According to COLLOQUY, the recession has tightened consumers' purse strings AND their lips.
COLLOQUY reports that only 58% of consumers today said they have discussions with friends, family and colleagues about their favorite brands, down from 73% in 2008- a 20% drop.
Why such a dramatic decrease? It looks like Word of Mouth activity correlates with consumers' individual financial situations. In fact, 74% of the consumers who see their own financial outlook brightening report having conversations about products and services. However, only 55% of the consumers who say their economic outlook is getting worse report having similar conversations.
So what does it mean?
As the economy gets stronger, more people will be in market for new products and services and Word of Mouth recommendations will continue to grow as a dominant influencer of purchasing behavior.
Direct Marketing News quoted COLLOQUY's Jim Sullivan as saying: "“I believe there's a new era coming,” he said, adding that people will rely “more and more on friends and family” for opinions. Sullivan added that economic improvement should result in an improvement in positive word-of-mouth opinion sharing." (Direct Marketing News).
If Sullivan is right (and we at uRefer believe he is!), what is your company doing to encourage your Advocates to talk about you, or motivate Advocates to refer even when the economy is down?
Call them Brand Advocates, Superfans, Brand Ambassadors or Customer Advocates. Make sure you call them something though, and have a plan to get more, because they are now considered a critical indicator of company success.
"Satisfaction and loyalty are important, but they're old news" says Matthew Rhoden of Rogers & Peppers. "Forward-thinking companies will be the ones that identify and work with their customer advocates to genuinely build the brand, the customer base, and the bottom line."
In "Create Brand Superfans", a recent article published by the Harvard Business Review, Rhoden describes why a focus on building advocacy is more important now than ever:
"Advocacy strongly differs from satisfaction, or even loyalty. It is a business strategy built upon trust, an enduring competitive advantage which has become increasingly important as companies lose control of the brand message to customers who can reach the masses in an anonymous,everlasting way."
Rhoden goes on to describe the three main characteristics that separate Superfans (or Advocates) from other customer types.
- "Supports the brand"
- "Actively promotes the brand"
- "Is emotionally attached to the brand"
Rhoden then discusses many really great ways to convert customers into Advocates (and therefore increase advocacy) including creating "extraordinary experiences" for good customers. Another way to increase Advocacy is to reward the Superfans you already have.
Although the article highlights the importance of using Superfans as an indicator of success, Rhoden doesn't really explore how a company can track and measure Advocacy to make sure they're on the right path. Of course, implementing customer centric practices are always a good idea for increasing fans, but equally important for an "Advocacy focused" strategy is having the ability to identify your Advocates, track their referral activity, and report on the success of the marketing efforts aimed at increasing brand advocacy.
Click here to see more information on how you can track and manage your Advocates: http://www.urefer.com/site/what-we-do/referral-management-system/umanage
It's no secret that marketers today have a lot of choices when it comes to choosing their marketing channels. But, as Chief Marketer reports in their article: Finding the Right Multichannel Mix, its not enough to choose a couple and run with them. Marketers have to expose customers and prospects to various channels, watch how they respond, and carefully track the success rates of each one.
"It is no longer appropriate to try and funnel the consumer into the purchase channel you favor. It is imperative to interact with them in the manner they prefer", writes Chief Marketer's Scott Kellerman. "This customer-centric commitment must be made across all potential touchpoints and must offer a consistently positive experience to truly nurture brand advocacy."
So how does a marketer choose their strategy to implement a multichannel marketing mix? Here are some basics to consider:
- Understand Your Touchpoints: Every company has touchpoints with customers and potential customers- whether it be in-store, through email, website, at conferences etc. The channels you choose should optimize each of these touchpoints.
- Give your Customers and Prospects Options at Each Touchpoint: Let's say a current customer lands on your website. What do you want them to do? Buy something, right? Sure- but to reach that end, you have to change your thinking: What do they want to do? Do they want to buy? Do they want to research what others are saying about you on facebook first? Or, are they looking for information to tell someone else about you? All of these are actions that will help you grow your relationship with you customers and the easier you make it the more success you will have.
- Track what your customers/prospects choose: Now it's time to pay attention. To continue with the website example- what did most of your visitors choose? How many found what they wanted and stayed on your site for more than a few seconds? How many bought? How many went to facebook? How many chose to make a referral to others? You may be tempted to just compare the upfront stats from each of these choices and commit to the one that got the highest numbers- but there's still another (very important) step!
- Analyze and Measure Longterm Success: In order to know how each channel is performing, marketers must go beyond initial numbers. For example: Take the visitors who came to your website and chose to make referrals instead of buying. They produced no immediate revenue, but if they produce three new customers over the next month the revenue that those new customers bring in have to be counted as a result of that channel. Or if you find that people that make a purchase immediately only spend $100 on average, but those who come in after reading the comments on your facebook page spend twice that amount- that also has to be factored in as a success of the channel.
For more information on how to track and measure a referral channel for your company- read about uRefer's Advanced Analytics.
We invite you to read uRefer's new white paper on Referral Programs in the Banking Industry. Here's an excerpt:
Top banks throughout the world use referral programs to acquire new customers. And they’re working!
Customer referral programs have been proven to increase new customer accounts, lower customer acquisition costs and decrease customer churn. But not every refer-a-friend effort is a success. Referral programs in the banking industry require the right amount of promotion, management and tracking to be an effective and sustainable marketing channel. . .