American and Canadian 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 from COLLOQUY.
The survey and accompanying research report, “The New Champion Customers,” reveal a direct correlation between reward program activity and consumers’ positive WOM endorsement, in both online and offline channels.
Key survey findings:
- Reward program members are 70% more likely to be WOM champions (defined as those who are “actively recommending” a product, service or brand) than the general population.
- Women, ages 25-50 with annual household incomes between $50K and $75K are the most likely group in the study to be WOM champions for brands they like, while seniors (ages 60+) are the least likely to be brand champions.
- 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 more than 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.
Marketing Databases Underused
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, the study found.
“If your goal is to cultivate and encourage ongoing, profitable customer WOM activity, all of the tools exist within the loyalty marketing database,” said COLLOQUY editorial director Rick Ferguson, who co-authored the study with COLLOQUY Partner Kelly Hlavinka. “Loyalty marketers should find the champions buried within their program memberships, and build relationships that reward them for positive WOM activity.”
Champions Like to Confirm Self Worth, but also Want Free Stuff
The research also examined the demographics and 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:
“WOM champions crave a deeper relationship with their favorite brands and are searching for ways to provide feedback,” said Hlavinka. “Four of these top five responses also reflect the importance of confirming self-worth – that is, a champion feels important when she tells a company what they could do better, when she can share information with her peer group, be ‘in the know’ and share her opinions. And, of course, 63% of champions admit that they engage in WOM activities to earn free stuff.”
About the survey: This survey of 3,610 US and 3,583 Canadian consumers was subdivided into specific demographic segments and by specific WOM behaviors. The report is available for free download (registration required).