Marketers are increasingly relying on word of mouth (WOM) campaigns to gain awareness and buyers. Historically, WOM campaigns that give incentives to referrers have regarded them all as “equal” and compensated them equitably. As social media measurement tools make each customer’s influence easier to gauge, using a variable reward scale that pays customers based on their social currency will become a commonplace practice of marketers.
We all have become savvy at creating buffers and filters to prevent advertising from inundating us through email, TV, smartphones and other means. So, as a way to break through those barriers, many marketers are putting more resources towards WOM campaigns. Anyone who gets a recommendation from someone they know will give it more credibility than claims that advertisers make.
Broadly stated, there are two different ways that WOM gets triggered. The most common, and most authentic, is when customers are so thrilled with a great brand experience that they take the initiative to spread the word about it.
Without a doubt, every business wants to achieve the marketing nirvana portrayed in the 1980s TV ads for Faberge Shampoo. But, most businesses are not the beneficiary of hyper-organic WOM where a customer tells “two friends, and so on, and so on, and so on.”
The second way is in response to an incentive that a business offers to its customers – a discount, money back, a free item – for telling their friends about a brand.
In his book The Tipping Point, Malcolm Gladwell dubbed the people who like to pass along knowledge as “Mavens,” and the sociable personalities who bring people together as “Connectors.” People who possess both of these characteristics are the ones that marketers ideally want to get talking about their products because these folks have a large sphere of influence and higher social currency.
What is “social currency?” According to Wikipedia, it is “the entirety of actual and potential resources which arise from the presence in social networks and communities.” The larger a person’s network, the more influence she is likely to have on the people she is connected to.
Each of us has social currency, both online and offline. With the creation of tools, such as Klout and PeerIndex, that calculate the influence people have in the social media sphere, it’s becoming a lot easier to determine a person’s influence on the Web. Measuring it offline remains a bigger challenge.
Using the scores that these social influence tools assign, marketers can target the people whose recommendations have a greater chance of spreading to larger audiences and reward them for having higher online authority than other customers. Essentially, it’s payday time for people who have a lot of followers on Twitter, friends on Facebook and/or blog subscribers. These avid social media users have the opportunity to get compensated for brand recommendations they promote through their own media channels.
Take the campaign that CapitalOne and Klout recently ran as an example. It offered CapitlaOne credit card holders “up to 10% bonus cash back on all your credit card purchases” based on the number of reward points that they accrued over a seven day period.
Customers were eligible for two types of reward points. The first type was allocated based on each participant’s Klout Score at the time of enrollment. The higher the social currency (aka the Klout Score) a customer had already attained through his or her social media activities, the greater the number of reward points he or she was granted by CapitalOne.
The second type of bonus reward points were awarded after customers’ tweets or Facebook posts directly resulted in their followers and friends signing up for the CapitalOne promotion. As stated in the promotional email, “It’s our way of thanking you for spreading the word.”
There’s no way to know how successful this promotion was. The rules were complicated and I question how many people would eagerly comply with the requirement that to participate they must give their credit card company access to their Facebook and Twitter accounts. No matter, this word of mouth campaign that compensated customers based on their social media influence is a harbinger of more to come.