Global PR Blog Week 2.0

Why WOM is back on marketers’ agenda and how to make it work for their brands.

By Joel Cere, Netcoms – Hill & Knowlton | Beyond PR
EDITORS’ CHOICE | Customer Generated Marketing

A 2004 Intelliseek study “Consumer Generated Media (CGM) 101, Word-of-Mouth in the age of the web-fortified consumer�, Pete Blackshaw and Mike Nazzaro, Intelliseek, Spring 2004 (PDF) found that consumer–to-consumer recommendations—even online consumer postings to forums—carry a higher trust factor than virtually all other forms of advertising, including TV, radio and print. That did not come as a surprise to many long established businesses. In fact, one of them always understood the value of consumer recommendations; its entire sales strategy relies on turning customers into brand ambassadors and capitalising on their social networks to influence others to purchase. That company is Tupperware and it made a fortune by understanding word-of-mouth’s power 50 years ago. Since then, WOM has been reengineered as “Consumer Generated Marketing� and thanks to blogging, its persuasion power is making business media headlines again through a series of high profile customer relations disasters. Let’s review what the forces driving consumers’ propensity to whine back on marketers’ agenda are and how marketers could reclaim WOM to engage into productive conversations with consumers.

CGM is born out of consumer empowerment, frustration and a long memory.

First, consumers talk to each other more because they can. Self-publishing tools and enhanced/user-friendly communication technologies have made consumer generated content increasingly popular. Jonathan Miller “Ready for the 5th estate?�, James Cherkoff, 5th of October 2004. , from AOL US reckons that 60 to 70 per cent of the time people spend on AOL is devoted to ‘audience generated content’. The blogosphere is intricately linked to a network of newsgroups, discussion forums and consumer rating sites such as Epinions. Millions are exchanging comments and complaints about products and services on a global scale. Search engines act as a gateway to access this nebula of brand conversations and expose information hungry shoppers to mixed brand messages and customer service ordeals. This is a far cry from the unilateral positiveness of traditional communication, but makes for good conversation starters, especially if you are looking to buy one of the products decried yourself.

Second, the trust bond between businesses and consumers is fading and consumer-to-consumer relations have become a viable alternative. There is a growing disconnect between marketing hype and customer experience, and the conversations made possible by technology makes it more apparent. Consumers try to engage with corporations on this issue but the latter have been deafened by decades of shouting advertising slogans in guise of dialogue. As a result, consumers rely on each other more for product education and information. In fact, word-of-mouth is valued 1.5 times more by consumers “The state of WOM 2005: The consumer perspective�, presented at the WOMMA summit by Ed Keller, NOP World Consumer, 29th of March 2005. (PDF) today than it was in the 1970s. This is further compounded by a survey DoubleClick “Touchpoints� survey - July 2005. that examined the sequence of how consumers learn about products and what influence their purchasing decision. Word-of-mouth came out as the most mentioned determining factor across 9 out of 10 product categories.

Third, the Internet has a long memory (“the e-lephant never forgetsâ€?). 81% of consumers aged 30 to 64 years old use the web to research products or services The Pew Internet & American Life survey, “The mainstreaming of online lifeâ€?, 2005.. That creates a lot of conversations. What makes the Internet so unique compared to other media is that it leaves a “digital trail” of word-of-mouth behaviour. Consumers’ voices of discontent are on the wall, for all to see. This makes it harder to conceal past or current contentious customer issues and erodes companies’ reputations. On the plus side, this traceability solves the issue of measuring the impact of WOM, beyond anecdotal evidence. Several companies such as BlogPulse or Buzzmetrics are working hard to track and model conversation trails and these efforts resonate with ROI focussed marketers. P&G “Making wawesâ€?, CMO, Samar Farah, July 2005. even claimed to have cracked the code of WOM’s effectiveness.

