Dr. Walter Carl who has been leading the Measurement & Research Council at WOMMA for years kicked off the WOMMA Measurement & Research Symposium, the first day of 3 days of best practices in WOMM at the WOMMA Summit.
He framed up 4 models of WOM measurement from the just-released Vol4 of WOMMA's Measuring Word of Mouth Journal:
- Customer Value Matrix
- NetPromoter Economics
- Social Vlaue of Opinion Leaders
- Conversation Value Model
They all are based upon the Customer Lifetime Value (CLV) premise which emphaisizes their value but ignores their contibutive effect - people they talk to and how they contribute to action. These models are now combined with a Word of Mouth component to account for this additional and huge value from customers. Some quick points:
Customer Value Matrix
Focus: adding new customers
reducing marketing acquisition costs
Value of customers who joined due to referral
Value of custoimers who woudl have joined anyway (not as much value but reduced acquisition cost)
Aha: Some customesr who do not spend much are great referrers
NetPromoter Economics
Focus: Amount of business we have won or lost based upon customer recommendations. This includes looking at customers added and lost due to WOM.
Focus on loyalty driver to move people along continuum of detractors to promoters
Social Value of Opinion Leaders
Focus:What if we focused on thoese people who are highly persuasive and connected? What happens when you remove them from the sales process? Activating influencers can increase the value of firm's revenue due to accelerating adoption. A lot o fthe value is based on the impact of this accelration
Conversation Value Model
Focus: New customers due to positive WOM. This is Walters G2X model of generational reach. Understand referral drivers and high impact conversation to optimize over time.
other models to consider:
- BzzAgent - CPM base rates plus premium unique attributes associated with WOM
- Marketing Mix modeling
- Value from customer listening and innovation
Here's how all of the presentations break down topically over the day:
- Driving KPIs threough WOM
- Global WOM
- Online and Offline WOM
- Value of WOM
- WOM Planning and Measurement
I always get nervous before a WOMMA event. Based upon my role on the board, I just want every event to be compelling, completely relevant to business today and a great experience for everyone. This introuction to today's session not just put me at ease but made me realize that there is no more important place to be right now if you are using social media and wordof mouth in business.
Look for content tagged "womma" and in Twitter, you can follow us via #womma (not familiar? Go to Tweetscan or Twitter and search for #womma and you will se content from all of the participants)
I'm highly interested in this topic. How difficult is it to measure word of mouth? It's not as trackable as Google Adsense and Adwords.
In economics, anything growth that cannot be attributed to productivity gains is chalked up to technology advancement. Will companies just say that any unexpected rise in customer activity can just be assumed to be a result of word of mouth marketing?
Posted by: Allan | November 12, 2008 at 03:47 PM
Hi John, thanks for the review. Hopefully these and other approaches will make their way into a forthcoming Best Practices Guidebook for WOM Measurement, which will be an initiative of the WOMMA Measurement and Research Council. If any of your readers are interested in the full deck for this presentation they can find it here: http://tinyurl.com/state-wom-measurement-2008
Posted by: Walter Carl | November 16, 2008 at 02:00 PM