Smart calculator measures potential impact of word of mouth

I was honored when the Useful Ideas team invited me to provide input for a ‘smart calculator’ they wanted to create to help marketers gauge word of mouth activity. Our goal was to get end users to think through the fundamentals of getting a message cascade online and offline vs. claim to have a crystal ball for viral outcomes. The calculator algorithm is based on four elements:

1- Number of customers

2- Percentage of customers who would share a message

3- Average number of recommendations/customer

4- Impact of recommendations (i.e., % of recommendations that turn into purchases)

The site is full of fun, ‘useful’ calculators that help you figure out how addicted you are to Facebook, how you rank in work overtime, your income before and after taxes, etc. Below is the word of mouth impact calculator.

 

http://hesaplabakalim.com/widget/342

 

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Positive Stories Stick

Dr. Martin Oetting and his colleagues at trnd, a Europe-based word of mouth marketing company, have released some interesting research based on a survey of 30,000 panel members. The study revealed that people were most likely to remember positive stories about products and companies, rather than negative. When asked about their latest word-of-mouth experience, an overwhelming majority (89 percent) of survey participants mentioned a positive story, while a mere 7 percent recalled a negative experience. 

The study also found that some categories are more prone to negative word of mouth — such as transportation and telecom (communications) — than others. Yet, word of mouth about most FMCG products was positive. 

These findings echo US studies, such as those from Keller Fay Group , which show that most word of mouth is positive. 

What’s the takeaway? People want to pass along positive stories and feel good? Perhaps people are more likely to focus on what works vs. what does not because they want to experience the better things in life. I wonder how these findings would vary if we were to ask questions about political and social climate vs. products and companies. How would people report on the news they hear from the media, friends and family after being exposed to so many negative reports on the economy and political battles?

 

 

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Women Heavily Rely on WOM When Investing

 

According to the latest Info-Currents report Investment Conversations, based on the Large Purchase Study, there are stark differences in the way men and women make investment choices. Women rely on face-to-face conversations, while men are more likely to act based on their past experiences. Considering the combined effect of online and offline word of mouth, nearly six in 10 (56 percent) of women say they make investment product and service choices based on word of mouth, while only 32 percent of men do so. 

 

Gender-_investment

The study validates financial institutions’ programs geared towards female customers. It also suggests that companies prepared to answer women’s questions and assist with their review process to inform those peer-to-peer conversations will have a competitive advantage. 

 

To download a full copy of the Investment Conversations report, please click here

 

 

 

 

 

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No Matter How You Market It, Travel is About Experience

Who doesn’t remember the 1994 episode of Saturday Night Live where David Spade and Helen Hunt act as the most insensitive airline crew? We laugh at this exaggeration because we can remember at least one less than pleasant travel incident. 

http://www.megavideo.com/v/OEGO9ZF2a96387ca13e006993f7fa775ac2864d4

 

Travel is indeed about experience. Whether shopping for airline tickets, renting cars, going on cruises or choosing hotels, travel purchasers are most likely to refer to their past dealings with brands and establishments.

 

Travel_blog_pic

 

Findings from S. Radoff Associates’ Large Purchase Study shows that discounts may sway travel service purchasers’ decisions. About one-fifth of travel purchasers say their buying decisions are influenced by such offers.

Like discounts, the impact of word of mouth on travel purchases is also dwarfed by the significant role of past experience. Fewer than a quarter of travel purchasers say they were driven by offline or online buzz when making their final choices.

Word of mouth is more likely to influence cruise and hotel choices and less likely to impact airline and car rental service choices. Cruise fans are the only group of travel purchasers who indicate that face-to-face conversations (32 percent) and online word of mouth (23 percent) influence their buying decisions.

Marketing, media and peer-to-peer channels may drive trial and awareness of travel services. Yet brand trust and customer loyalty are closely linked with experience. Customer satisfaction is travel industry’s key variable for growth.

To download the full report on how consumers make their travel purchases and how sources of consumer decisions vary by age, parenthood and ethnicity, please click here

 

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What About Direct Selling?

Ever since I’ve met Mr. Hakki Ozmorali through his blog The World of Direct Selling, I’ve been interested in the similarities between word of mouth marketing and this form of network-based marketing. The Avon ladies, the Tupperware parties — can’t they teach us a thing or two about sampling, experience-driven word of mouth and sales? Hakki has lead teams at Oriflame, Herbalife and LR Health & Beauty Systems as their Country Manager in Turkey, and as North American Regional Manager for the Canadian network marketing company Lifestyles in Toronto, Canada. He currently runs his own firm, DS Consulting. Here are Hakki’s valuable thoughts on the opportunities in direct-selling businesses. 


