FREEDyourMind

Word of Mouth, Twitter and the WeinerMobile

I am at the Word of Mouth Marketing Association Summit (WOMMA).  A great group of people that are at the forefront of the word of mouth marketing movement.  And with that cutting edge thinking the experience of being at WOMMA is an experience.  People are twittering, blogging and who knows what else thorughout the conference (search for #WOMMA on twitter). 

While at times I have wondered about the value of twitter, I saw some value here at the WOMMA show.  You get instant feedback on the presentations.  It kind of reminded me of the CNN coverage of the presidential debate.  As I was a participant in a debate on the ACSI vs. NPS, the twitter traffic gave me instant feedback on the debate.  Now debating against NPS is fun and easy.  NPS is a great example of a BAD METRIC.  No accuracy, precision or reliability. You might be better off using a dart board then NPS.

And I had another experience of a lifetime.  As an example of word of mouth marketing, the WeinerMobile from Oscar Mayer was at the conference.  And as my luck would have it, one of my colleagues, Gavin Hewitt, won us a trip in the WeinerMobile.

Now, imagine this, cruising down the Las Vegas strip in the WeinerMobile.  Talk about word of mouth.  Although I am not sure what they were saying.  Check out www.hotdoggerblog.com. 

Off to WOMMA

I am off to speak at the Word of Mouth Marketing Association's (WOMMA) annual summit in Las Vegas.  It should be an exciting conference.  Word of mouth can have a powerful impact.  I think the focus on word of mouth is a very important effort and I applaud those that got the WOMMA started.

But I also think there is a lot of misinformation on the metrics around word of mouth.  I will be participating in a debate about NPS, an often used proxy or metric of word of mouth.  It is also a very misleading metric. Join me at WOMMA in Las Vegas and you can learn more.

New Businesses Take Advantage of Power of Word of Mouth

I'm seeing more and more businesses pop up that are designed to capitalize on the time-honored fact that people rely more on recommendations from others than on advertising and marketing when making purchase decisions.

The latest is MarketplaceStories.com, a social media website where shoppers can make connections with each other, share opinions and recommendations, and help each other research products and services. It looks like you can get a very basic level of access with a free membership or a more robust set of features and benefits for a paid premium membership.

It seems they have set it up so that it will be hard for companies to game the system, which is always my first concern when it comes to formalized word-of-mouth systems (like Amazon reviews, for example, which are littered with suspicious product reviews that really seem like they were written by the manufacturer or author). But I will be curious to see if people are willing to pay for word-of-mouth advice, which theoretically is available for free all over the internet.

UK Puts Restrictions on WOM Marketing

Starting May 26, the U.K. is putting strict restrictions on word-of-mouth marketing and making it a criminal offense for marketers to misrepresent themselves as consumers, according to Ad Age. A new law will make it illegal for brands to seed positive messages online without making the origin of the message clear. Apparently this legislation has already been in place throughout the rest of Europe since January 1.

This is pretty interesting and pretty revolutionary. I think there would be a lot of people in jail right now or fined to the hilt if such a law were passed in the U.S.!

Word of mouth marketing has become such a difficult area to navigate precisely because so many companies participate dishonestly. Just look at reviews on Amazon.com and ask yourself how many of them are real and not from the company itself, trying to drum up support and interest.

I think usually, consumers can tell when they’re being duped, and the loss of loyalty and the backlash from being discovered is worse than any fine the government might impose. But I also think marketers get away with this A LOT of times when consumers don’t necessarily figure it out. There are ad agencies and marketing agencies that have made a name for themselves by designing and implementing campaigns that are designed to look “grassroots” and “viral.” It’s a whole industry here in the U.S.

I still think that at the end of the day, people will take advantage of any open system—it’s human nature. For now, WOM still works, and as a result, it’s valuable. As long as WOM recommendations are a valuable commodity, there will be people manipulating it for their own means, just like everything else in human history.

Measuring Word of Mouth

I have a longer version of the article on measuring Word of Mouth that I wrote for DM News available if this is a topic of interest to you. We had to cut the one that appeared in print a bit for space reasons. Just shoot me an email or leave a comment and I'll send it to you. It should also be available soon on our website.

Okay, I'll Bite

Richard Owen, CEO of Satmetrics has issued a response, of sorts, to the numerous criticisms of the Net Promoter methodology that have come from us, in a published paper by IPSOS, and from folks like Ron Shevlin, other academics, and scores of other critics. I’ve seen NPS fans in the blogosphere practically begging Fred Reichheld or someone from Satmetrics to address the criticisms point-by-point and put them to rest once and for all.

But the only defense they really offer is that a) the critics have something to gain from the attacks b) companies wouldn’t be using NPS if it didn’t work (right, because companies never do stuff that doesn’t work!), and c) NPS may not work as well as more complex and comprehensive metrics, but it’s so simple and easy that it doesn’t really need to.

I saw Fred Reichheld also has a new blog post up about how you can consider yourself a user of Net Promoter even if 1) you aren’t asking only one question 2) the question you ARE asking isn’t “the ultimate question” and 3) you are doing anything at all to increase promoters and decrease detractors.

