Evaluating customer values by word-of-mouth: An empirical study of a telecommunication network

Abstract

Word-of-mouth (WOM) is an important way for companies to gain new customers and new value, therefore the indirect value a customer brings to the company through WOM should not be ignored. The empirical analysis on the data of a wireless service provider shows that customers' WOM value is very comparable to their direct values. In addition, the WOM value is positively related to the customers' social capital and has an inverted U-shape link to the proportion of weak ties within the customers' social network. These findings extend the previous understanding on customer value from direct value to indirect value of WOM, and provide some insights on the antecedents of WOM value.