Supercharge Your Word-of-Mouth Marketing

Consumers have always talked about products they like. Marketers must empower consumer evangelists by implementing programs that facilitate spreading the word. The Word of Mouth Marketing Association‘s (WOMMA’s) recent Word of Mouth Marketing vs. Advertising Conference underscored the fact consumers trust other consumers more than they do marketers for product information. In today’s oversaturated, fragmented media landscape, word-of-mouth marketing remains a cost-effective part of many advertisers’ marketing mix.

Want to supercharge a word-of-mouth marketing program? Try an online sweepstakes or contest with an incentive that entices players to play again and to invite friends to play.

In addition to driving sales, a sweepstakes or contest can grow your email list. Including an e-newsletter signup as an opt in on the registration form can yield a 30-75 percent response, depending on industry vertical and target market, says Josh Glantz, ePrize VP and managing director.

To take its word-of-mouth marketing for acquisition, retention, and reactivation to the next level, Bluefly successfully employs an ongoing sweepstakes strategy. To date, its “30 Bags in 30 Days” sweepstakes has generated close to 2 million visits. Over 40 percent of players have referred friends, and about 50 percent have signed up for daily reminders to play again.

The secret of Bluefly’s success is offering a cool product shoppers want and that’s in line with its brand for creating buzz. Participants are encouraged to refer friends and return regularly to play.

“Changing from one grand prize to an instant prize where players have a chance to win every day has been a huge factor in our success,” says Gerri Gussin, Bluefly marketing director. To make everyone feel like a winner, Bluefly offers non-winners shopping-oriented promotions such as free shipping and 10 percent off purchases.

Augment Word of Mouth for Your Promotions

Sweepstakes and contests are proven methods of generating word of mouth. To maximize results:

• Choose a prize that hits the target’s sweet spot. Uniqueness, desirability, and relationship to your brand improve response and buzz-worthiness. Don’t pick a product just because it’s left over from last season.
• Tailor special marketing program for your most productive referrers. These viral marketing representatives bring in more participants who engage with your promotion than other players. That justifies the additional work and cost.
• Market your promotion to increase message reach. Include your Web site, blogs, invoices, packages, in-store collateral, all customer messaging, telemarketing support, and employee communications, as well as paid media. If you’ve developed content around your sweepstakes or contest, consider pushing information out using an RSS (define) feed. Alternatively, solicit stories or comments from participants to further your promotion or to use as content in a follow-up promotional email. Add a customer comment button or another participation layer to the sweepstakes.

A word of caution: Though traditional offline direct marketers have used get-a-friend programs for years, spam growth has motivated the FTC to get more involved and explicitly regulate online sweepstakes programs. Under the proposed rules, marketers can’t offer payment or other consideration as incentives to users to send promotional email to their friends.

The best way for companies to proactively comply is by confirming a referred recipient isn’t on their Do-Not-E-mail list. If you have a CAN-SPAM compliant database, you can match referred participants’ names and email addresses against the list. If a recipient’s email address appears on your list, you can’t send the promotion to that address.

Analyzing Promotional Results

To measure the success of your program:

• Measure new registrants, referrals, email registrants, and purchasers. Follow up with players soon after registration to engage them with your product while it’s still fresh in their minds.
• Analyze referrer productivity. This indicates your best referrers or marketing envoys are.

  Referrer productivity = number of referrals who participate

  Also check your referrer efficiency, the percentage of referrals that eventually participant. This is important to ensure participants aren’t gaming the system by using multiple or fake email addresses or creating negative word of mouth by sending colleagues email they don’t want.

  Referrer efficiency = number of referrals who participate/number of referrals

• Assess promotional profitability. Track gross margin (sales minus cost of goods sold) less costs related to the promotion. If you’ve partnered with another firm, as Bluefly did with “Lucky” magazine for it’s current promotion, include that impact on profitability. Also track the number of purchases per customer and order size.
• Monitor buzz factor. Use your PR or SEM (define) firm, or services such as Google News Alerts, Technorati, Bloglines, and PubSub.
• Track branding metrics before and after the promotion. This determines the campaign’s incremental branding impact. Though sweepstakes and contests are primarily promotional, they also augment branding measures.

Word-of-mouth marketing is a long-term strategy for developing ongoing relationships with customers. An online sweepstakes or a contest with an incentive enables you to connect with your target market online and gather information about them in a win-win way. You can economically reach excellent prospects with whom you may not have had previous contact or a way to communicate directly.