Research: Word of Mouth Directly Impacts Bottom Line
Word of mouth can have a direct impact on a company's bottom line. That's the key finding in an October 2005 paper by the London School of Economics and Political Science and the Listening Company. Poll data from UK-based consumers were compared to sales figures from banks, mobile phone networks, grocery stores, and auto manufacturers.
Other key findings include:
* A 7% increase in positive WOM unlocked an additional 1% in growth.
* A 2% reduction in negative WOM also boosted sales by 1%.
* Companies with above average positive WOM grew four times as fast as companies with below average positive WOM.
