Maybe Metrics – The impact of WOMM

Satmetrix has some interesting research, as noted in the release excerpt:

Applying this framework to the computer hardware industry, Nowinski and his team discovered that each Promoter was worth approximately $2,634. Promoters spend $203 more than the industry average of $1,615 and account for roughly one-half of a new customer acquired through positive word-of-mouth. In comparison, each Detractor can cost a business 0.84 percent of a new customer through negative word-of-mouth. The lost business associated with their negative referrals subtracts nearly the entire value of their purchase behavior, leaving a total customer worth for Detractors of just over $100, accounting for $2,500 less than Promoters.

Church of the Customer furthers:

The study examined customers in the computer hardware industry and found, using the Net Promoter methodology, that “promoters” would spend about $1,818 of their own money and refer an additional $816 of revenue from friends and associates.

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“While Detractors spend lags the average customer by only $158, their negative word-of-mouth behavior represents a significant hidden cost and net drain on future revenue,” said Nowinski.

Interesting stuff, wonder what the general CPG impact is?

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  • Reply jon gatrell April 13, 2008 at 4:04 pm

    Blog: Maybe Metrics – The impact of WOMM: Satmetrix has some interesting research, as noted in the.. http://tinyurl.com/5ogaub

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