“Word of mouth agencies and clients need to start talking money”

April 30, 2010 at 12:21 pm | Posted in Events, Measurement, Research | 1 Comment
Tags: barak libai, CRM, Measurement, roi, social media, social networks, WOM, word of mouth

This week, Professor Barak Libai gave WOM UK members a glimpse into the future of WOM measurement and ROI as he presented his latest research and thinking on the value of consumer conversation.

We were delighted that Professor Libai, Marketing Professor at Recanati Graduate School of Business, Tel Aviv University, and award-winning researcher on the economics of WOM, narrowly escaped ashgate to present to the brands, agencies, fellow academics and students who piled into Grey’s London offices.

He began with establishing the importance of CRM in the past 20 years, and the need to start seeing the value of WOM in CRM terms, focusing on both customer lifetime value (CLV) and social value, and the lifetime and social values of people’s wider networks.

While Professor Libai admitted that there are still big holes in our knowledge of exactly how value creation is achieved through WOM – “we don’t necessarily know how, but we know that before and after, something happened that led to sales” – he also emphasised that the volume of data we now have access to is enormous, and is leading to a revolution in quantifying individual and social contributions.

His own work in simulating social networks to investigate how and why brands WOM spreads, using models from biology and anthropology, prompted questions from a crowd eager to know how accurate these trials could be, and how soon we might see more scientific approaches to measurement.

Professor Libai’s own international perspective also led to a discussion about rates of uptake in different countries, and the session ended with a quick delve into the tricky area of measuring offline WOM before everyone got stuck into the free wine and some relaxed networking.

With Dr Robert East in the audience bringing his perspective to bear on the research, and a real variety of attendees, this was the sort of event we love – challenging, thoughtful and with a real community feel. Big thanks to sponsors Royal Mail and Grey.

Next up, on the 27th May, Richard Anson, Founder and CEO of Reevoo, talks about the value for brands of independent review sites online – make sure you pre-register now.

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  1. [...] social networks, and harnessing vast data pools, Barak is helming the development of WOM ROI and social CRM. 6. Chris [...]


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