Taking these three factors into consideration, it is obvious that a fundamental change in our relationship with brands and the way we are marketed to is under way. As the authors of the Clue Train manifesto “The Cluetrain Manifesto: The End of Business As Usual�, Rick Levine, Doc Searls, Christopher Locke, Perseus Books, 2000. put it: “People in networked markets have figured out that they get far better information and support from one another than from vendors. (…) There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.�

This new balance of power, where consumers own marketing is aptly named “Consumer Generated Marketing�. A term derived from Pete Blackshaw’s “Consumer Generated Media�. It spurns from consumers desire to tap into collective experience to balance perceived biased information received from entities with vested interest in their purchase. Consumers now have the tools and the will to promote companies who fulfil their promises, and to destroy those who break them. This has an impact on both consumers and companies’ behaviours and set high expectations for their relationships.

The automotive industry is a good example of a category rocked by CGM. Nowadays, very few consumers would purchase a car without first checking online opinions or comments by other car owners. Nearly 150 million searches are conducted every year on the term “new car” alone “Quantifying word of mouthâ€?, Pete Blackshaw, 19th of October 2004.. Honda Hybrid’s line of cars came under scrutiny Hybrid Mileage Comes Up Shortâ€?, John Gartner, Wired, 11th of May 2004. by sceptical owners who gathered in online forums to discuss actual mileage calculations when advertising claim of fifty to sixty miles per gallon didn’t match their experience. Prospective Honda buyers are using these sites to connect with current owners for feedback. To assess damages to Honda’s reputation, it is worth noting that 74% of car buyers “What influences new car buyers?â€?, Forrester Research, June 2003. named “consumer reportsâ€? as most influential in their purchase decision.

Several high profiles marketing or PR setbacks, such as the recent Dell or Land Rover cases also involved consumers upset by the performance of a product and the companies’ response (or lack of) to their grief. These consumer originated campaigns led to product replacement or compensation and widespread public vindication. More importantly, it forced the affected companies, and those who watched the saga unfolding to pay more attention to how they fulfil their promise to their existing clients instead of focussing solely on acquiring new ones. Fred Reichheld The one number you need to growâ€?, Fred Reicheld, Harvard Business Review, December 2003., founder of Bain & Company’s Loyalty Practice goes as far as arguing that a customer’s propensity to recommend a brand is the most important measurement in business today, before “customer satisfactionâ€?. Marketers are taking notice.

Companies do not always need to be at the receiving end of a consumer generated mayhem campaign. Provided that their willingness to listen transpires throughout the entire organisation, marketers can leverage consumers’ goodwill and networks to their advantage.

7 steps to turn a “no logo� into a �yes logo� conversation

Trying to forcefully implant marketing messages onto conversations is disruptive and does not work “Permission Marketing�, Seth Godin, Simon & Schuster, May 1999.. Forget about sending your standard press release to bloggers. On the other end of the spectrum, not every “print your own T-shirt� competition can be hailed as a “Consumer Generated Marketing� breakthrough. The key issue for corporations interested in tapping into consumer-to-consumer communication is how much control they are prepared to let go and how much they trust consumers to promote their brands. It is not easy and a decision understandably not left to marketers alone. Here are 7 tips to ease the pain, by order of brand control and consumer involvement:

1. Reclaim the call centre

Monitoring the blogosphere, newsgroups and consumer rating sites for consumer feedback is a prerequisite. But I would argue that marketers are missing another trick: to reclaim call centres. There is a vast amount of customer interaction there, but too little information is fed back to the organisation. Gathering better knowledge on consumer issues and training/empowering staff to deal with them would certainly help deliver a better consumer experience. Most disaster stories include an element of customer representative failure, be it on the phone or online. This is often the first channel a dissatisfied consumer will turn to, before venting his/her anger online.

2. Fix what is broken

Jim Heskett “Where is consumer generated marketing taking us?�, Jim Heskett, 2nd of May 2005., Professor at Harvard Business School wonders if companies take the risk to pay too much attention to the most vocal minority of consumers. This is a very valid question, but if you are a marketer and that the second highest link on a search query about your brand is a catalogue of disasters you hoped to keep secret, you know that the damage is done. Bloggers won’t let you cover up your shortcomings anymore. You have to fix what is broken quickly as consumers are bound to find out what works and what doesn’t. If a consumer voice up, check if this is an isolated case (see “reclaim the call centre�) and address the issue promptly. Publicise what you are doing to fix it.

