the customer says “yes”, the company adds them to the list.

You may be able to find a viral marketing agency that provides this sort of list, along with their other services. To be most effective, you want the list to be targeted to include people in your niche market. For example, if you sell toys, parents are your target market. It would be a waste of time to send dozens of e-mails to senior citizens.

Some of the things that you can do yourself include “social networking”. Join an online club, message board or forum, whose members have interests that “fit” with your niche. If you have yet to identify your niche, you may need a little more help than a viral marketing agency can offer. Everyone has a niche. Sometimes, it’s just hard to see it, from the inside, looking out. Someone outside of your company may be able to help you find your niche and grow your business.