Very interrelated to WOM is customer loyalty.  Although the need to provide an after-sales experience that inspires loyalty and therefore repeat purchases isn’t new, not all loyalty is equal in today’s increasingly competitive, complex world. There are 2 types of loyalty:  Active loyalists, who not only stick with it but also recommend it; Passive loyalists, who choose to stick to the brand either because of complacency or confusion caused by too many choices,  and stay with a brand without being committed to it.  Despite their claims of loyalty, passive consumers are open to messages from competitors who give them a reason to switch.    

Some key concepts related to WOM

3 Main Classifications:

Experiential

WOM is the most common and powerful form, typically accounting for 50% to 80% of word-of-mouth activity in any given product category. It results from a consumer’s direct experience with a product or service, largely when that experience deviates from what’s expected. (Consumers rarely complain about or praise a company when they receive what they expect.) Complaints when airlines lose luggage are a classic example of experiential WOM, which adversely affects brand sentiment and, ultimately, equity, reducing both receptiveness to traditional marketing and the effect of positive WOM from other sources. Positive WOM, on the other hand, can generate a tailwind for a product or service.

Consequential

Marketing activities also can trigger WOM. The most common is what we call consequential WOM, which occurs when consumers directly exposed to traditional marketing campaigns pass on messages about them or brands they publicize. The impact of those messages on consumers is often stronger than the direct effect of advertisements, because marketing campaigns that trigger positive WOM have comparatively higher campaign reach and influence. Marketers need to consider both the direct and the pass-on effects of WOM when determining the message and media mix that maximizes the return on their investments.

Intentional

A less common form of WOM is intentional—for example, when marketers use celebrity endorsements to trigger positive buzz for product launches. Few companies invest in generating intentional WOM, partly because its effects are difficult to measure and because many marketers are unsure if they can successfully execute intentional WOM campaigns.

Measuring Word-of-Mouth Equity

A starting point has been to count the number of recommendations and dissuasions for a given product. There’s an appealing power and simplicity to this approach, but also a challenge: it’s difficult for marketers to account for variability in the power of different kinds of WOM messages. After all, a consumer is significantly more likely to buy a product as a result of a recommendation made by a family member than by a stranger. These two kinds of recommendations constitute a single message, yet the difference in their impact on the receiver’s behavior is immense. In fact, our research shows that a high-impact recommendation, from a trusted friend conveying a relevant message, for example, is up to 50X more likely to trigger a purchase than is a low-impact recommendation.

Loyalty Platforms and Social Loyalty Platforms

The growth of online social media networks such as Facebook, Twitter, LinkedIn, Pinterest, Instagram, Youtube has made online word of mouth a channel for businesses to acquire customers.  Offering your customers membership to loyalty rewards club can incentivize your customers to spread positive reviews and experiences about your product.    For the first time ever, merchants can have their loyal customers share their activity on Facebook to bring in new customers. The cloud based loyalty platform saves merchants IT costs versus existing desktop server solutions.  Sign up today to learn how Social Loyalty can save you 88% on new customer acquisition cost. Visit SocialLoyaltyApps.com to learn more.

According to eMarketer, the  new report, “Social Loyalty: From Rewards to a Rewarding Customer Experience,” analyzes findings from dozens of third-party research providers and interviews with industry executives.  Here are some of the best practices for improving social  loyalty.

Why? Because many traditional loyalty programs are not highly effective, eMarketer notes. While loyalty programs have been popular in the US for years—with the average American consumer belonging to 18 loyalty programs according to loyalty marketing publisher COLLOQUY—it is not clear how many of these consumers are actually active.

eMarketer further notes that points, coupons and freebies are great for grabbing initial attention.  But in the long run these promotions can’t make up for a lackluster customer experience. However, through the use of social media, retailers and brands can identify and interact with the most profitable internet users.  And for the first time ever, social networks such as Facebook makes it easier for businesses to acquire new customers through social loyalty programs.  Why?  Loyalty can be won through encouraging word-of-mouth and creating advocates or evangelists, by raising a user’s social status, by surprising and entertaining shoppers in unexpected ways and also by listening to customers’ needs and suggestions and responding in a mutually beneficial fashion.  Brands that most often succeed typically encourage sharing, raise customers’ social status, develop highly entertaining loyalty programs, and listen and respond to feedback quickly.  Social loyalty programs provide brands with an unprecedented amount of customer data, both online and offline.

Get the basics down.

Be succinct. Posts between 100 and 250 characters (less than 3 lines of text) see about 60% more likes, comments and shares than posts greater than 250 characters.

Post regularly. Post at least five times a week to stay top of mind for fans. Consistency is also key. For example, post new product announcements on the same day every week so fans know what to expect and can look forward to hearing from you.

Post at the optimal time. Only you know what’s right for your business, and you can use your Page Insights to figure out what’s working (for instance, try posting at different times of day and see when you get the most engagement).   For example, FB reports show that restaurants post from 7am-12pm when people are making plans for the day, while retailers post in the 8am-2pm window. User engagement with Facebook Pages is highest from 9-10pm and the 18-24 demographic is the most engaged during this time.*

Be specific and relevant.

