WOM Marketing How valuable is Word Of Mouth

WOM Marketing How valuable is Word Of Mouth? Group 7

PLAN INTRODUCTION 1 MOST VALUABLE CUSTOMERS 2 RESUME OF THE ARTICLE 3 IMPORTANCE OF IDENTIFYING NEW CUSTOMERS 4 CLV AND CRV 5 CLEAR AND TRUSTFUL MESSAGE CONCLUSION

Who do you think are the most valuable customers?

1. MOST VALUABLE CUSTOMERS Those word of mouth brings the most profitable new customers, regardless of how much they themselves buy.

2. RESUME OF THE ARTICLE Identify the customers who bring in the most referrals. Then capitalize on the knowledge.

3. IMPORTANCE OF IDENTIFYING CUSTOMERS 1. Calculate each customer’s lifetime value 2. Calculate each customer’s referral value 3. Segment customers based on CLV & CRV 4. Target your segments • • marketing strategies Champions (high purchasing behavior- low referring) Affluents (high purchasing behavior- low referring) Advocates (low purchasing behavior- high referring) Misers (low purchasing behavior- low referring) Increasing marketing Return On by

Segmentation • 3 main segments: affluents, advocates and misers • Objective: draw customer value matrices relevant to each sample in order to adapt our mareting campaigns to their needs: ü Affluents: direct-mail promotion to encourage them to refer more customers. ü Advocates: cross-selling and up-selling to increase their lifetime value ü Misers: combination of both techniques in order to increase their CLV and CRV

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4. CLV AND CRV Simply knowing what an average customer $is$ to your business in a certain period of time • Better decision making = • More accurate Budgeting for marketing campaigns

They know what’s CRV is about! I would rather earn 1% of 100 people�s efforts than 100% of my own efforts� Networking companies - John Paul Getty (American Billionaire)

5. CLEAR AND TRUSTFUL MESSAGE • Giving a Clear Message will help your customers to understand better what you offer to them. • In this case, telling your referral customers how they are going to be benefited of referring new customers, will encourage them to do it, as now they understand how and what they are going to win.

5. CLEAR AND TRUSTFUL MESSAGE • Showing your referral customers their benefit of referring new customers is very important to be done in the right way. • If you show warranties to your referrals about how they are going to win, they will trust and do their best. • Offering immediate payment for each referral, insted of payment for a certain ammount of of referrals.

Role WOM plays in viral marketing or buzz marketing CONCLUSION Enhance Bto. C relationships Create links between customers ex: LVMH special days campaign Create positive information Control customer s behavior Segment specific target ex: NBA Big Color