Do brand advocacy schemes really work?

Clusters : Chris Cowan Chris Cowan, October 6th 2016 B2B B2C Marketing
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A few months ago I spoke at the annual TEDx London Business School conference on the topic of advocacy and how word of mouth actually works. Advocacy is a much used, oft-misused term in business. But what does it actually mean and what can it do?

It’s really just word-of-mouth. If someone tells you something is to be tested or avoided, you might listen. If someone you trust tells you, it’s usually more powerful than a stranger from a marketing activity that you can spend your money on.

We’ve been using word of mouth since we’ve been able to talk. Gossip was essentially social media 1.0. It spread slowly, from person-to-person and group-to-group, but word eventually got around whether it was true or not.

This went on until print media and advertising changed it all. The ability for one source to reach out to multitudes across the world changed the landscape. It allowed a few people to dictate what many read, heard, and saw and put control of the narrative firmly in the hands of those very few. But now, social media has swung that balance of power back the other way.

As individuals, we now have the ability to transmit our experiences and opinions to as wide an audience as any broadcaster, potentially reaching vast groups of people across the globe. They in turn can reach many more people, creating the potential for a viral spread of grass roots communication, the kind of communication that can raise hundreds of millions for charities, resurrect old brands, change a media exec’s decision on what to show on television, and make or break your business.

As such, it comes as no surprise that businesses are scrambling to make the most out of social media; word of mouth marketing is worth billions to businesses, and there are many companies willing to pay good money in order to reach a larger audience this way. But the essential question that comes with this is working out if paying for positive word of mouth marketing is really worth it?

Paid recommendations are changing the world of word-of-mouth marketing and we were very curious about the effects those changes are having and wanted to uncover exactly how money was influencing it. So, as a segmentation company, we decided to segment and look at the results.

 

Types of recommendations

We found that recommenders can be split into eight distinct segments, three of whom are motivated by reward, with one segment motivated purely by cold, hard cash. Importantly, this last cash-driven segment accounts for two thirds of all recommendations.

This would make schemes like ‘recommend a friend’ programmes and similar, seem like really good return on investment for these people. But in reality, they aren’t. And to understand why, we need to understand how recommendations really work.

 

How people respond to recommendation approaches

We found three key attributes that drive recommendation effectiveness and they are, in order of importance:

  1. Timing: am I in the market for this recommended product/service right now?
  2. Expertise: do I trust the credibility of person recommending to me, that they really know what they’re talking about on this particular topic?
  3. Relationship: do I personally trust the person recommending to me enough to take seriously what they’re telling me?

Even if people aren’t currently in the market, many still take up unsolicited recommendations. This is especially true for high interest categories like restaurants, music and films. But even in low interest categories such as insurance, one in ten have not just listened to, but even acted upon an unsolicited recommendation. So as long as the recommender was trusted as a credible source of information, these recommendations were likely to be effective and could even be passed on to other people, creating the much-sought viral effect.

 

Why we should all respect genuine word of mouth

Back to those people who recommend for cash: they might be lucky with timing (#1 above) but are unlikely to be trusted (#2 and #3). As a result, they deliver the lowest consideration levels amongst people at the receiving end of recommendations. In other words, they are the least effective recommenders, even though they are the most active ones and the ones companies buy and encourage. So while they account for a large number of recommendations, they account for very few recommendations actually acted upon, which entails a different story.

In short, effective word-of-mouth marketing simply cannot be bought. So in order to find authentic recommenders, who may reach fewer people but do so far more effectively, the brand will need to examine their own unique business situation. It’s not just the numbers, it’s the people and the emotions behind them that will drive the real business value.

Technology has brought word of mouth into the mass media arena. Individual recommendations, when genuine, can be a very powerful force for positive change and accelerate commercial success. The important thing to realise about the digital revolution is not that it connects you to your customers; but that it connects your customers to each other and to the world. And the way to collect and receive more recommendations that are effective and acted upon, is to be a brand worth recommending.

 

Are you using influencer marketing? If so, how, and is it working for you? Drop us an email to info@clusters.uk.com if you’d like to discuss this article further.

 

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