Word of Mouth and Active Members

Download Transcript

The relationship between advertising and membership is linear. However, there is a reinforcing relationship among the level of Active Members, Referrals, and New Members from Word of Mouth. That means word-of-mouth creates the potential for exponential growth in membership.

In this lesson, we’ll do the following:

  • Add the Referrals, Referral Rate, and Persuasion Fraction variables to the model.
  • Define the formula for calculating New Members from Word of Mouth.
  • Trace the reinforcing feedback loop among Active Members, Referrals, New Members from Word of Mouth, Joining, and back to Active Members.

Reflection Questions

  • What factors impact the rate and persuasiveness of referrals by members to prospective members?
  • As a community host, how might you influence the Referral Rate and Persuasion Fraction?
  • How might advertising and word-of-mouth influence each other?
  • How might the degree to which your members and prospective members are connected socially in meaningful ways help or hinder word-of-mouth?