November 27, 2006
People Talk
Keller Fay knows that people like to talk and the word-of-mouth research firm is in the process of trying to find out about what.
Since April, Keller Fay has interviewed 100 people a day and asked them to keep a diary of conversations they’ve had about products and brands.
Ed Keller, the chief executive of Keller Fay, told The New York Times, “When you talk about engagement, as a lot of marketers are, people talking about your brand is the ultimate engagement.”
The “what” consumers are talking about, according to Keller Fay, mostly centers around media and entertainment, such as movies, television and print publications. They also, however, spend time talking about food, travel brands and retail stores.
Among retailers, Target, Kmart, Sears, J.C. Penney, Gap, Victoria’s Secret and Wal-Mart top the list of stores consumers talk about most.
Heather Dougherty, senior retail analyst for Nielsen/NetRatings, said, “Everyone knows that word of mouth is important, and it’s something that goes on all the time. But being able to really harness it can be very difficult.”
While brand marketers and retailers are anxious to make word-of-mouth work for them, Todd Tweedy, chief executive of BoldMouth, said it often requires that companies listen to things they would rather not hear.
“Some advertisers just aren’t ready to be more customer-facing,” Mr. Tweedy said.
One thing that brands and retailers might like hearing is that roughly half of the consumers in the Keller Fay study who talked about products and stores also mentioned an ad, promotion or article on the company along with it. It seems that advertising and public relations do work.
Discussion Questions: Are there metrics in place to help brands and retailers assess the impact word-of-mouth has on their business? Is it possible
for brands and retailers to harness word-of-mouth? If yes, how would they harness it?
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Word of mouth works quite well online, and Bill Robinson’s points about big retailers not having a mechanism to harness word of mouth raises the interesting possibility of combining the two. For example, Amazon and similar online retailers have extensive consumer reviews of almost everything they sell. It really changes the buying the experience when you can “hear” from dozens of people who have purchased and used that product. Why can’t that information be brought in-store? Take a product over to a scanning station and the display should let you browse through consumer comments about that product. Include a special code on a receipt to allow consumers to log in and review the products they bought that trip. Make it worth their while by entering them in a sweepstakes or something.
Manufacturers, working with retailers and via their own websites could use similar tactics to collect word of mouth and share it with potential customers.
Casual word of mouth is important, and diary studies are an interesting tactic to monitor it, but I think harnessing consumer opinion and actively using it is even more interesting.
WOM is significant and, to borrow a phrase, trying to measure it right now is like trying to nail Jello to the wall. Everyone knows that when it works, it has incredible power. But, we are still at a stage where most companies have little to no ability to control WOM. Within the next few years, that will change and companies and advertising shops will become much more sophisticated about how to use and measure this tactic (which may be a good or bad thing, depending on your perspective).
If advertising works, word of mouth works much better. People tend to rave about their positive experiences in purchasing products and services. Shoppers are like athletes talking about their three point shot to win the title, or long putt to win the tournament. Successful shoppers talk about their wins.
Retailers should do everything they can to stimulate more word of mouth discussion among fellow shoppers. But are most retailers really interested in a shopper’s success in using their products? Try calling Home Depot to tell them about your successful gardening project with items purchased from their gardening and outdoor tools department. Call Federated to tell them about how great your daughter looked with the outfit you purchased for her at Macy’s. They won’t know how to process this kind of feedback. They are not set up for word of mouth. But they should be.
The impact of negative word of mouth is also an area where huge improvements are needed across the industry. Consumers love to tell about rudeness of retail employees, security threats, long lines, butt brushes, and high prices. Whenever there is complaint, the potential for customer loss is magnified by word of mouth. How many retailers do a good job in managing complaints? It runs counter to the self-service retail world we live in.
Word of Mouth (WOM) is gaining in importance and becoming more main stream. We saw this back in 2004 in our Global Future of Packaging Program. Traditional media advertising has lost its effectiveness and WOM is taking its place. What we did not see 3 years ago was that consumers, activist groups and the internet would come together to produce a new trend: transparency! This means that whatever a company does, it gets noticed very fast — both good and bad. As a result, WOM marketing will play a very important role and has the power to make and break brands and companies. I don’t believe there are good metrics out there to measure effectiveness but this an opportunity area. On another note, I was surprised that Sears and Kmart were in the most mentioned companies!
Any brand or retailer, no matter how popular or obscure, can do a Google search on its name, and summarize the first 2 or 5 or 10 or 100 pages of citations. This can be done once a day, once a week, or once month. As long as it’s done on a predetermined schedule, the opinion themes will emerge.
Word of mouth is far more effective than advertising and with the vehicles in place today to allow people to “talk” to far more people than ever, it means word of mouth will only continue to grow in importance. With any word of mouth campaign the challenge is to get the right spin on what’s being said without taking control of it. To do this, companies merely need to offer the consumer the best of whatever they have to offer and to do it in complete honesty and let the spin occur. Target, and Nordstrom are two companies that have been successful in creating buzz by doing this.
