Digital Hive: March 2009

What we're reading for inspiration

Gerald Zaltman: How Customers Think: Essential Insights into the Mind of the Market
We heart Jerry. His groundbreaking methods reveal the true drivers of customer behavior. You'll never be satisfied with a focus group again. (*****)
Ben McConnell: Citizen Marketers: When People Are the Message
Could we heart this book (and its authors) more? NO. Essential reading for anyone in marketing in 2007.
Martha Barletta: Marketing to Women: How to Understand, Reach, and Increase Your Share of the World's Largest Market Segment
Fantastic description of the biological drivers of the differences between how men and women think and behave.
Radu Stern: Against Fashion: Clothing as Art, 1850-1930
Fascinating description of how fashion expressed underlying social values and tensions. Wonderful visual history of fashion in the western world 1850-1930.
Eric Ericson: Design for Impact: Fifty Years of Airline Safety Cards
A fascinating visual history of how graphic designers have tried to equip airline passengers for disaster
Charles Yang: The Infinite Gift: How Children Learn and Unlearn the Languages of the World
Fascinating description of how humans learn language skills.
Sina Najafi: Cabinet 22: Insecurity (Art and Culture)
Cabinet magazine (it's a quarterly) is a provocative roundup of interesting cultural phenomena
Ron Galella: Disco Years
A larger than life homage to the personalities and habits of Studio 54's most infamous patrons. A fascinating document of American culture's excess and quest for self expression.
Adam Morgan: The Pirate Inside: Building a Challenger Brand Culture Within Yourself and Your Organization
What can we say, we heart Adam Morgan. A primer on how to blow up the old push marketing approach to brand and substitute a customer-driven "listening" approach.
Bruce Sterling: Shaping Things
A manifesto for the future of design, impeccably crafted by Bruce Sterling and ehnahced by the delicately emphatic graphic intelligence of Lorraine Wild.

March 24, 2009

Friend me! I am publishing short bits and bytes on FaceBook these days

Peeps - sorry for the recent brownout, been busy, but also have picked up a nasty habit of posting stuff on FaceBook. If you're a Digital Hive fan please friend me on FB to get those updates. And I also pledge to get back to the Hive with new stuff soon (starting today). XO

Posted by Jeff Flemings - blog editor on March 24, 2009 at 12:21 PM | Permalink | Comments (0) | TrackBack (0)

WOMinomics - or why it makes economic sense to stimulate positive WOM

Mega thanks to my buddy and WOM guru Jackie Huba for a super post about the economics of word of mouth. You guys know how much I loves the math!

According to Satmetrix, who developed the Net Promoter Economic Framework, which determines total customer value based on buyer and referral behaviors of "Promoters" (those who are highly likely to recommend a company and/or its products) and "Detractors" (those who are unlikely to recommend a company and/or products), in a wireless industry study they did (Net Promoter Economics: The Impact of Word of Mouth), each Promoter was worth approximately $1,700 and accounted for roughly one-half of a new customer acquired through positive word of mouth. In comparison, each Detractor accounted for the loss of 1.3 new customers through negative word of mouth.

The lost business associated with their negative referrals subtracts the entire value of their purchase behavior and then some, creating a net cost of $300. Compared with the value of a Promoter, each Detractor is worth $2,000 less than a Promoter.

OK, so, this seems like common sense to me. But what I think is really interesting is to see the economics of WOM quantified. Now, what can we do with this info?

First off, know who you are targeting. Don't acquire detractors. In addition to being bad sources of long term revenue, they'll facilitate losing other customers. If there is any way to excise them from the acquisition process, DO IT. I do not know how to do this, if you have ideas please share.

Second, identify your promoters and encourage and equip them to share good stuff. Enable them to tell their friends they love the product or experience.

Other ideas?