I recently listened in on a WOMMA Webinar with Dr. Walter Carl, founder and chief research officer at ChatThreads Corp. Walter is a faculty member at Northeastern University and serves as chair of WOMMA’s Measurement & Research Council. (So when it comes to measuring WOM, he knows his stuff.)

Walter shared interesting information on measuring the value of conversations. In one of the more provocative points in the webinar, Walter shared an analysis of a Premium Pet Food word-of-mouth program he was involved with. Part of his analysis included using ChatThread’s Conversation Value® Model to crank out some ROI data.

For programs they work on, Walter’s company has the ability to track person-to-person conversation ripples and then tie those conversations directly back to sales for a straight ROI analysis. From there, ChatThreads also projects a lifetime ROI measurement.

[Scroll below to jump right into the webinar snippet on measuring conversations. Or, continue reading for some background information on the numbers discussed by Walter.]

The “advocacy campaign” for a Premium Pet Food brand Walter talked about in the webinar started with an initial 5,000 participants. The initial 5,000 people engaged in conversations with people and then, those people engaged others in conversations about this pet food brand.

So, Wave 1 of this program included an initial 5,000 participants in an “advocacy campaign” for a premium pet food brand.
[Wave 1 total: 5,000 people]

The next ripple, Wave 2, saw the initial 5,000 people each carry on a conversation about this premium pet food brand with, on average, 12 other people. Thus, 61,167 people heard the advocacy message for this pet food.
[Wave 2 total: 61,167 people]

Wave 3 saw these 61,167 people pass along the pet food advocacy message to nearly 3 people each, broadening the reach to an additional 173,101 people.
[Wave 3 total: 173,101]

In total, 239,268 people heard the advocacy message about this premium pet food brand.
[5,000 + 61,167 + 173,101 = 293,268]

It’s important to note, all of the people involved in these conversations were not current customers of this pet food brand. According to the study Walter cites, these were all new potential customers.

Watch/listen to this snippet from Walter Carl’s WOMMA Webinar. Pay special attention beginning at the 4-minute mark of the webinar snippet. This is where Walter breaks down the ROI analysis of this program in two ways: (1) straight ROI and (2) lifetime ROI. The straight ROI for this program was 64% and the lifetime ROI was 220%.

All you research wonks probably have a kagillion counterpoints to make. Go for it. I’ll pass-along your rebuttals to Walter and hopefully, he’ll answer your counterpoints.

You may also be interested in reading Walter’s recent article on Measuring WOM Marketing.

Yep, I’m putting my marketing where my mouth is as WOMMA’s in-house evangelist for all things word-of-mouth (WOM).

In this role, I will help WOMMA better communicate with its members and non-members to promote the discipline of Word-of-Mouth Marketing. I’ll also serve as a WOMMA spokesperson addressing hot-button topics covered by traditional media and discussed in conversations happening in the online social media world.  Plus, I’ll be sharing thoughts here … on the ALL THINGS WOM blog.

Those who know me, know I’ve long believed in the power of WOM to increase business sales and brand salience.  Can’t help being a believer. I’ve spent a good part of my marketing career working for two brands that baked word-of-mouth marketing principles into how it does business every day. Starbucks Coffee and Whole Foods Market both became endearing and enduring brands because they each delivered products, services, and experiences customers wanted to enthusiastically share with others.

That’s WOM in action … when people so adore something a company does that they share stories with friends/family in the offline world and with followers/fans in the online world. 

Today, companies like Zappos, Method, Apple, Lego, Fiskars, and Rackspace are all proudly flying the WOM flag high and finding success through tapping into the influential power of customers.

As a marketingologist with my Brand Autopsy consulting business, I show companies how to use basic WOM principles to turn indifferent customers into evangelical customers. When I began my practice in early 2005, one of the first steps I took was to join the just-started Word of Mouth Marketing Association (WOMMA). And if you attended the first WOMMA Conference in March 2005, you probably saw me.  (I was the dude in the white smock.)

So it feels natural for me to work directly with WOMMA as their “WOM Enthusiast.”  

You’ll be hearing more from me, especially on this blog.  Together, we’ll explore the arts and sciences of WOM that sales (and fails), wrestle with ethics issues, and showcase smart analysis from bloggers about all things WOM.

 Thanks for joining me. This’ll be fun.