The Value of the Inspirational Consumer
One way to ascertain if a brand is a Lovemark is to look at those who are largely responsible for awarding the brand with that status – consumers. Lovemarks have relationships with people that are based on more than transactions; they have what we call Inspirational Consumers – people who act as advocates, community members and brand owners.
In The Lovemarks Effect: Winning in the Consumer Revolution, Richard Hytner, Deputy Chairman of Saatchi & Saatchi, identifies the characteristics of Inspirational Consumers:
- Inspirational Consumers are articulate. They say what they feel and describe their Lovemarks through stories. You’ll find many of these declarations on Lovemarks.com.
- Inspirational Consumers are not content to keep Lovemarks all to themselves. They want others to experience the great relationship that their Lovemarks offer. They do this through recommendations, critiques, reviews, photos, videos and often just by sharing their opinions with friends and family.
- Inspirational Consumers get deeply immersed. They cannot resist getting involved with their Lovemark. Participation with a brand is a chance for them to have their say.
- Inspirational Consumers promote, rally around (and rage about) their brands. The relationship that they have with their Lovemarks is active, both in good times and bad.
An example of a Lovemark with Inspirational Consumers is Starbucks.
A recent survey by Amplicate, an online opinion collating resource, ranked the most discussed coffee chains in the US by calculating the number of positive and negative opinions posted on each brand. Starbucks scored on top with over 20,000 opinions about the brand expressed on Twitter, Facebook and Amplicate within the period of 3 months. The coffee company dominates over 90 percent of discussion on US coffee chains and has an online positive approval rating of about 80 percent.
The value of such activity can be looked at from the perspective of a study by Wharton Business School and Goethe-University. The results published in the American Marketing Association’s Journal of Marketing revealed that word-of-mouth (WOM) was effective in obtaining customers that were more valuable and loyal. Referred customers showed stronger brand connection and also had higher retention rates. Specifically:
- Referred customers have higher margins than other customers
- Referred customers were 18% more likely to stay with the company than non-referred customers
- Referred customers have a higher customer lifetime value (CLV), the net present value of all the profits a customer generates over his or her entire association with the firm.
Taking all this information into consideration, let’s look at the following chart released in a whitepaper by ComScore on how brands need connect with people beyond their Facebook fan base. An article in Fast Company on the findings of this whitepaper stated that brands needed “to engage the most hardcore users with interactions that will ripple throughout their network’s newsfeed” to create higher levels of engagement. If we translate Starbucks’ 23 million ‘fans’ into ‘hardcore users’ (or Inspirational Consumers), imagine the value that could be gained by Starbucks on word-of-mouth marketing if they focused on activating their fiercely loyal advocates.