Advertising is expensive for small businesses, but word of mouth marketing is not. It's also very effective.
Where there is a seller, there is a buyer. A business just needs to get the word out to the people that want to buy their product or service. And most people like the idea that they are referred by someone they know and trust. Most people would rather go to a dentist or doctor that a friend has recommended than to pick one out of the phonebook. They would rather have a real estate agent or mechanic that has been vetted by someone they know.
A business should have a network of word of mouth warriors that will get your message out to the world in the best possible way. Expanding your network of contacts is important for your business. You will have better results if you actively network with your contacts.
Help the people in your network by carrying around their business cards and referring business to them as they will do for you. You should work on a percentage basis to encourage others to promote you and vice versa.
It seems obvious, but have a great product, great service and a great message. As many people as possible should know about it. Get them to use your product or service and give you a testimonial. You want as many loyal and enthusiastic fans as you can get. And you want them to spread the good word about you.
You must have the best customer service on the planet. Customer service is free and should be at the top of your list when it comes to your business. If your customer has a negative experience, they will likely tell ten other people about it. You want as little negativity as possible and you want people to want to shout your praises from the rooftops.
You need to be persistent if you want your WOM campaign to work. It takes time to cultivate good working relationships. People buy from people they know and trust. You also have to be willing to help others achieve their goals at the same time. But a good word of mouth plan will pay off in spades in the long run if you stick to it.