Monday, October 20, 2008

Study: How Profitable Is Word-of-Mouth?

http://www.brandweek.com/bw/content_display/news-and-features/direct/e3ie470eaeef1dd69b11a7c7061301e5f6b

If a conversation costs 50 cents to generate, how much profit do marketers reap from the typical eight minutes a consumer spends talking about their favorite brands?

According to BzzAgent, a word-of-mouth marketing agency in Boston, that profit is 38 cents. The firm has pegged this amount as the "communication dividend" in a report titled Calculating Your Communication Dividend, which examines the value of word-of-mouth conversations. It builds on another report (in June) that found the average cost of an eight-minute conversation to be 49 cents.