3. Be prepared to join the conversation

Marketers should familiarise themselves with blogging dynamics and newsgroups etiquette. Several companies have successfully established company blogging policies and have equipped their staff with expertise in dealing with bloggers. The decision to blog or not needs careful planning but you need to gather some experience about it sooner than later if you want to remain in touch with your increasingly tech savvy and networked consumer base.

4. Treat influencers like VIPs

Nowadays, you have to pitch to bloggers too. Find out who the influencers in your sector are and treat them like VIPs: exclusive previews, product testing, consultation on marketing plan, customer services audit, etc… This is what companies like Microsoft (with their developers network) or Alfa Romeo (who is running a successful online community leaders program) have been doing for years.

5. Tailor your marketing for consumer-to-consumer distribution

Advertisers seem to have discovered WOM’s effectiveness with Burger King’s Subservient Chicken viral campaign. A few months ago, Microsoft launched a campaign to recruit bloggers to promote Longhorn. Vespa has recently launched a blog to provide “tips on the latest tools to get around cities more quickly and enjoyably� while Ubisoft encourages girls into gaming via the Frag Dolls blog. Technology company Marqui even pays bloggers to mention their products. This is a different world and it needs different rules and different formats. Rehashing your ad campaign or your PR ideas will not work. You need to think about it differently, from start. Talk to the experts.

6. Create a platform for consumers to express themselves

If you want to create a blog, allow readers to comment and do not censor or remove their postings just because you don’t like what they have to say. It takes courage to listen but consumers take notice as David Gee from HP found out. Ultimately, you need to contribute positive buzz online, both in quality and volume. That means encouraging consumers to say good things about your products or direct them to where they can. Gap launched the “How Do You Wear It?� campaign to invite people to upload pictures of themselves fully Gap clothed. Mercedes Benz goes one step further and invites customers to co-create its advertising campaigns. Often, the conversations are spontaneous: a lot of positive brand messages are posted every day at the iPod Lounge while NikeTalk, the “non-affiliated online sneakers community� received 200 million visits.

7. Let consumers be your marketers

Consumers know best what make them tick and how to spread their enthusiasm to their friends. “Network marketing� companies, from Avon to Tupperware have been turning consumers into ambassadors for decades. I will not be surprised if companies look into their experience to help shape their CGM strategy. The local gym club offering gifts for any friends you convince to buy a membership is using a similar technique of capitalising on consumer’s connections and marketing skills (and you would not recommend it to your friends if you did not enjoy the experience).

Technology now allows corporations to bring these relational techniques to a mass audience. Regus, the office rental company is using social network Ecademy to market its small business offer. Procter & Gamble runs Connect + Develop, a program aimed at generating new product ideas from consumers and external experts. It is credited for several successful product innovations “Customer made� report, Trendwatching.com..

Some companies have pushed customer involvement further by allowing customers’ reactions to a marketing campaign to shape its direction. My favourite example is Sega’s ESPN NFL Football campaign were rumours of an X-file style conspiracy to cover-up violent side effects generated by playing a video-game were orchestrated by advertising agency Wieden + Kennedy and thousands of consumers. The campaign integrated TV spots, blogs, newsgroups, fake lawyers letters, viral videos, product sampling, newspaper classifieds, etc… in a real immersive and consumer driven brand experience. Sega sales exceeded expectations by 20%.

WOM has always been the driving force of businesses yet as a marketing discipline, it is still in its infancy. How will technology, consumers and businesses shape its development and what will be the consequences for old school advertising and public relations is still up for debate. What is certain is that the fundamentals underpinning its renaissance guarantee that consumer feedback and recommendations will be increasingly important and influential in guaranteeing a marketing campaign’s success. After decades of being told that the consumer is King, I finally feel like one.

About the author

Joel Cere heads Hill & Knowlton’s online communication practice (Netcoms) for Europe, Middle East and Africa and manage several global marketing initiatives for the firm. He has expertise in e-marketing, communication, trans-national account management and strategic planning. Prior to join Hill & Knowlton, Joel worked for Grey Interactive UK as Strategy/Practice Director for financial, healthcare and consumer good clients and consulted on international projects in Paris and Singapore where he ran his own agency. He has been a guest lecturer at the University of Metz, France since 1999 and is currently studying for a MBA at the London Business School. Joel is a member of the Singapore UK Association and of the Marketing Society.