Measuring the impact of customer word-of-mouth

Oct 11, 2012

(—Facebook advertisers know that we are more likely to trust brand endorsements if they come from our friends, yet University of Queensland student Teegan Green says many businesses underestimate how much it costs them when people share negative experiences.

Ms Green, from UQ's Faculty of Business, Economics and Law, recently won the inaugural Three Minute Thesis (3MT) competition for honours students, with an enthusiastic oration on her thesis, Good Firm Gone Bad - Financial Costs of & Behaviour: Customer Responses to Service Failure and Recovery.

Originally developed by the UQ Graduate School in 2008, 3MT challenges research higher degree students to explain their research to a non-specialist audience in just three minutes. This year, the Office of Undergraduate Education (OUE) made the competition available to honours students, so that they too could hone their research communication skills.

In her 3MT presentation, Ms Green spoke of the financial impact to firms as more consumers share information in ever-expanding networks.

"I conceptualise the effects of six degrees of separation and online social networks as customer network power, and integrate this into the current formula for calculating customer lifetime value to firms," Ms Green said.

"If you share word-of-mouth about a service failure in your online network you never quite know who will be the consumer of the information you post as it is diffused online through multiple connections," she said.

"It's that old idea of you've met someone, who's met someone else, who's met someone else, who's met, say for example, The Queen of England!"

Her research aims to show that consumer value to firms shouldn't be measured merely in terms of what a person can buy, but the impact they have in their complex web of interaction, and consequently, that firms should be prepared to invest more in providing good customer service when they fail to meet expectations.

"My thesis can help firms calculate that customers are worth more than they currently estimate, so when service failures occur, if your flight is cancelled for instance, they will be more likely to offer you a service recovery!" Ms Green said.

Ms Green isn't immune to public speaking nerves but said they were part of the excitement of sharing your curiosity and passion.

"You can really hone in on that three minute 'elevator pitch' to say why your research is important, not just for you as a researcher, but for the broader community," she said.

"There is a definite buzz that comes from distilling a 20,000 word thesis and a year's worth of work into just three minutes - it has been one of the best experiences I have ever had."

OUE's Acting Director, Dr Jessica Gallagher, said that the Undergraduate Research Conference (URC), which included the 3MT competition for honours students, was an important feature of UQ's Research Week.

"The URC reflects the university's commitment to fostering the next generation of innovators, like Teegan, and to providing opportunities for students to enhance their communication and presentation skills," Dr Gallagher said.

"We were keen for honours students to tackle the 3MT challenge and were very impressed by the level of interest and calibre of entries. We are already looking forward to the 2013 competition," she said.

OUE coordinates a number of research programs for undergraduate students, including the Summer Research program, where Ms Green got her first taste of research.

"My summer research experiences were amazing and confirmed that I was passionate about pursuing a research career," Ms Green said.

With plans to expand her research into a PhD with the UQ Business School, no challenge is too big for this shooting star.

"I love studying, thinking, teaching and researching and to continue on to a PhD is a way I can live out these passion," she said.

"I most definitely recommend that all students become involved in research - the benefits are endless."

Explore further: Economist probes the high cost of health care

Related Stories

UQ students name and describe insect species

Nov 15, 2011

( -- Third-year Biological Sciences students at The University of Queensland have applied their knowledge from the classroom to name and describe a species of gall insect; Apiomorpha nookara.

E-learning a powerful tool for teaching the arts

Apr 07, 2011

( -- Learning in dance and drama has traditionally involved face-to-face tuition, but that may change following Victoria University research into the potential of online tuition.

Campus green spaces enhance quality of life

Sep 29, 2008

The next time you see students playing an energized game of touch football or studying in the sunshine on a college quadrangle, consider this: campus green spaces can help students feel better about life and improve learning.

Recommended for you

Do government technology investments pay off?

7 hours ago

Studies confirm that IT investments in companies improve productivity and efficiency. University of Michigan professor M.S. Krishnan wondered if the same was true for government.

Study finds assisted housing works, but it could be improved

7 hours ago

Two researchers from the University of Kansas Department of Urban Planning have just completed a study on the locations of assisted housing units and assisted households across the nation. It examines one of the key issues ...

Economist probes the high cost of health care

Mar 27, 2015

When Zack Cooper arrived at Yale as assistant professor of public health and economics, he gained access to a first-of-its-kind dataset. Working with the non-profit Health Care Cost Institute, Cooper and ...

Cash remains king in Chile but its days could be numbered

Mar 26, 2015

For more than a year now, Chileans have endured a crisis of cash access. Despite global moves toward new forms of payment such as contactless and mobile transfers, the crisis in Chile highlights the continuing ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.