WOM is fine for the 1% to 2% of brand enthusiast/or brand haters that really care about any specific brand.
WOM rates tops with Target, Kmart, Sears, J.C. Penney, Gap, Victoria’s Secret and Wal-Mart. Take a good look at the top TV advertisers this holiday season, and throughout the year. Do you see a correlation? WOM, much to WOM agencies’ dismay, appears to be driven by dollars, not people.
The Internet has made WOM more important than ever. I always check out reviews for products at sites like Target or Amazon before I buy and you bet they make a big difference. I don’t pay as much attention to the positive reviews (since they could be submitted by the retailer/manufacturer) as I do the negative ones.
For example, I needed a new coffeemaker. I considered ones with a thermal carafe until I read reviews about how they didn’t keep the coffee warm long. I considered a certain brand until I read how its makers started leaking at the base. And so on, until I found the right one.
WOM on the Internet is impossible to control, but it does allow retailers and manufacturers to learn what their shortcomings are and address them.
Not sure what the ‘buzz’ word means, but the key to any consumer research is 1) how it is done (with validation, if you will) i.e., phone, e-mail, face to face, mall intercept, etc; AND 2) the demographic profile and balance of the responders.
Sure, word of mouth is a valued, but a somewhat uncontrolable marketing tool. But, some brands and retailers have started out using ‘word of mouth’ as their marketing thrust! Starbucks, Krispy Kreme, Monster energy drink, West Point Market (outside of Dayton), the service level of Nordstrom (before its marketing efforts of some years ago) and Seattle “grunge” music groups.
Yes, a great sale complemented with a superior service level, or a new book that hasn’t hit the NY Times list, is heard via ‘word of mouth’, probably a lot – like at Thanksgiving dinner, bridge gatherings, in blog sessions, etc.
“Word-of-mouth” is also known as ‘the good, the bad, and the ugly’! – for it can also kill a product sale if out of stock, like the return of the Elmo product; Sony’s limited shipment of its new tech toy; and waiting in line at 4 AM for a tech toy. The latter, happening at Best Buy in Louisville, was a plus event and received positive press when the Best Buy management team had a system for the waiting consumers, and gave out coffee.
Bottom line, if word-of-mouth is to be captured and used as a benchmark, a couple of years of data is most appropriate, and a cross section of shoppers, mirroring the U.S. population or for a market are essential.
One more thought: how does a ‘word-of-mouth’ research project capture the younger generations brought up in a world of technological innovation…occurring by the month, if not the day? Blogs, other social network web sites, or what? These generations really rely on “word-of-mouth’ input from their friends. Problem? These younger consumers have major purchasing power, and spend over $50 billion in goods and products! Problem…in researching? Hmmmmmmmmmmmm
Word-of-mouth has its pluses and minuses. On the one hand it can create a tidal wave for a product as it did for South Park in the late 1990’s and currently for YouTube. Conversely, negative word-of-mouth spreads sometimes faster an positive word-of-mouth. A typical dissatisfied customer tells 8-10 people. A dissatisfied customer decreases revenue at a rate of 1.8 times to what a satisfied customer adds to a business. But no one should argue that it isn’t a powerful tool.
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Word of mouth works quite well online, and Bill Robinson’s points about big retailers not having a mechanism to harness word of mouth raises the interesting possibility of combining the two. For example, Amazon and similar online retailers have extensive consumer reviews of almost everything they sell. It really changes the buying the experience when you can “hear” from dozens of people who have purchased and used that product. Why can’t that information be brought in-store? Take a product over to a scanning station and the display should let you browse through consumer comments about that product. Include a special code on a receipt to allow consumers to log in and review the products they bought that trip. Make it worth their while by entering them in a sweepstakes or something.
Manufacturers, working with retailers and via their own websites could use similar tactics to collect word of mouth and share it with potential customers.
Casual word of mouth is important, and diary studies are an interesting tactic to monitor it, but I think harnessing consumer opinion and actively using it is even more interesting.
WOM is significant and, to borrow a phrase, trying to measure it right now is like trying to nail Jello to the wall. Everyone knows that when it works, it has incredible power. But, we are still at a stage where most companies have little to no ability to control WOM. Within the next few years, that will change and companies and advertising shops will become much more sophisticated about how to use and measure this tactic (which may be a good or bad thing, depending on your perspective).
If advertising works, word of mouth works much better. People tend to rave about their positive experiences in purchasing products and services. Shoppers are like athletes talking about their three point shot to win the title, or long putt to win the tournament. Successful shoppers talk about their wins.
Retailers should do everything they can to stimulate more word of mouth discussion among fellow shoppers. But are most retailers really interested in a shopper’s success in using their products? Try calling Home Depot to tell them about your successful gardening project with items purchased from their gardening and outdoor tools department. Call Federated to tell them about how great your daughter looked with the outfit you purchased for her at Macy’s. They won’t know how to process this kind of feedback. They are not set up for word of mouth. But they should be.
