Death by Word-of-Mouth: Socialize Your Brand NOW

Don’s social media poem:

A Facebook fan tweeted his friend

That he liked a good show now and then,

And to his surprise

His good friend advised:

Alterian 2010!
Click Here to See all the Presentations
From Alterian’s Engaging Times Summit


Scary thought:
Gen Y consumers now
Generation Gap? outnumber Baby Boomers


Or Technology Gap?
96% of Gen Y consumers
belong to a social network


“The future is already
here. It’s just not evenly
distributed yet.”

William Gibson



Strategy. Execution. Results.

84% of consumers trust the
recommendations of their friends

>70% trust online recommendations
from complete strangers

Only 5% of consumers trust advertising

Source: “Your Brand: At Risk? Or Ready for Growth?”
Alterian White Paper, 2010

Death by word of mouth…

Box office receipts down
40% the day after release!


Screw up today, and the Strategy. Execution. Results.

“news” will be permanent

“You
can’t
un-Google
Yourself”
Linda Kaplan Thaler, CEO, Kaplan Thaler Group




“You can't take something bad off the Internet. That's
like trying to take pee out of a swimming pool.”

Grant Robertson, blog post, May 1, 2007




Lack of trust slows transactions
down and imposes frictional costs

When more trust is required, business
thrives, as obstacles are reduced

The Need for More Trust Has Boosted Business


works because customers Strategy. Execution. Results.

are social animals

Bees and ants communicate new
discoveries to benefit the group



In the absence of communication
among your customers, advertising rules

But when customers talk to each other,
it’s the customer experience that counts

Now suppose you were a food
source for bees…



Customers go online to talk about brands and
their experiences with them

Do you host the conversation your customers
are having? Or does someone else?

Where is your brand’s “community?”


Social media is like a cocktail party

In social media: Apply the “1-9-90 Rule”

Some of the guests initiate most discussion
1%

Others “hang on” and like to contribute
9%

Still90%
others just listen
Most people don’t talk much but they
still enjoy the party!

Social Media “Engagement Pyramid”

Curating

Producing

Commenting

Sharing

Watching

Source: Altimeter Group (Li and Owyang)

How to engage social consumers Strategy. Execution. Results.

Curators: Public recognition, rating trusted advisors

Producers: Platform for VOC, recognition and ratings

Commenters: Open, friendly community, no trolls

Sharers: Tools, recognition

Watchers: Relevance, monitored content

Source: Altimeter Group (Li and Owyang)

17
Distribution of social media participants

United
United States South Korea
Kingdom

Curating <1% <1% <1%

Producing 24.2% 52.8% 18.6%

Commenting 36.2% 74.3% 31.9%

Sharing 61.2% 62.9% 57.6%

Watching 79.8% 91.1% 77.1%

Source: Global Wave Index Wave 1, Trendstream.net, July 2009


Tools for making sense of social networks
and peer-to-peer communications

Network analysis: To identify and quantify the
influencers and the influenced

Sentiment analysis: To understand conversations,
attitudes and dominant opinions in social media


From Alterian’s Engaging Times Summit Strategy. Execution. Results.

Social networks evolve by
“preferential attachment”

Preferential attachment
can create a
“cascading” effect


Cascading is inherently
unpredictable




Netscape has a
million collaborating
members

But 13% of Netscape’s
“most popular”
postings were done
by a single user

unpredictable




Netscape has a
million collaborating
members

900,000 registered
But 13% of Netscape’s
“most popular”
users on Digg, but
postings were done one third of all
by a single user home-page
postings come from
just 30 users

unpredictable




900,000 registered
users on Digg, but
one third of all
home-page
postings come from
Reddit’s most
just 30 users
widely read user,
Cascading is inherently Adam Fuhrer, has
millions of page
unpredictable views, including MS
Vista reviews




Reddit’s most
widely read user,
Cascading is inherently Adam Fuhrer, has
millions of page
unpredictable views, including MS
Vista reviews

Adam
Fuhrer is 12
years old!


Therefore: Word of mouth is also
inherently unpredictable

Just 15% of WOM programs
show positive results!



Be careful with
“WOM marketing”

Despite its customer-friendly architecture, the press
portrayed Speak Easy as sneaky and manipulative

You can’t manufacture “authentic” word of mouth
If it isn’t spontaneous, then it isn’t authentic!


Taking the customer’s perspective…
…is the most critical step when it comes to
customer engagement
You have to see the world through the customer’s eyes

The customer is not interested in your stores or
your products or your people
The customer simply wants his need met

So don’t just speak your brand’s language

Engage by speaking your customer’s language


Can you speak the customer’s language?


Speaking the customer’s language…

…means engaging the customer as a fellow
member of the human race

And every human being is completely unique!


