The real cost of Word of Mouth
Satmetrix has run some numbers for the wireless industry in the US on the power of world of mouth. The referral index now tells how much a positive reference is worth, and more importantly, how much of a revenue loss does negative word of mouth cause. A promoter is worth about $1,700 in total value vs. the average customer who’s worth about $1,144. A promoter accounts for roughly half of a new customer acquired through good word of mouth. A detractor is responsible for the loss of 1.3 new customers through bad word of mouth. The lost business negates the value of a customer’s business creating a net negative cost of $300. From Church of the Customer.