By this definition, we are all NPS users, which I guess is his point. Though when the concept set forth in a very specific book is diluted down that much, I don’t really get the point of calling it “Net Promoter.” It’s a bit like Coke going out there and saying that you can consider yourself a Coke drinker if you’re drinking any liquid, whether or not it is sweet, carbonated, and brown.

I guess the criticism is starting to sink in a little, so they’re doing their best to bring the issue back to the idea that measuring promoters and detractors is important, no matter how you do it. But it seems like they are just changing definitions around so that anything can be considered a Net Promoter system rather than addressing the criticisms of the specific plan they have been suggesting for years now.

Here’s the bottom line: likelihood to recommend is EXTREMELY IMPORTANT, but it is NOT the only thing you need to measure. And both of these blog posts are kind of missing that key point. We all agree that people should be paying attention to word of mouth. We all agree that one positive aspect of Net Promoter is that it’s gotten a lot of companies to rally around the concept of the customer, which many were not previously doing.

But #1, promoters and detractors are not the only think you need to keep track of. That metric, no matter how you measure it (NPS or some other system) is not going to predict growth. There are just too many variables—not all products lend themselves to recommendation, not all people are the sort to talk about their experiences, etc.

And #2, NPS just isn’t the best way to measure recommending because it overstates detractor behavior and has high margins of error.

So kudos to Reichheld and Satmetrics for getting the conversation started. But it’s time to stop holding on to this notion of NPS as a brand that must be protected and defended at all costs, and start getting at what actually works. Sure, one of the things we should all be paying attention to is how many people will recommend our company or not. But that issue is not the singular issue facing companies today. Continuing to hold on to this outdated concept is going to hurt far more companies than it helps.

There is apparently a roundtable at the WOMMA Research Symposium this morning, led by Walter Carl and including representatives from both sides of the NPS debate on whether you would recommend NPS as a metric. They’re going to make the audio recording available after the event, so I’ll be interested to hear that discussion. It seems there are still very specific criticisms of NPS that have not been addressed by the practitioners who promote it.

Is Anyone Really Surprised?

The latest mini-corporate scandal-in-the-making is CEO’s who participate anonymously in online message boards, lauding their own companies and disparaging competitors, all while pretending to be someone else with no vested interest in the company’s fortunes. The Whole Foods CEO started the trend (of getting caught, at least).

It’s fun to wag our fingers and chastise leaders who should know better, and we ALL agree this wasn’t smart, especially the bits about trying to influence investment in your own company vs. in a competitor.

But what it really points out is a lack of transparency in word of mouth (WOM) marketing–a tool that more and more companies are relying on and looking at as scientific. At the end of the day, people will take advantage of any open system no matter how much hand-wringing the WOM community does about ethics and best practices. WOM is valuable, and for now it still works. As long as that’s true, there will be people manipulating it for their own means, just like everything else in human history.

Most savvy internet users know that when they’re reading reviews on Amazon.com, a decent proportion of them come from BzzzAgent, a company that pays readers to review certain books that want to create a word of mouth buzz. When you read reviews on iTunes, how many of them came from the marketing department of the band’s record label? And when you read a Yahoo! investment message board lauding one stock over another, did it really come from your average Joe investor (as seems to be the case) or from an anonymous board member, CEO, or shareholding employee pretending to have no unusual interest in the subject at hand?

The point is that you don’t know and you can’t know. Reading opinions on a message board isn’t like chatting with your neighbors at a cookout, where you can see who is saying what and have at least some vague sense of any ulterior motives when they pick or pan some book or restaurant or cell phone or stock.

Internet users need to take all anonymous WOM recommendations they read with a huge grain of salt, and marketers need to prepare for the day when these kinds of tactics won’t work anymore because people are on to the fact that they’re essentially being gamed.

Making User Reviews Work For You, Not Against You

I had the opportunity to be at the Shop.org conference in Orlando last week and listen in on an interesting presentation on User Reviews moderated by Patti Freeman Evans and presentations by Lorna Borenstein of Yahoo, Jacob Hawkins of Overstock.com, Brett Hurt of Bazzarvoice and Sarah Fay of Isobar.

The point was made by Lorna about the strong impact of advocates. She used a great analogy, a drop of water and how it creates a wave much larger than the original drop. The question was posed, “How do you get advocates to promote you?”

Now, user reviews, community sites, blogs, etc., are great ways to enable that advocate promotion. But, word of mouth, while a potentially powerful accelerant, is only an accelerant when it is positive. So, while it is great to enable your advocates, don’t lose focus on the prize.

The prize is satisfied customers. Our research consistently shows that customer satisfaction drives positive word of mouth. Also make sure that when you are measuring word of mouth, you not only measure positive word of mouth, but also negative word of mouth. Simply looking to see if people will recommend doesn’t not measure negative word of mouth. You cannot assume because someone doesn’t recommend that they are a negative. There are many reasons (the product, the person, etc.) why people won’t recommend, but will still be great, loyal customers.

So, enable your advocates, but also make sure you make your visitors and customers word of mouth a positive influence on your business, not a negative influence. It all starts with satisfying your visitors and customers.