Reward Program Members 70% more likely to be Word-of-Mouth Champs than Non-members.
January 4, 2009
Consumers who are loyalty reward program members are far more likely to be Word-of-Mouth (WOM) champions for their favorite brands than non-members, and the more active their program participation, the more likely they are to exhibit WOM behavior, according to a study released by COLLOQUY.
The COLLOQUY analysis offers significant evidence of a direct and important correlation between reward program activity and consumers’ positive WOM endorsement activity. Here are some of the key findings:
• Reward program members are 70% more likely to be WOM champions (defined as customers who are “actively recommending” a product, service or brand) than the general population;
• 55% of reward program members are self-described WOM champions;
• Only 32% of non-reward program members are self-described WOM champions;
• 68% of WOM champions in reward programs will recommend a program sponsor’s brand within a year;
• Actively participating reward program members are over three times more likely to be WOM champions;
• Reward program members who have redeemed for experiential rewards are 30% more likely to be WOM champions than those who have redeemed for discounts.
The COLLOQQUY research shows that a company’s loyalty marketing database is an under-utilized social network that marketers would do well to exploit in the pursuit of positive, profitable WOM activity.
“If your goal is to cultivate and encourage ongoing, profitable customer WOM activity, all of the tools exist within the loyalty marketing database. Loyalty marketers should find the champions buried within their program memberships, and build relationships that reward them for positive WOM activity,” said COLLOQUY Editorial Director Rick Ferguson, who co-authored the study with COLLOQUY Partner Kelly Hlavinka.
COLLOQUY is a provider of loyalty marketing publishing, education and research. In October 2008, COLLOQUY conducted a consumer research survey designed to explore the intersection of consumers who participate in reward programs and their WOM activity regarding brands, reward programs and specific product categories. This survey of 3,610 U.S. and 3,583 Canadian consumers was subdivided into specific demographic segments and by specific WOM behaviors.
The COLLOQUY research also examined the motivations of WOM champions—asking why they engaged in WOM activity regarding their favorite products and brands and what categories of offers and information they were most likely to pass along to others within their networks. The top five motivations of WOM champions were:
• To tell manufacturers what I think……………. 73%
• To get smart about products/services……… 68%
• To be the first to discover new items ………. 68%
• To get free product samples…………………… 63%
• To share my opinion with others …………… 61%
“These statistics reinforce the importance of social capital to WOM champions,” Hlavinka said. “Indeed, the self-reported motivations of these consumers reflect its importance—‘to be first’ and ‘to share my opinion’ were both top five motivations. What surprised us were the top two motivations for WOM Champions— ‘to tell manufacturers what I think,’ and ‘to get smart about products and services.’”
