Measuring the Success of Word of Mouth

Paul Marsden

This paper provides data showing that customer word of mouth recommendation rates predict sales growth for retail banks, car manufacturers, mobile phone networks and supermarkets in the UK.

Measuring the Success of Word of Mouth

Paul MarsdenEnterprise LSE

How do you measure word of mouth? The answer to this question lies in a story involving extraordinarily long tea breaks, telephones, freak lighting and confused market researchers. The time is 1924, and the place is Cicero, a suburb of Chicago, Illinois. In Cicero lies the manufacturing plant of Western Electric, the largest electrical manufacturer in the United States in the early 20th century, and the company that one day was to become Lucent Technologies.

Among other inventions, Western Electric brought the world the loudspeaker, sound to movies, the...

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