What do you think is the connection between direct to consumer marketing and word of mouth? Is there an overlap?

Obviously, direct selling relies very much on word of mouth. In its network marketing form, this reliance is even stronger. Companies expect and promote network marketers to conduct their businesses in their close circles. That is, you take the word to your circle of friends and acquaintances and they take it from you to do the same in theirs. As a consequence, people enjoy the luxury of using the products they like, of referring them to the people they like, and make money from this. 

Word of mouth marketers are grappling with measurement issues. It is hard to ask for more projects without proving their worth and ROI. Any learnings you can share from direct selling?

One of the strongest aspects of direct selling is its measurability. One can keep track of all the transactions that take place between the direct sellers and the company. And those transactions expand through word of mouth. One might say here, “Hey, you talk about direct sellers. How about the end consumers?” First of all, it is very rare to see a direct seller not using the products the company he or she is affiliated with. So, a direct seller is in fact, always a consumer as well. Secondly, many direct selling companies have “preferred customer” programs where end consumers can directly buy from the company at discounted prices where you again, can measure everything. So, when a company can find the way to register the user, it can do all measurements one can think of.   

What are the best approaches and practices that work in direct selling? How does consumer experience play into these?

In time, we have learned many lessons. There are some generally accepted rules now. For instance, you need to have a meaningful product line, a solid compensation plan to reward the field, and an operation that satisfies well the needs of direct selllers and consumers. On top these, we have the Internet. A direct selling operation without serving on the Internet now, belongs to yesterday. And today, we are faced with another phenomenon called the “social media”. With that, we have the most powerful tools ever to reach out to younger generations. As a side note, younger generations have traditionally stayed not-so-close to the direct selling model. Oriflame’s “Dare to Be” that I had covered on my blog previously is a very innovative example to such efforts.

 With regards to consumer experience, I can say it is in the heart of direct selling. It is very unusaual that a direct seller who personally did not have a positive experience will go out and promote.

Where do you think the future of direct selling is going, with all the changes in social media landscape? Does powerful consumer mean powerful marketer, in your opinion?

Every single day, the industry is exploring new opportunites that the social media tools provide. If this is all about networking, now a lot of networking is going on the Internet. When you have a meaningful presence there, you can benefit a lot. So, I don’t think the advances on the Internet will challenge the future of direct selling in a negative way. Having said that, another challenge is there because those who utilize these tools better than the others will be winning. It is important to note here that Sequia Capital after investing $37 million in the direct selling company Stella & Dot said it had done so because “the direct selling industry is on the cusp of a new age, with e-commerce and social networking transforming the landscape of the traditional direct-sales approach”.

Coming to your second question,  yes, empowering consumer is actually the essence of network marketing. That is, if you have a powerful consumer, that person will be a powerful marketer for your product as long as you show him or her how to do it and compensate for doing so.

You have an interesting trail of international work. What would be your recommendation to global brands in today’s communication landscape?

While there is so much going on in the direction of globalizaton, local languages, cultures, tastes, attitudes are still there. I’ll give you an example from Facebook. The Turkish people make up the fourth largest audience among Facebook users. This is not because the Turks are one of the most Internet savvy or technologically advanced society in the world. This is simply because Turks love to socialize, to network, and to share. So, when launching a marketing activity, one may choose not to utilize Facebook in a specific country, but apparently, you don’t have that luxury in the Turkish market.  

Thank you very much for your time and insights!

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Brand Love

A few years ago, I was co-presenting with Andy Sernovitz at a word of mouth marketing webinar. I had my slides ready, full of data charts and diagrams showing how to identify online influencers and gauge their impact on brands. Andy preceded my presentation with his section. I never forget one of the slides he put up: It was just a big, shiny, red heart. He said, “Word of mouth is about looooovvve.” The simplicity in what he was showing struck me. My slides would probably make a business decision maker feel comfortable about their investment, but what Andy was saying touched the core of the matter.

Word of mouth is about love. It is about feeling so passionate about a brand or product that you are ready to scream it from the rooftops– or in this case, from the windows of a Union Square store in New York. What a smart and eye-catching way to turn consumer satisfaction into authentic publicity. Happy Valentine’s!

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When Reader Opinion Weighs More Than Author’s

Last Friday, I grabbed a copy of B-to-B online to keep myself busy on the subway. Somewhere between 59th street and Grand Central, I got struck by a sentence in Paul Gillin’s column, titled Sidewiki could spell trouble. As he discusses collaborative technologies that layer user comments over public (e.g., Google news) and personal news (e.g., gmail) Gillin states in a prophetic manner “Marketing messages will be less important than the audience’s validation of those messages.” So well said!

