Word of Mouth from non-loyal customers has the biggest impact on sales

When you are trying to “fabricate” Word of Mouth (WOM) for your offerings, who do you think of approaching first? Chances are that your first choice is to enlist the help of your most loyal customers. After all, they have the success stories to tell others, they like you, and you have an existing relationship with them – it’s a “no-brainer.”

In reality, additional WOM from that group will have the least impact on your sales because those people likely already told their networks about how good you are. It’s the WOM from non-loyal customers and prospects, those who have not informed their network about you (or may not even know you yet) that will have the highest impact on sales. When you think about it that way it makes just as much sense as Peter Drucker saying that most firms should focus their new product innovation on non-customers since 70% of all customers that will be needed to ensure a firm’s future revenue are not currently customers..

You don’t buy it? Well fortunately there are a couple of studies by David Godes and Dina Mayzlin that prove this point. They did find that the impact of WOM from non-loyals on sales was indeed bigger than the impact of WOM from loyal customers. The other counter-intuitive (or maybe not) observation that came out of the study is the fact that among the non-loyal customers, it is not the opinion leaders who will be buzzing. Opinion leaders, or experts, will only buzz about stuff that they feel strong (and thus loyal) about. The people who seem to be the most effective buzzers within the non loyals are all highly connected. It is not clear, however, whether highly connected individuals are a good predictor of becoming an effective buzzer – making for a tricky targeting strategy.

Original Post: Word of Mouth from non-loyal customers has the biggest impact on sales