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May 11, 2006
Word of mouth drives business growth
More evidence that word of mouth drives business growth:
- A 7% increase in positive word of mouth unlocks 1% additional company growth
- A 2% reduction in negative word of mouth boosts sales by 1%
- Companies with above-average positive word of mouth grow four times as fast as those with below-average positive word of mouth
The figures are based on surveys conducted by the London School of Economics and Political Science and The Listening Company in the United Kingdom and compared against 2003 and 2004 sales data from banks, mobile phone networks, supermarkets and car manufacturers.
What this means for companies: Get baseline figures comparing your word of mouth to that of your competitors. A word of mouth goal or a composite Customer Evangelism Score makes it easier for employees know how well they're doing in the word of mouth arena.
Via: WOMMA
Technorati tags: word-of-mouth
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You're kiddin me! Really! Wow, now thats a shocker! Positive word of mouth drives business growth? Who'd a thunk it? And just think it only took the geniuses at the London School of Economics 30 years to figure out what every still wet-behind-the-ears vintage 1976 product manager understood the day they started their job. And we needed evidence to prove this? I can't wait for their next survey.
A tad harsh Mike. I think the stress in the above is "evidence". Sadly, I accept, many people need proof the "world is round" or that "UFOs are not alien spaceships".
Stats from such a reutable source as the LSE will make more people focus on the area, dig deeper etc etc.
The report is welcome.
Ah, Mike, if you'r not a radio talk show host, you should be one:-) While it's a no-brainer on one (your) level, there are plenty of decsion makers in any organization who need to see the ROI or the data proving the point. That's not a bad thing; in fact, it's probably a good thing in most cases.