Today, it would behoove any consumer to go online before completing a major purchase and check what others’ experiences have been. My words as a marketer are only as good as the positive comments and enthusiastic recommendations from my customers. Studies point to decline of trust in pushed messages and rise of trust in word of mouth.

I am going to venture that word of mouth and ‘side comments’ will be even more important for purchasing higher-priced items and making critical decisions. When the stakes are high, people will be more open to hear what others have to say. This will also require more systematic ways of sifting through the clutter and identifying those whose opinions matter. 

When the sidewiki bubbles with comments, I’d like to see some sort of rating for commentators — not only based on how many times they have commented, but also based on their experience and expertise. 

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WOMMA Updates Ethics Code

After much deliberation, WOMMA has updated a critical phrase in its ethics code as follows:

“We stand against marketing practices whereby the marketer or its representatives provide goods, services or compensation to the consumer to make recommendations, reviews or endorsements without full, meaningful, and prominent disclosure.”

A final version of the Code can be found here.

WOMMA is also encouraging all of its members and the larger WOMM community to contribute to the ongoing discussion about ethics. If you like, you can join the conversation here.

Invest in Turkey

You may have wondered why there was a bit of a pause on this blog. Especially when written by someone who constantly tells others to keep writing and posting at least once a week. Well, I was on vacation! It was the longest vacation office workers in the glorious nation of United States had seen: 18 consecutive days! (Jealous?) My time was well spent. I visited my family in Turkey and practiced word of mouth chatting with them.

In case you were wondering about Turkey. No, it’s not in the Caribbean. It’s not like the Caribbean. It is spread over Europe and Asia. It has a variety of seasons, depending on the region. Population is more than 70 million. 61 percent is under the age of 34!! It’s a peninsula, surrounded by beautiful coast lines on the Aegean, Mediterranean and the Black Sea.

And here are some notes I grabbed from the Invest in Turkey brochure on the plane:

– Turkey is the world’s 15th largest economy and the 6th largest economy compared to the 27 EU economies
– Between 2003 and 2008, Turkey’s GDP increased 143%, reaching $742 billion
– During the same time, exports increased 179%, reaching $132 billion, foreign trade increased by 186%, exports to neighboring countries rose 278%

Despite its political ups and downs and its fair share of economic crises, Turkey commands a strong position in the international business arena. Turkish people follow and respond to the media. Facebook’s largest following in Europe, as I had written here before, is from Turkey. Participating in online chats, spending hours per day playing games are not uncommon experiences for the Turkish youth. The social media and WOM space there is bubbling with very creative, targeted campaigns.

I’d say, look for more waves coming from Turkey.

In An Ideal World…Sustainable WOM

A couple weeks ago at the WOMMA conference, I sat in at a very interesting discussion on building sustainable word of mouth campaigns led by Brains on Fire’s Geno Church and Intuit’s word of mouth marketing manager Michelle Makowsky. The model Geno put on the board made sense: We were to research, uncover consumer sentiment, create the message and the environment for WOM to grow, deliver, engage and keep up the momentum. He was describing a circular motion, which suggested I could and should go back to the drawing board as a marketer during the course of a relationship with a customer. “Good,” I thought, “if I can tap into a large enough budget, we can do this. Maybe merge PR and marketing?”

Yet, the a-ha comment came from Michelle. She noted that this long-term approach may not resonate well with those responsible for marketing. “This would generate buzz, no?” “That’s exactly the point,” she replied, saying that most of us in the marketing world need to show results, to prove a campaign’s worth, to show success, to move on to the next project or level. So, most players will focus their energy on any approach that will create a spike on the charts, now.

Indeed, a sustainable, relationship approach is too long of an ordeal, doesn’t fit into a box and needs constant dialogue and activities with customers. It is CRM, in its truest sense, with creative ideas sprinkled over it to keep conversations going. If it’s not forced, all the better.

Imagine you’re trying to drive interest around a video contest. You reach out to the media, buy some ads, send a newsletter to your opt-in list, give a desirable incentive or gift to the winner, make it easy to find and click. This is similar to preparing for a great, big party where your friends invite their friends and those friends invite their friends and so on. But how will you keep in touch with them after the party is finished? Will they remember you?

To build sustainable WOM programs, we need to start thinking about the post-buzz plans. In this example, the video contest can be the start of a conversation or a fun way to keep in touch with the fans. Next generation of WOM campaigns need to incorporate longer-term community building efforts.