The ROI of Word of Mouth

Sean O'Driscoll is Microsoft's very smart communities guru. Read his blog: "Community Group Therapy"

Needless to say, in that role he's dealt with user communities on a scale that most of haven't seen.

And yet, he still needs to deal with the question that haunts all of us social media evangelists: What's the ROI? I get twitchy when I hear it, because it should be self evident that deep, quality relationships with your customers are a fundamentally good thing.

My magic formula: BE NICE TO PEOPLE AND TALK TO THEM! THAT'S HOW YOU MAKE FRIENDS. FRIENDS TELL OTHER FRIENDS THAT YOU'RE COOL. AND THEN THEY BUY YOUR STUFF.

But in all seriousness, companies do need as much decision-making support as they can get, and that's usually in the form of ROI measurement.

Sean does a great job of laying out a fairly comprehensive list of all the paybacks word of mouth marketing:

- Support savings
- Sales & marketing
- Product development

Read the full blog post ... it's got a ton of great ideas.