WOM attracts more valuable customers

A recent study suggests that the lifetime value of customers acquired via WOM can be over twice as high as those acquired from general marketing methods. (executive summary of the study is available here)

Although acquisition via direct offers or other short-term sales tactics may be more immediately effective and certainly easier to attribute with current tracking mechanics, it often brings in customers who have no intention to stick around: simply put, they go where the next offer is.

The difficulty is that generating positive WOM is more than chatting up some influential bloggers. It is an entire philosophy touching everything from Service Quality and Customer Service, through to creating truly engaging marketing programs that aim to delight customers at every opporunity.

Proving ROI of Word of Mouth activities is notoriously difficult. But at the very least, using one of the imperfect tools that measure positive WOM and customer advocacy as a success metric makes sense, as it drives the organization to do the types of activities that acquire more valuable customers.

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