How to Estimate Sales Lift From Word of Mouth Marketing

“How much sales lift will we get by energizing our Brand Advocates?” We get this question a lot from our customers and prospects.

The answer is “it depends.”

KEY FACTORS

It depends on lots of factors like:

  • How many Advocates are energized to spread positive Word of Mouth
  • How often Advocates are energized. (Ongoing programs deliver the biggest benefits.)
  • Scope of Advocate activities and recommendations
  • The importance and priority you give to energizing Brand Advocates

SIMPLE WAY TO ESTIMATE SALES LIFT FROM WORD OF MOUTH

We create detailed estimates of the media and sales value that prospects and customers will get from energizing their Advocates.

However, if you need a simple, back-of-the-envelope approach to estimating the sales lift of advocacy, here’s a way to do it:

  1. Start by estimating how much sales you get currently from Word of Mouth. Many companies get 50% or more of their business from Word of Mouth, studies show. If your company’s revenues are currently $100 million and 25% of your sales are attributable to Word of Mouth, you currently get $25 million in sales from WOM. (Note these sales are occurring without the benefit of a systematic WOM marketing program.)
  2. Estimate the sales lift you’ll get from systematically energizing your Brand Advocates to spread WOM. Assuming your company implements an ongoing WOM marketing program, this should increase by about 50% or more the amount of sales you get from Word of Mouth. In the example above, the sales lift from a programmatic approach to WOM should be about $12.5 million during a 12-month period.

WHY 50% BOOST?

Here’s why we estimate that a programmatic approach to WOM will boost sales by 50% or more:

  1. The sales you’re getting today from WOM are occurring without a WOM program. A WOM program will turbo-charge Word of Mouth for your company, giving you additional benefits from WOM including increased sales. It’s like working with a personal trainer and sticking to a fitness program versus doing it alone.
  2. A WOM program will amplify the positive Word of Mouth that exists today.  By giving your Advocates social media microphones, this will increase their reach and effectiveness. This will in turn generate more referral leads and sales from WOM.
  3. A WOM program also will create new Word of Mouth. By giving a voice to other customers who may not have been pro-actively recommending you, this also will generate more referral leads and sales from WOM.

REAL-WORLD WOM

The only real way to measure the sales lift from WOM marketing is to measure the before/after impact.

Norton, the consumer brand of security software giant Symantec, saw its revenues on Amazon increase by $26 million several months after it started energizing its Advocates.

That’s a sales lift that should please just about any head of sales or marketing.

-Rob Fuggetta, Founder/CEO, Zuberance