The impact of negative word of mouth is also an area where huge improvements are needed across the industry. Consumers love to tell about rudeness of retail employees, security threats, long lines, butt brushes, and high prices. Whenever there is complaint, the potential for customer loss is magnified by word of mouth. How many retailers do a good job in managing complaints? It runs counter to the self-service retail world we live in.
Word of Mouth (WOM) is gaining in importance and becoming more main stream. We saw this back in 2004 in our Global Future of Packaging Program. Traditional media advertising has lost its effectiveness and WOM is taking its place. What we did not see 3 years ago was that consumers, activist groups and the internet would come together to produce a new trend: transparency! This means that whatever a company does, it gets noticed very fast — both good and bad. As a result, WOM marketing will play a very important role and has the power to make and break brands and companies. I don’t believe there are good metrics out there to measure effectiveness but this an opportunity area. On another note, I was surprised that Sears and Kmart were in the most mentioned companies!
Any brand or retailer, no matter how popular or obscure, can do a Google search on its name, and summarize the first 2 or 5 or 10 or 100 pages of citations. This can be done once a day, once a week, or once month. As long as it’s done on a predetermined schedule, the opinion themes will emerge.
Word of mouth is far more effective than advertising and with the vehicles in place today to allow people to “talk” to far more people than ever, it means word of mouth will only continue to grow in importance. With any word of mouth campaign the challenge is to get the right spin on what’s being said without taking control of it. To do this, companies merely need to offer the consumer the best of whatever they have to offer and to do it in complete honesty and let the spin occur. Target, and Nordstrom are two companies that have been successful in creating buzz by doing this.
WOM is fine for the 1% to 2% of brand enthusiast/or brand haters that really care about any specific brand.
WOM rates tops with Target, Kmart, Sears, J.C. Penney, Gap, Victoria’s Secret and Wal-Mart. Take a good look at the top TV advertisers this holiday season, and throughout the year. Do you see a correlation? WOM, much to WOM agencies’ dismay, appears to be driven by dollars, not people.
The Internet has made WOM more important than ever. I always check out reviews for products at sites like Target or Amazon before I buy and you bet they make a big difference. I don’t pay as much attention to the positive reviews (since they could be submitted by the retailer/manufacturer) as I do the negative ones.
For example, I needed a new coffeemaker. I considered ones with a thermal carafe until I read reviews about how they didn’t keep the coffee warm long. I considered a certain brand until I read how its makers started leaking at the base. And so on, until I found the right one.
WOM on the Internet is impossible to control, but it does allow retailers and manufacturers to learn what their shortcomings are and address them.
Not sure what the ‘buzz’ word means, but the key to any consumer research is 1) how it is done (with validation, if you will) i.e., phone, e-mail, face to face, mall intercept, etc; AND 2) the demographic profile and balance of the responders.
Sure, word of mouth is a valued, but a somewhat uncontrolable marketing tool. But, some brands and retailers have started out using ‘word of mouth’ as their marketing thrust! Starbucks, Krispy Kreme, Monster energy drink, West Point Market (outside of Dayton), the service level of Nordstrom (before its marketing efforts of some years ago) and Seattle “grunge” music groups.
Yes, a great sale complemented with a superior service level, or a new book that hasn’t hit the NY Times list, is heard via ‘word of mouth’, probably a lot – like at Thanksgiving dinner, bridge gatherings, in blog sessions, etc.
“Word-of-mouth” is also known as ‘the good, the bad, and the ugly’! – for it can also kill a product sale if out of stock, like the return of the Elmo product; Sony’s limited shipment of its new tech toy; and waiting in line at 4 AM for a tech toy. The latter, happening at Best Buy in Louisville, was a plus event and received positive press when the Best Buy management team had a system for the waiting consumers, and gave out coffee.
Bottom line, if word-of-mouth is to be captured and used as a benchmark, a couple of years of data is most appropriate, and a cross section of shoppers, mirroring the U.S. population or for a market are essential.
One more thought: how does a ‘word-of-mouth’ research project capture the younger generations brought up in a world of technological innovation…occurring by the month, if not the day? Blogs, other social network web sites, or what? These generations really rely on “word-of-mouth’ input from their friends. Problem? These younger consumers have major purchasing power, and spend over $50 billion in goods and products! Problem…in researching? Hmmmmmmmmmmmm
Word-of-mouth has its pluses and minuses. On the one hand it can create a tidal wave for a product as it did for South Park in the late 1990’s and currently for YouTube. Conversely, negative word-of-mouth spreads sometimes faster an positive word-of-mouth. A typical dissatisfied customer tells 8-10 people. A dissatisfied customer decreases revenue at a rate of 1.8 times to what a satisfied customer adds to a business. But no one should argue that it isn’t a powerful tool.