How Much Money are You Losing by Not Activating Word of Mouth?

Many companies get more than half of their business from Word of Mouth (WOM.) How much money do companies lose when they wait to harness the power of WOM? Here's an example from the fitness industry. As the chart shows, this fitness club is losing $1.2 million in revenues by not energizing its highly-satisfied customers to spread positive WOM and generate referral leads.

This is actually a very conservative estimate on how much companies may be losing by not activating WOM, considering (again, using the fitness industry example):

  1. Many fitness companies generate much more than $1,200 per year per member. On average, each member at a higher-end fitness club may be spending about $5,000 per year.
  2. This estimate doesn't take into consideration the lifetime value of each member acquired via a WOM referral. If the average tenure of a member at a higher-end club is five years, the value of each customer acquired via WOM referrals is actually $25,000 (5 years x $5,000.)
  3. The estimate below is for a single member only. Family memberships are also from WOM referrals.

To calculate the value of energizing your Brand Advocates, download our "What's a Brand Advocate Worth?" whitepaper.

To learn how fitness chains can yield a 9X ROI by leveraging Word of Mouth, download the Club One Fitness case study.

-Rob Fuggetta, Founder/CEO, Zuberance