The Influence of word-of-mouth in customer acquisition in service companies

a six markets model analysis

Martin Williams, Francis Buttle

Research output: Chapter in Book/Report/Conference proceedingConference proceeding contribution

Abstract

Many authors maintain that word-of-mouth (WOM) from satisfied customers is a significant contributor to customer acquisition, and professional firms and SMEs rely on it. However, we know little about how WOM processes work for service firms, and how managers can influence recommendations. This multiple case study of three service organizations is used to explore the significance of WOM as a contributor to new customer acquisition. Even when organizations focus on and apply sizeable resources to customer relationship management (CRM) in order to achieve customer satisfaction, WOM is weak and very much less significant than anticipated. WOM’s power in attracting new customers lies in organization-influenced WOM and relationship marketing networks. Some of these organization-influenced WOM processes are managed, some are relatively unrecognized, but all may be important contributors to new customer acquisition. We believe a sound understanding of the organizational factors influencing WOM amongst customers and non-customers may help to create more pro-active and productive communications within organizations, and more effective use of WOM in customer acquisition.
Original languageEnglish
Title of host publicationANZMAC 2007
Subtitle of host publicationproceedings : 3Rs - reputation, responsibility and relevance
EditorsMaree Thyne, Kenneth R. Deans, Juergen Gnoth
Place of PublicationDunedin, N.Z.
PublisherUniversity of Otago
Pages1559-1567
Number of pages9
ISBN (Print)9781877156299
Publication statusPublished - 2007
EventAustralian and New Zealand Marketing Academy Conference (2007) - Dunedin, New Zealand
Duration: 3 Dec 20075 Dec 2007

Conference

ConferenceAustralian and New Zealand Marketing Academy Conference (2007)
CityDunedin, New Zealand
Period3/12/075/12/07

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Keywords

  • word-of-mouth
  • customer acquisition
  • lead generation
  • network marketing
  • customer relationship marketing
  • services marketing

Cite this

Williams, M., & Buttle, F. (2007). The Influence of word-of-mouth in customer acquisition in service companies: a six markets model analysis. In M. Thyne, K. R. Deans, & J. Gnoth (Eds.), ANZMAC 2007: proceedings : 3Rs - reputation, responsibility and relevance (pp. 1559-1567). Dunedin, N.Z.: University of Otago.