Loyalty schemes likely to breed 'WOM champions'

Prestige and personal gain are the two main factors that motivate Canadian consumers to become word-of-mouth (WOM) champions for their favourite brands, according to research from Colloquy.

As defined by Colloquy, a 'WOM Champion' is a customer who is actively recommending a brand, whether in a conversation with a relative, in an email to friends, in a Twitter posting, or a Facebook wall message.

Colloquy partner Kelly Hlavinka explained: "The personal nature of the communication by a WOM Champion adds credibility. A Champion's endorsement is highly valued by marketers because it cannot be bought - it must be earned."

When the company asked more than 3,500 Canadians why they engage in WOM activity regarding their preferred products, services and brands to people within their networks, the top five motivations of WOM Champions were:

1. To be the first to discover new items: 71%;
2. To get free product samples: 66%;
3. To be educated about products and services: 66%;
4. To tell manufacturers what I think: 63%;;
5. To share my opinion with others: 58%.

Clearly, WOM Champions relish the chance to tout a restaurant, a favourite hotel, a car company or a mobile phone service.

"We all like to compare ourselves to the guy down the street, in the next city or across the country, especially when it comes to something as personal as recommending an experience. It tells us something about ourselves. But for marketers, these insights into the motives of why key customers talk are invaluable," said Hlavinka.

The research also revealed significant evidence of a direct correlation between reward programme activity and consumers' positive WOM endorsement activity. Some of the study's key findings included:

• Loyalty programme members are 127% more likely to be WOM Champions than the general population;
   
• 31% of loyalty programme members are self-described WOM Champions;
   
• Only 15% of non-loyalty programme members are self-described WOM Champions;
   
• 68% of WOM Champions in loyalty programmes intend recommend a programme sponsor's brand within a year;
   
• Actively participating loyalty programme members are over 3 times more likely than non-active members, and over 7 times more likely than non-members, to be WOM Champions.

"This shows that a company's loyalty marketing database is an under-utilised social network that marketers could do well to exploit in the pursuit of positive, profitable WOM activity," concluded Colloquy's editorial director, Rick Ferguson. "Marketers must locate the champions buried within their programme memberships, find ways to encourage WOM activity, and reward those champions for positive WOM behaviour."