Word-of-Mouth Campaigns: Poisoning the Grapevine

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Word-of-mouth (WOM) marketing is rapidly becoming big business in the United States and around the world, despite its sometimes questionable ethics. The Word-of-Mouth Marketing Association (WOMMA) estimates that two-thirds of all economic activity in the United States is influenced by its industry. WOMMA counts among its members such recognized brands as American Express, Best Buy, Coca-Cola, and Sony. According to PQ Media, spending on WOM marketing in 2007 was an estimated $1.4 billion.

By 2011, WOM spending is expected to reach $3.7 billion.

At one time or another, almost everyone has been approached by a friend or relative trying to sell something. Companies that engage in door-to-door direct sales, like Amway, Avon, Tupperware, and Herbalife, have long followed the word-of-mouth model with success, pitching products through personal connections in return for everything from free samples of moisturizer to shiny pink Cadillacs.

According to the Direct Selling Association (the leading industry trade group), worldwide revenues from direct sales topped $89 billion last year. By their count, nearly 14 million people in the United States-about 8 percent of the adult population-are employed in the direct sales industry. Sales have nearly doubled in the past decade.

Diet pills, furniture, vacuum cleaners, encyclopedias, plants, lingerie, pet food-you name it and chances are you've got a neighbor who can get a product for you at a "discount." Eager to reach new customers, name-brand companies are encouraging their most loyal devotees to sell goods in the cozy setting of their living rooms.

In 2001, following the Tupperware conscript-your-customers model, the beauty products retailer The Body Shop launched The Body Shop At Home.

Besides "the opportunity to work with a globally recognized brand,"

members have access to loads of free products and promotional kits and can host themed, prepackaged events for their neighbors (among them the "Pure Pamper Party" or the "Flawless Facial Party"). Similarly, Crayola, the century-old crayon-making subsidiary of Hallmark, started enlisting customers to knock on doors in 2004. The company's "Big Yellow Box"

initiative "promotes togetherness" by encouraging moms to hold crayon-selling parties for "friends, neighbors, co-workers and more."

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