Marketers missing out on loyal advocates

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By: Wise Marketer Staff |

Posted on November 15, 2011

Marketers missing out on loyal advocates

Today's consumers are more interested in making a purchase based on a personal recommendation or an honest online review rather than information gathered from advertisements, according to research by customer experience consultancy Onva.

The study found that companies' most loyal customers - termed 'the recommendation generation' - are keen on driving positive word-of-mouth (WoM) to help drive sales for their preferred brands and suppliers.

In fact, most British businesses were found to have failed to adjust to the needs of the Recommendation Generation, wasting billions of pounds on out-of-date sales and marketing techniques.

  Purchase InfluencersFriends 51% E-reviews 19% Newspapers 10% Adverts 10% Celebrities 6%Most consumers said they prefer to use word-of-mouth to make their purchase decisions, with 70% saying they are more likely to buy a product or service as a result of a personal recommendation or online review, which only 10% are likely buy a product based on an advertising campaign.

Reinforcing this finding, only 16% said they would spend money on advertising to make a brand more attractive, while 64% said they would invest in providing a better experience to give customers more reasons to recommend.

"Consumers want to be listened to and involved in a brand's future, and all they get at the moment is an expensive diet of advertising," warned Matt Manners, managing director for Onva. "It's clear that marketing budgets are not yet split accordingly: how much do businesses really spend on listening to customers and on stimulating recommendations from loyal customers?"

When asked for their response to the huge amount of money regularly spent by businesses on failed advertising, almost half of the consumers surveyed (45%) agreed that "it's shocking - they should find a lower-cost way to communicate their message and keep more people employed".

And when respondents were asked what would make them more likely to continue buying a product or service, almost half (48%) said they would like a company to listen to them and act on their feedback, while 28% wanted exclusive access to products before anyone else. In fact, the desire to be involved in the brand was supported by 25% who said they wanted to be actively involved in the development of new products and services, and 22% who wanted advance information about new products and developments. By contrast, fewer than 10% said they would be swayed by a big advertising campaign, and only 6% would be influenced by a celebrity endorsement.

Among the study's other findings, influences that are most likely to encourage consumers to try a new product or service currently include:

  1. Recommendations from a friend (51%);
  2. An online review from another consumer (19%);
  3. A story in a magazine or newspaper (10%);
  4. An advertising campaign (10%);
  5. A celebrity endorsement: (6%).

Factors which consumers feel would most help keep them loyal to a brand's products and services included:

  1. The company listens to me and acts on my feedback (48%);
  2. The company lets me try new products before anyone else (28%);
  3. The company involves me in the development of new products and services (25%);
  4. The company gives me advance information about new products or services (22%);
  5. The company spends a lot of money on advertising campaigns (9%);
  6. The company uses celebrities in advertising campaigns (6%).

And finally, marketing strategies that consumers feel would help make brands more attractive to them included:

  1. Providing a better experience for customers (36%);
  2. Giving customers more reasons to recommend the company (28%);
  3. Developing a new product or service (18%);
  4. An advertising campaign (16%);
  5. Other (2%).

"Consumers listen to other consumers and are increasingly deaf to what business and marketing executives want to tell them," concluded Manners. "So involving the customer is the key to success. They want to be listened to, they want their feedback and loyalty to matter, and they want to help shape future developments and be given the 'inside track' on what will happen next.

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