Study finds word-of-mouth's impact on loyalty

In an unfavourable economic climate, companies must focus more than ever on superior customer experiences that retain customers and create positive word-of-mouth (WoM), according to the findings of a Net Promoter-based study into the B2C wireless market by Satmetrix.
The study examined the financial impact of both positive and negative WoM, and highlighted the impact that customer loyalty and WoM can have on a company's brand and bottom line. sschroeder This article is copyright 2009 TheWiseMarketer.com).
The study was based on the Net Promoter Economic Framework, which determines total customer value based on buyer and referral behaviours of 'promoters' (customers who are likely to recommend the company or its products) and 'detractors' (customers who are unlikely to recommend the company or its products). For the study, 'buyer economics' refers to how much a customer spends over a given period of time, and 'referral economics' refers to the amount of new business that is gained or lost as a result of the customer telling others about their experience.
Applying this framework to the wireless industry, the 'Net Promoter Economics: The Impact of Word of Mouth' study discovered that each promoter was worth approximately US$1,700 and accounted for approximately one-half of a new customer acquired through positive word-of-mouth.
By comparison, each detractor accounted for the loss of 1.3 new customers through negative word-of-mouth. The lost business associated with these negative referrals was found to undo the entire value of the detractor's own purchase behaviour as well as causing the loss of a further US$300 (so a detractor is worth US$2,000 less than a promoter).
"While reported spending did not differ between promoters and detractors, the detractors' negative behaviour represents a significant hidden cost and a net drain on the bottom line," explained Dr Vince Nowinksi, director of methodology for Satmetrix.
"A company's ability to take action to increase promoters and reduce detractors has a significant impact on financial performance," concluded Dr Laura Brooks, vice president of business consulting and methodology for Satmetrix. "Companies with a business strategy focused on the customer experience tend to enjoy stronger brand affinity, improved customer retention, and increased growth."

If you are wondering what you can do to improve the number of promoters in your business visit www.bowlingrewards.com. Currently geared for the bowling industry, it is soon to launch in the resturaunt and other industries. For more information contact Michael Layne at Michael.A.Layne@me.com or (970)443-8930.

What do CUSTOMERS Want?

Consumers across the board have a wide and varied range of responses to terms such as "loyalty scheme", "frequent shopper card", and "customer club". Some see a loyalty programme as an opportunity to get something for nothing - for buying what they were going to buy anyway - while others see a loyalty programme as a devious way for a company to get them to buy things they don't really need or want. In all markets and with all programmes, there will be both enthusiasm and suspicion when a new loyalty programme or customer club makes its first appearance.

Of course the key to gaining consumer acceptance and rapid adoption of a programme (and therefore greater customer and data acquisition) is to understand what the consumer really wants from the company, and then to use the data collected from them to better understand how to fulfil those needs. No loyalty programme should ever force customers to buy things they don't want or need. Instead, the programme should be structured to simply find out what customers really want, when they want it, and how they want it provided.

What consumers really want to be offered...
But the loyalty programme is only one method in the marketer's toolkit, and providing consumers with the kind of interactions they want is also vital to maintaining a healthy, trusting, and long-lived customer relationship. In The Wise Marketer's online poll entitled 'Consumer attitudes to marketing techniques', on a scale of 1 (enthusiastic) to 4 (hate), consumers were found to be enthusiastic about discounts and cash rebates (60.3%), followed by personalised direct mail (24.1%), loyalty programmes (17.2%), coupons and traditional media advertising (6.9%), and online ads and e-mails (3.4%).

However, the balance changed significantly when the positive scores (1s and 2s) were combined, with consumers widely preferring discounting or cash rebates (94.8%), loyalty programmes (84.4%), coupons and traditional media ads (55.2%), Personalised direct mail (55.1%), and online ads and e-mail (31.0%).

What really makes consumers loyal to a brand...
When asked "What do you believe is the biggest driver of true consumer loyalty to specific brands?", marketing executives from around the world reported that the top four drivers of true consumer-brand loyalty are:

1. Satisfaction (51%);
2. Emotion (32%);
3. Usefulness (12%);
4. Pricing (5%).

So, when it comes to building true consumer loyalty to a specific brand, rather than building loyalty to a retailer or supplier, the poll showed that there is very little that can beat good, old-fashioned satisfaction with the product or service. However, emotional bonds with the brand are catching up in terms of overall importance to brand loyalty, while the product or service's usefulness and pricing appear to have very little effect on most consumers' choice of preferred brand. Interestingly, despite giving the poll's respondents the opportunity to vote for 'other' drivers of brand loyalty, no major drivers other than the four shown above were forthcoming.

How consumers want to receive marketing messages...
Interestingly, when The Wise Marketer conducted online polls into consumers' receptiveness to both web site and television advertising techniques, "intrusive web adverts" (e.g. ads that force the user to click on them to move on) were found to cause an 88% defection rate, where users close or navigate away from the web site immediately. This rate drops significantly for "passive adverts" such as banners and 'advertorial' text.

Television advertisers are having a rough time, too. The common television advertising practice of increasing the volume during ad breaks may have originally been intended to keep the adverts audible when viewers left the viewing area temporarily, but for those who remain seated in front of the television the volume of the adverts renders any personal thought or sociable conversation almost impossible. It is interesting to note that 9% always press the mute button during ad breaks, and almost twice as many said they 'usually mute' during ad breaks. This adds up to more than one-quarter of the population that will seldom hear an advert. Add to that another 27% who 'sometimes' mute the ads, bringing the potential lost audience to well over 50%.

