For small businesses and start-ups there's never enough money to go round. So finding funds for marketing is going to be tough, if that means less money for product or service development. And there's the rub: spend the money to finish the product; or invest in promotions for early sales to fund further development? Either choice means some pain, so is there a middle way?

There is. Though not a magic bullet, small businesses and start-ups can employ a range of very low cost tactics to get their name and product out into the market. One tactic that's often undervalued is using word of mouth (WOM).

WOM is gossip by another name. In essence, WOM is individual referrals between people who know each other and it's the most cost-effective promotional medium there is. The buzz-word for WOM now is viral marketing, which takes in email, chat and txt as well as plain old talking. Viral marketing of the electronic sort rates a brief of its own.

You've probably been on the receiving end of some effective WOM at some stage, generally in the form of personal recommendations (or warnings) from friends or relations. Like, for example, when people relate their builder or plumber experiences around the dinner table. Good experience = good WOM. Bad experience = bad WOM. By the way it's said that, sadly, bad experiences are passed by WOM to twenty people while good WOM goes out only to seven. C'est la vie. But dream of this: if your first (seriously happy) customer tells seven others who buy from you, and they each tell seven others who buy from you, you now have 50 customers. If they all tell seven more, you're on your way...

And if you think that your product is not exciting enough to generate WOM, think of all the times you've heard of some new (but mundane) service or product from a relative, colleague, neighbour or friend.

Turning WOM to your business advantage is the trick - if you can manage it.

The following suggestions won't suit everyone's business. Yours is unique, so try and apply the ideas behind these suggestions to your situation.

WOM starts from the very first contact between your business and a prospective customer. For example: the receptionist. If the phone greeting is cold and disinterested, thus raising the prospect's hackles, the relationship is all set to go downhill from there. But a warm and personable welcome can make all the difference to creating a loyal advocate through thick and thin.

I sent some parcels down to Christchurch the other day; delivering them to the courier office personally. The only person from the company that I had anything to do with was the receptionist. She answered my questions cheerfully, stayed late so I could rush off and sort something out, and helped me carry my parcels from my car into the office. That company, Castle Couriers, has my loyalty. And so far I've recommended them to two friends.

Another tactic is to do something for your customer that really stands out - something that makes them go, "Wow!" and remember you - something that so delightful that they will pass the story, and your business, on to a further contact. I'd put my friend at Castle in this category. I bought a multi-function device recently - a printer/fax/scanner/copier combo. The price was right and it does a good job - but two things really stood out: 1.) The retailer included, as part of the deal, the special cable that was essential for me to make the thing talk to my PC, and 2.) Since I wasn't sure that the print quality would be sufficient for my purposes, and I couldn't test it in the shop, the salesperson guaranteed that they'd take the machine back if I wasn't happy - something that two other retail shops I'd visited had refused to do. I didn't return the machine. Good on ya Warehouse Stationery, Mt Albert.

Or, give your customers something to brag about: the great deal they got from so and so; the extra goodies that came with the package; the feature that came as a surprise bonus; the unexpected follow-up call. What is there about your product or service that you can add (at little cost to you, but great value to your customer)? For a long time, a few years back, people who bought a PC Direct PC received, out of the box, an offer for some free issues of PC World magazine - a pretty good bonus, and it cost PC Direct nothing.

Better still, build your product or service offering in such a way that your customers, by offering it to their customers, get some kudos.

Actively generating good WOM is an art form combined with gambling. Remember: you're dealing with the fickle public heart.

After wowing your customer with an awesome service experience, try just lightly to encourage them to mention it to friends or colleagues who may have use for the same product. Not so easy, you say? No, it's not easy. You could assist your cause by providing your customer with additional information about your product: more ways to use it, features they may not have noticed. Not only do they become much more familiar - "at home" - with the product, so they remain sold, but they'll gain the confidence to talk about it if the opportunity arises. And if you discover that a customer has actively recommended you to someone else, make sure you reward your "champion" somehow (even a letter or phone call, could be sufficient).

And yes, you can always "encourage" WOM. Offer an incentive to your customer for new business that comes to you from their recommendation. We're not talking pyramid selling here. Your customer, if they're enthused enough about the product, will now simply have an incentive to mention your product to people that they think will benefit from it. Yep. Everybody wins.

I've hardly scratched the surface of WOM here. If you want to delve deeper into the world of WOM, put "word of mouth marketing" into Google. There are whole books written on the subject. (Google itself has benefited hugely from WOM, but the Google story is another column.)

Disclosure: Alec has no commercial interest in Castle Couriers or Warehouse Stationery.

Any questions or comments? Call me on 021 936 700 or email me at alec@vitalmarketing.co.nz. I look forward to hearing from you.

Get more Marketing Snapshots at Vital Marketing's website: www.vitalmarketing.co.nz