According to research published on Invesp, word-of-mouth referrals account for 13 percent of consumer sales each year (about $6 trillion). Word-of-mouth impressions create 500 percent more sales than paid media impressions because nearly 90 percent of consumers report that they are more likely to give their hard-earned cash to a brand recommended by a friend.
As a group with considerable purchasing power today -- and surely more tomorrow -- college students make some of the best word-of-mouth marketers, but they are picky about which products and services they endorse. To get more students spreading the gospel, brands must tailor their word-of-mouth strategies to the tastes of the younger generation.
Millennials and Gen Z Ascendant
Since World War II, Baby Boomers have enjoyed the distinction of being America's most populous generation. That has changed. In 2015, Millennials overtook Boomers as the country's largest generation by population. Taking into account immigration and mortality rates, the Millennial population in America should peak around 81.1 million people in 2036. Meanwhile, the college-aged Generation Z is swiftly overtaking Millennials, reaching 26 percent of the total population.
Millennials and their Generation Z successors don't shop the way their parents and grandparents did. They trust their smartphones more than older generations, with 15 percent of Millennial smartphone users making multiple mobile purchases per week. Another 15 percent make at least one mobile purchase per week. This shift toward mobile devices means brands must build their presence on social platforms like Instagram to stay connected with the members of these generations no matter where they go.
Unfortunately, reliable tools to turn word-of-mouth strategies from instinctual marketing into measurable campaigns do not yet exist. "As the advertising space continues to adapt to consumers' media consumption habits, brands are increasingly experimenting with new channels for customer acquisition and retention," says Jordan Fudge, partner at Sinai Ventures. "Influencer marketing has the potential to attract a considerable share of the average ad budget. However, there is no real programmatic technology or network to implement these changes."
Despite the lack of reliable measurement techniques, brands continue to pour resources into attracting the attention of young buyers. College campuses are filled with brand ambassadors who give away free products, such as T-shirts and headphones. The more students wear and use these products, the more accustomed they become to the branding of the sponsor -- and the more likely they are to discuss the brand with their friends and family.
Building Better Advocates
Some brands successfully inspire the younger generation to spread the gospel, while others struggle to get a word in edgewise. Companies trying to crack the code of student word-of-mouth marketing should follow the examples of these five successful companies.
From toiletries to TV shows, no one inspires public interest like college students. When SYFY wanted to promote its new show, "The Magicians," Heartbeat tapped its network of brand ambassadors to post specific hashtags and creative assets from the first two seasons. The results went above and beyond expectations, with an engagement rate of 6.32 percent and an audience reach of nearly a million potential viewers.
"Our team highlights successes by featuring winners of any competitions we sponsor or any noteworthy posts by our ambassadors," said Brian Freeman, CEO and founder of Heartbeat. "Such highlights are even automated into every campaign. People crave recognition, and we reward people by putting them on stage. Additionally, we send automated emails during campaigns that show which ambassadors are receiving the most engagement and driving the most clicks. A little healthy competition goes a long way!"
2. Red Bull
Famous for its high-energy advertising, Red Bull is popular with the younger crowd. The energy drink brand uses brand ambassadors to great effect, with active representatives at college campuses across the country. Ambassadors give away Red Bull products, along with such swag as T-shirts and hats, to keep the Red Bull brand visible everywhere young people go.
Red Bull keeps its focus on students to maximize the effect of peer recommendations. When large groups of students want to keep the party going -- or buckle down on their studies -- the word of mouth inspired by this ambassador program helps to ensure they reach for Red Bull first.
3. Insomnia Cookies
Campus reps of Insomnia Cookies go around distributing free cookies to students in exchange for likes on social media. If there is a better way to get the attention of college students than free food, no one has discovered it yet.
Young people love to enter contests and receive social feedback online, but cookies provide an immediate, tangible incentive to advocate for the brand. Thanks to its focus on college campuses, Insomnia Cookies has spread to college towns and cities around the U.S., with more than 100 stores and counting.
4. PINK by Victoria's Secret
As a sub-brand of Victoria's Secret aimed at young people, PINK relies on the social media posts of its younger ambassadors to keep brand awareness high. These ambassadors have direct relationships with marketing professionals from the brand, engaging in regular meetings and surveys to ensure their voices are heard.
This back-and-forth creates a sense of community among PINK representatives and builds stronger loyalty with the brand. Thanks to their active presence online, college students trust brand ambassadors of PINK on all matters related to what's new and trending on Victoria's Secret products.
Nike takes advantage of its status as a global empire to use athlete endorsements to keep Millennials and Gen Zers talking about the brand.
The company doesn't rely solely on celebrities like LeBron James to keep young people engaged, however. Nike also runs a successful student ambassador program, focusing on active young people who live and breathe the Nike brand values of fitness, passion, and team achievement. These ambassadors embody the Nike spirit to friends and family, ensuring their social circles think of Nike first when making an athletic purchase.
Word-of-mouth marketing starts with a small seed. With a little care and time, that seed sprouts into a highly effective ambassador program, driving consumers to talk about the brand and provide trusted recommendations to their peers. Follow the examples of these five companies to develop a successful word-of-mouth strategy for your brand.