Know your specific audience. When posting to your page, your message will reach fans who are likely to be familiar with your brand, so insider content can make them feel in the know.  To reach new audiences, you should create an ad from your page post and keep the content more general while still using your brand voice.

Be seasonable and timely. Fans are more likely to engage with topics that are already top of mind, such as current events, holidays or news. For example, posts mentioning Independence Day on July 4th generated about 90% more engagement than all posts published on that day.

* All engagement data and statistics are based on internal Facebook studies and represent average results.

Be relevant.  For example, local businesses can reference community events, while national businesses can link to articles that their community will care about.

Make a visual impact.

Post photos and videos. Posts including a photo album, a picture or a video generate about 180%, 120%, and 100% more engagement than the average post, respectively.*

Use bold visuals. Grab your audience’s attention by using simple images with a clear focal point. Images with highly saturated colors also help the creative stand out against the site’s white background.   An internal study showed that top performing ads (those with >.3% engagement in the form of likes, comments and shares) feature close-up images and a single color that stands out.*

Feature images that capture your brand. Ideally your profile image will be your logo or other brand  symbol, but people should also recognize your brand in the images you feature. An internal study showed that when a brand was immediately identifiable in an ad, it performed better in terms of recall and purchase consideration.

Craft compelling content.

Speak from your specific brand voice. Include key words that are unique to your brand identity. If your brand has a fictional spokesperson, use their voice. If not, imagine how your brand would sound if   it was a person.

Position your brand as a hero or problem solver. Highlight a specific product feature, such as anngredient or the convenience factor, and the impact it made. Reinforce this in the image if possible.  An internal study showed that this was a characteristic of top performing ads.

Give fans exclusive access to content, products, events, and offers. Fans are 2x more valuable than non-fans, so you should reward them for their loyalty.* Take fans behind the scenes of events and product launches to make them feel special. Announce new products to fans on Facebook before anywhere else, give fans early access to sales, or post exclusive photos from events.

Deliver value to fans. Post limited-time offers or coupon codes, or use your Page to promote a sweepstakes or giveaway.  Social loyalty rewards programs would make an excellent strategy.

The Fewer, The Better – Liking with Limited Quantity

Scarcity is a powerful tool. Offering a product with limited time period or quantity can be very enticing.  This is what drives impulse buys in social commerce. If your customers know they can’t get it anywhere else and there’s only a few left, they are much more likely to buy. Scarcity will attract new Likes (and customer acquisition) by word of mouth.

Quality Over Quantity

Popularity may be awesome but can be a tricky thing.  A brand with 20,000 fans on Facebook is popular compared to one with 100 fans, but pales in comparison to the brand with 20 million fans. The real lesson is what you do with your fans and less about how many you have.   So engage with your fan base and continue to offer a unique and awesome experience. In turn, your community will grow. The bottomline is that authenticity, consistency, and great content that generates a reaction are big drivers in developing a community. Posts with photos and powerful videos encourage sharing, and therefore expand a brand’s reach. An authentic brand voice will build trust, leading the casual brand fan to have a deeper sense of personal connection and ownership.  This makes them pay more attention to your updates that appear in their news feeds.

Go Directly to Your Customers – Remove the Middle Man

So you have a community of fans.  They are there for a reason – they like your products,  your customer service, your stores, your marketing, etc. You are the authority on your brand and your fans want to directly deal with and buy from you.  So take out the middle man and go directly to your fans. That way, you’re in control of the experience. Fans appreciate that direct experience much more than just buying your products at a big retailer. This is a big factor in the conversion funnel. People buy from the direct source because the sense of trust is very high. They know that the direct source cares more for the customers more than anyone else.  Thus, a great social experience that ends with a sale builds affinity and is an opportunity for brands to build repeat business.  The keyword here is “experience”.  The experience flows all the way from the initial introduction to the offer through the message a person receives after the transaction.  The experience ensures repeat customers.

Friends get Rewards

Reward your fans for being loyal to your brand and you can easily turn them into your evangelists or advocates of your brand or products.  This is the beauty of the social loyalty program.  You don’t only retain your existing customers. (Remember, new customer acquisition costs 8 times more than retaining your existing customers.)  In essence, your evangelists give free testimonials and help you acquire new customers.  You get free advertising.  And for the first time ever, Facebook makes it so much easier to do word-of-mouth marketing and use existing fans to acquire new customers. Find what reward system works for your brand and make it a part of your overall strategy.  It does not only drive down your costs, but it is a very effective marketing tool.

Be Consistent

The key to success in any endeavor is consistency – Show Up!  When it comes to Facebook Commerce, you need to just stay on top of it. Your fan base is built over time.  This can be accomplished in the form of polls, photo caption contests, giveaways, quotes, choosing a fan of the day, anything that engages your fans or get them involved.  Facebook Commerce is about building a community. When used well, the Facebook conversion funnel is a loop. By being smart with the offer and providing a great experience along the way, you can build your audience’s expectation and make them shop through your Facebook page.  So what else are you waiting for?  It is right at your fingertips!