This article is based on the research and advice of dozens of loyalty thought leaders found in 'The Loyalty Guide III', which is The Wise Marketer's latest 900+ page global guide to loyalty programmes, techniques, best practices, trends, and theory. The report is available now for £1,150 (approx. Euro 1,595 / US$2,295). See TheLoyaltyGuide.com for the full executive summary, downloadable chapter samples, table of contents, online searching, and ordering details.

The 3 Headed Online Marketing Monster

BoomJ Inc./Beyond Commerce is the parent company of this "Three Headed Online Marketing Monster". Here is the breakdown:

BOOMj.com, the leading online community for Baby Boomers, providing networking, e-commerce, and best of breed content in heath, finance, politics, technology, and lifestyle designed for those born between the years of 1945 and 1965.

The latest division, LocalAdLink.com, is an online search directory for local businesses
nationwide and is the main hub for a sophisticated advertising network of owned, operated, and third party sites (including sites partnered through the company’s e-commerce division). LocalAdLink sells ads to local business, and serves these ads across its entire network using proprietary geo-targeted software to market local ads to viewers within a “living distance” of the viewer’s zip code. Additionally, LocalAdLink pushes ads out to Google, Yahoo, and an additional 100 search engines across the Internet.

And finally, i-Supply. i-Supply.com is the e-commerce solutions division, which provides the ability for participating sites to generate revenues from the sales of over 1.8 million brand name products through customizable online retail storefronts. i-Supply offers a free and easy to use e-commerce widget for websites, making it simple for any site to create a fully functioning retail store to seamlessly fit their web page. BOOMj, Inc. retains complete control of remnant advertising space on i-Supply’s partnered storefronts, providing an extraordinary and powerful reach to Local Ad Link customers, that no other web company has been able to create so far.


Now, I want to expand on what this all means for you as a business owner/advertiser in your local market. Simply put, what we have here is a revolutionary breakthrough in marketing, specifically online. So you might be saying, "Big deal, they advertise on a couple of other websites that they own...what is the big deal??"

Let me tell you. First of all any of these applications (BoomJ.com, LocalAdLink.com, or the i-Supply widget) would be successful standing on their own because they are either in a perfect niche or because they are technologically advanced...people either need them or want them. The thing that makes this so huge is that they are all working in conjunction with one another, so when you purchase your ad on Local Ad Link, you aren't just getting the exposure that LocalAdLink.com is going to generate on it's own. Instead you have the leading social network for the most prolific spenders in the market today exclusively showcasing your LocalAdLink.com geo-targeted ad as they keep up with their friends and the latest news, trends, and lifestyle tips. Needless to say, a great place for your ad to be and good news for you is that they will only be fed ads from the Local Ad Link network.

And it only gets better! Not only does Local Ad Link push your ad out to hundreds of search sites like Google, MSN, Ask, Yahoo, mySpace, LinkedIn, and others but soon you will also see your ad on every site that begins to use the new, free, widget technology of i-Supply. So why is i-Supply such a big deal? Well lets start with why a website owner would want to use such a widget? Well, the obvious is that they can make money. After installing the widget all they have to do is drive traffic to their site (which they are likely already trying to do) and enjoy the ride. i-Supply handles everything else, from product warehousing, product purchases, invoicing, shipping, returns...everything. "OK" you say, "what you have is another affiliate program right?" Wrong. The difference between having i-Supply on your site and having say, Amazon's affiliate program on your site is that we don't redirect the traffic you work so hard to generate to your site. Instead, we only ask that you use our widget, which stays embedded on your site; even as some makes a purchase. Lets say for example that you are a photographer visiting photography.com reading about all the latest techniques on how to capture lightning. While you are there you visit the "shop" section for the latest gear. It just so happens that the "shop" section is one of the i-Supply beta sites. Seamlessly allowing your customers to make a purchase and stay on your site to finish reading the information which compelled them visit in the first place. Meanwhile, you get a percentage of the purchase price without any additional effort, and you never loose any of the traffic you work so hard to drive to your site.

To get more information on how to get started with your Local Ad Link Ad and begin taking advantage of this revolution in marketing visit me at: www.TheLocalMarketer.com

My Reading for the day...A Great resource for SEO practices!

I have been doing some reading about SEO today. I really like this blog:


SEOmoz Blog - http://www.seomoz.org/blog
Without a doubt, the best SEO blog out there. They offer very practical tips, that you can start using right away.

Enjoy!

50 Free Ways to Drive More Traffic to your site

For those of you looking to drive more traffic to your site go to www.thelocalmarketer.com and sign up for the free newsletter,"50 Free Ways to Drive More Traffic to your site". I'm sure you will find it helpful. While you are there, check out our low cost solution to create or improve your web presence by utalizing Local Ad Link!

The Introduction

Hello and welcome to the introduction of The Local Marketer. My hope with this blog is to present relevant information about marketing locally. The beginning stages will likely be all about the company that sparked this interest in my life...Local Ad Link. I am an independent sales rep and as such I am in the process of developing a site that has all of the hot information you need to know if you are looking to create or improve your web presence...to see what I have so far click on "The Local Marketer" link to the right. ------------------>

For now I just want to get this first post up and invite you to begin following me in this journey. Weather you are a marketer or a business owner it is my hope that you will find something useful here in the very near future.