COLLOQUY Study Reveals Reward Program Members 70% More Likely to be Word-of-Mouth Champions than Non-Members

CINCINNATI--(BUSINESS WIRE)--Consumers who are loyalty reward program members are far more likely to be Word-of-Mouth (WOM) champions for their favorite brands than non-members, and the more active their program participation, the more likely they are to exhibit WOM behavior, according to a study released today by COLLOQUY.

The COLLOQUY study is titled “The New Champion Customers: Measuring Word-of-Mouth Activity Among Reward Program Members” written by COLLOQUY Editorial Director Rick Ferguson and COLLOQUY Partner Kelly Hlavinka. It is available as a free download at www.colloquy.com/whitepaper and will be presented as a free webinar on March 5, 2009 at 1:00 PM EST. Register at www.colloquy.com/wom-webinar.

The COLLOQUY analysis offers significant evidence of a direct and important correlation between reward program activity and consumers’ positive WOM endorsement activity. Here are some of the key findings:

• Reward program members are 70% more likely to be WOM champions (defined as customers who are “actively recommending” a product, service or brand) than the general population;
• 55% of reward program members are self-described WOM champions;
• Only 32% of non-reward program members are self-described WOM champions;
• 68% of WOM champions in reward programs will recommend a program sponsor’s brand within a year;
• Actively participating reward program members are over three times more likely to be WOM champions;
• Reward program members who have redeemed for experiential rewards are 30% more likely to be WOM champions than those who have redeemed for discounts.

Top Five Reasons Consumers Talk, Blog, Email & Post Info on Their Favorite Brands

The COLLOQUY research also examined the motivations of WOM champions—asking why they engaged in WOM activity regarding their favorite products and brands and what categories of offers and information they were most likely to pass along to others within their networks. The top five motivations of WOM champions were:

-- To tell manufacturers what I think..........	73%
-- To get smart about products/services........	68%
-- To be the first to discover new items.......	68%
-- To get free product samples.................	63%
-- To share my opinion with others.............	61%

“These statistics reinforce the importance of social capital to WOM champions,” Hlavinka said. “Indeed, the self-reported motivations of these consumers reflect its importance—‘to be first’ and ‘to share my opinion’ were both top five motivations. What surprised us were the top two motivations for WOM Champions— ‘to tell manufacturers what I think,’ and ‘to get smart about products and services.’”

Hlavinka added that these findings suggest “WOM champions crave a deeper relationship with their favorite brands and are searching for ways to provide feedback. Four of these top five responses also reflect the importance of confirming self-worth—that is, a champion feels important when she tells a company what they could do better, when she can share information with her peer group, be ‘in the know’ and share her opinions. And, of course, 63 percent of champions admit that they engage in WOM activities to earn free stuff.”

The COLLOQUY research shows that a company’s loyalty marketing database is an under-utilized social network that marketers would do well to exploit in the pursuit of positive, profitable WOM activity.

“If your goal is to cultivate and encourage ongoing, profitable customer WOM activity, all of the tools exist within the loyalty marketing database. Loyalty marketers should find the champions buried within their program memberships, and build relationships that reward them for positive WOM activity,” said COLLOQUY’s Ferguson.

COLLOQUY is a provider of loyalty marketing publishing, education and research. In October 2008, COLLOQUY conducted a consumer research survey designed to explore the intersection of consumers who participate in reward programs and their WOM activity regarding brands, reward programs and specific product categories. This survey of 3,610 U.S. and 3,583 Canadian consumers was subdivided into specific demographic segments and by specific WOM behaviors.

About COLLOQUY

COLLOQUY comprises a collection of publishing, education and research resources devoted to the global loyalty-marketing industry. COLLOQUY® has served the loyalty-marketing industry since 1990 with over 30,000 global subscribers to its magazine and www.colloquy.com is the most comprehensive loyalty web site in the world. COLLOQUY’s research division develops consumer and B-to-B research studies and white papers including industry-specific reports, sizing studies and insights into the drivers of consumer behavior. COLLOQUY also provides educational services through workshops, webinars and speeches at events throughout the world and is the official loyalty-marketing partner of both the Direct Marketing Association and the Canadian Marketing Association. COLLOQUY also operates The COLLOQUY Network, a global consortium of practitioners certified in COLLOQUY’s proprietary methodology. COLLOQUY magazine subscriptions are available at no cost to qualified persons at www.colloquy.com or by calling 513-248-9184.