Ask the owner of a popular cafe or restaurant to explain why the tables are always full and the chances are that "word-of-mouth recommendation "will be cited as a key driver of success. The same principle can be applied to brand marketing. Consumers don't always trust ads but when friends and peers endorse products, they tend to sit up and listen. So, how best can the power of word-of-mouth endorsement be used effectively at scale?
We've probably all received messages from brands - often via email - inviting us to refer a friend. Usually, these are incentivized in some way, for instance, by discounts on future purchases or a reduction in subscription costs. Referral - and more broadly advocacy - programmes are very much part of the marketing toolkit. It's not hard to see why. Jos Govaart is co-founder at Coopr. As he sees it, advocacy programmes strengthen the relationship between brands and their consumers. "Scientific research shows that online brand advocacy has a strong correlation with brand loyalty," he says. "The more consumers vocalise their brand relationships, the more they strengthen their relationship with the brand."
But are brands taking full advantage of their power of advocacy?Well, some clearly are. For instance, Bloom & Wild is a UK-headquartered online flower delivery company with operations in Britain, France, Germany and Ireland. As part of its UK sales operation, the company offers discounts on future orders to those who refer friends. Three referrals equate to a saving of £30. During the pandemic - when referral became the only marketing channel - Bloom & Wild's sales increased by 800%.
So clearly word-of-mouth recommendations can play a huge part in driving revenues. Well, perhaps. Andy Cockburn is CEO of Mention Me - the company that provides the platform for Bloom & Wild's scheme. He says many marketers are not making the most of the opportunities. "Referral and advocacy should be at the heart of marketing," he says. "But they really aren't." Cockburn, who founded Mention Me nine years ago, cites his previous experience with a travel company as an example of how consumer advocacy is not as effective as it might be. "We knew that about half our customers came in on the back of recommendation," he says. "But the referral programme itself was only generating about 2.0%." In other words, customers were talking about the product and making recommendations to each other but the positive buzz was not reflected by traffic coming through the formal referral scheme.
And as Cockburn sees it,referral schemes often fail to take account of human psychology. Or to be more precise, why consumers recommend products to their peers and why they don't. "There are two factors at work," he says. "Social risk and social capital." The former - social risk - is a deterrent. Consumers don't want to recommend anything to their friends that might not be relevant or appropriate. "We don't want people to think badly of us," says Cockburn. On the other hand, referring a friend to a product they're going to like carries tangible benefits. "People will feel better about me if I make a good recommendation."
Cockburn believes that consumers will be happy to recommend brands they really love. Working on that principle, he says it is better to target any invitations to refer a product at those who are genuinely fans of the brand. The question is, of course - how do you identify them and - equally important - how do you bring them on board and use them effectively?
Cockburn recommends gathering as much data as possible. Mention Me's platform uses AI and machine learning to "assess which customers have thegreatest propensity to make referrals."Equally, it helps to identify the best points at which to make the referral request. Usually, this means the stage in the customer journey at which the relationship with the brand is at its most positive. For instance,a travel company might target customers who have just returned from holiday. Of course, for many marketers, the most effective advocates are the "superfans" talking about their favourite brands on social media. They might be Youtube creators, enthusiastic users of Instagram, or regular posters on Facebook. The question is, how do you find them?Again, data is the key to success. "We use software to search and identify potential advocates," says Govaart. "We use the tool Stellar. We look at profile, performance, demographic data, brand affinities and past collaborations."
Salla Västilä, CEO of full-service digital agency, Ainoa, says there are a number of ways to find suitable advocates."It depends on your budget. If you have money to spend, you can turn to user-generated content and/or influencer agencies that will find your super fans and advocates for you and manage them. In exchange, you will get quality content from super fans and top influencers within your niche. A less expensive way to do it is to use social listening tools or search blogs, Youtube videos and social media posts. The key is not just to identify the content creator but also those leaving comments or likes," she says. The next step is to get the ambassadors on board. Coopr has carried out ambassador/advocacy campaigns for a range of brands, including Fanta, Adidas and Linkedin. Govaart outlines the agency's approach. "This part looks like a targeted PR pitch. We craft a story that is tailor-made for ambassadors."
Influencers or Advocates
But can the recruitment of bloggers or Youtube creators really be categorized as word-of-mouth marketing? A popular blogger or Instagram influencer will be reaching out to an audience of thousands, hundreds of thousands or, in a few cases millions. Very few of them will be friends or peers. Well, this is where the micro-influencers enter the picture. Oliver Bourne is CEO of WYSPR, a platform that helps brands recruit social media users who are primarily talking to their friends. "Our mission is to turn ordinary consumers into influencers," he says.
The principle is a simple one. Instead of onboarding one influencer with 100,000 fans, you instead deploy 100 "friendfluencers"who each have, perhaps, 100 followers. Their reach is much smaller than conventional influencers but their relationship with their friends is much stronger." The advantage of this approach, he says, is simple. "People are five times more likely to convert if they are recommended a product by a friend."Bourne says this is evidenced by a superior engagement rate. Influencer content, he says, has an engagement rate of about 2.4% of the total audience. In contrast, The engagement rate between friends on social media is about 24%. WYSPRs campaigns so far include restaurant chains Yo Sushi and The Athenian. In the case of Yo Sushi fans were asked to visit their local branches and tell their friends about the newly installed food conveyor belts. Bourne says this highlights another advantage of peer-to-peer messaging - it can be highly localized as friends tend to live fairly close to each other.
There's a question here. If they are part of a campaign, social media ambassadors rarely work for free. So isn't there a risk that consumers will simply see advocacy as advertising? Govaart stresses that brands have to be clear about their intentions and ambassadors should also be transparent when posting on social media. Bourne points out that although micro-influencers are being paid, they generally don't want to undermine their own credibility by endorsing brands they don't love. But do brands really need to spend on this? Why not simply allow friends and peers to make recommendations to each other without any brand intervention or management? After all, that is what word of mouth is all about and it goes on all the time on social media. Well, in managing the process, you collect data on customers and their motivation. As Cockburn points out, this data can help brands "identify their unique selling points." The data can also be used to expand the audience. "You can identify an audience just like your super fans and reach more people who are willing to spend big bucks on your products," says Västilä.