New Business Trends

Where is the Puck Going?

Where is the Puck Going? header image 2

Word of Mouth: The Future of Marketing (2)

February 28th, 2011 · 1 Comment

In my previous post I wrote about Word-of-Mouth being the future of marketing. WOW factor and WOM not only brings you customers for “free”, but those referred customers are even more profitable!

Philipp Schmitt, Bernd Skiera, & Christophe Van den Bulte published the article “Referral Programs and Customer Value” in Journal of Marketing earlier this year. They tracked approximately 10,000 customers of a leading German bank for almost three years and learned that REFERRED CUSTOMERS…

“(1) have a higher contribution margin, though this difference erodes over time
(2) have a higher retention rate, and this difference persists over time; and
(3) are more valuable in both the short and the long run.
The average value of a referred customer is at least 16% higher than that of a nonreferred customer with similar demographics and time of acquisition.”

Tags: "Know-Wow" · New Business Trends · New Marketing Trends · Viral Marketing

1 response so far ↓

  • 1 Word of Mouth: The Future of Marketing (2) | Business Blogs // Mar 1, 2011 at 8:32 am

    […] In my previous post I wrote about Word-of-Mouth being the future of marketing. WOW factor and WOM not only brings you customers for “free”, but those referred customers are even more profitable! Philipp Schmitt, Bernd Skiera, & Christophe Van den Bulte published the article “Referral Programs and Customer Value” in Journal of Marketing earlier this […] Where is the Puck? […]

Leave a Comment