Dr. Laura Brooks, VP of Methodology and Consulting for Satmetrix, presented on the topic of customer value, highlighting the value of Word-of-Mouth (WOM) advertising and the importance of employee engagement to foster customer loyalty.

With the increasing amount of advertising messages in the marketplace, people often turn to their friends and colleagues for referrals. Dr. Brooks provided research findings that link customer loyalty to positive referrals for multiple industries. Unlocking the full potential value of WOM is yet to be realized in a variety of industries. Quantifying WOM includes studying the actual positive referrals of Promoters and negative referrals of Detractors. For example, Promoters may provide up to 9 positive referrals while Detractors may provide up to 5 negative referrals.

The concept of WOM has an interesting implication for employee engagement and loyalty. Positive word-of-mouth must also be propagated by employees of a given company — a negative message delivered by an employee may have an even greater impact than a Detractor. The challenge for management teams is to foster a culture where employees are driven to focus on customer needs and can take pride in their company's product and customer policies — another reason to consider Fred Reichheld's notion of bad profits.

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