And what about your brand advocates?
What are they actually worth?

One research study of customers separated
“spending” value and “referral” value
LTV = CSV + CRV (i.e., spending plus referrals)

Surprise: Best references aren’t
always the highest spenders!

Source: “How Valuable is Word of Mouth?” Harvard Business Review, October 2007


A telecom company
CSV vs. CRV - Telecom Company

$2,500

$2,000

$1,500 Most valuable referrers
Value

CSV
$1,000 CRV

$500

$-
1 2 3 4 5 6 7 8 9 10

Most valuable spenders Customer Decile

Source: “How Valuable is Word of Mouth?” Harvard Business Review, October 2007


Network
influence
DoubleClick
varies by
analyzed 6,000
Web users
individual
1,000 influencers with certain traits

Use the Web more than twice as much
“People often ask my
Pay more attention to online ads, and
advice about…”
want more relevance
“I am an expert in
But also more likely to clear their cookies
certain areas…”
regularly, as well as to fast-forward
through video commercials

Within Social Networks
The only way to
succeed in a
networked world

Build and
influencers maintain a
and reputation for
connectors
are curious trustability
and
inquisitive
people.

Alterian’s
“Social Engagement
Index”
100 = Average

Super Bowl 2010

Google reached ~103.5M

Top 10 account for 50%

34 (of 46) below average

COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 34 34

Calculating the Alterian
“Social Engagement Index”

Social Engagement Index (SEI) incorporates:
1. Number of social media mentions, and

2. Influence of author

∑ (N x I) i
SEIi = x 100
Average

SEI changed over time

Pre-Game Game Day



SEI changed over time

Post Game

Some brands showed better persistence


Sentiment analysis: Making sense
of written and spoken language

Analyzing attitudinal information requires
evaluating the “valence” of words

versus


Michael Jackson dies
Heath Ledger dies

Gross National Happiness Index


Sentiment analysis:
“Voice of the customer” in real time

Used online searches of consumer
comments in launching Windows 7

Tapped customer search requests, along with
comments in blogs, YouTube, and Twitter, to
advertise its Lotus business software

Uses feedback from TripAdvisor, Twitter, and
Facebook to position its casino brands


Why the sudden surge of negative blog
sentiment after a rain-delayed game?

Stadium officials mistakenly told hundreds of fans the game
had been canceled

But StubHub denied requests for refunds, because the game
had actually been played

Sentiment analysis tool spotted trouble brewing online

So company offered discounts and credits to affected fans


Alterian’s
Social
Sentiment
Engagement
Index
(SSEI)

Super Bowl 2010


Calculating the Alterian
“Social Sentiment Engagement Index”
SSEI incorporates:
1. Number of social media mentions,

2. Influence of author, and

3. Valence of sentiment (either +1 or -1)

∑ (N x I x V)i
SSEIi = x 100
Average

Sentiment helps explain persistence



Monitoring social media mentions

Listen for mentions of your brand (and your
competitors’ brands!)
Who is talking about the brand?

What are people saying about the brand?

Where are they talking about the brand?


Monitoring social media mentions

Also, pay attention to individual customers
What pain points are being highlighted? Directed to
company at large, or a particular situation?

What is the emotion or sentiment being shared, either
negative or positive?

What information is being shared about the various
customer experience touchpoints?


Handling individual problems
“Don’t bother wasting money on social media until
your organization can competently handle a
customer phone call or email.”
– John Burton, SAP Labs

To fix a service problem:
 Acknowledge
 Apologize
 Act


Handling individual problems
Monitors Twitter, blogs, and online
review sites for negative mentions

2400 stores in nine countries



Twitter is WAY more than just “Twitter”
Why customers turn to Twitter
They can avoid the call center altogether
Complaints via traditional channels get lost or just
fall through the cracks
They’re not being heard or taken seriously
Twitter agents can be more objective and
empathetic
Immediate resolution to cross-departmental issues
The crowd can participate in solving customer’s
issues, providing better answers


How Carphone Warehouse uses Twitter
Customer
posts on
her blog My Carphone Warehouse horror story!
Little did I know when I bought my phone from CPW
that I would enter a week-long nightmare…

Customer
then Read about my Carphone Warehouse horror story
“tweets” here: www.customerblog.co.uk
the blog
Mon, 8 Mar, 15:55

Sorry to hear about your CPW problem. Maybe I can CPW
help. Send me a direct message @CPWcares responds
to tweet
Mon, 8 Mar, 17:34


How Carphone Warehouse uses Twitter
Customer
posts on
her blog My Carphone Warehouse horror story!
Little did I know when I bought my phone from CPW
that I would enter a week-long nightmare…

Customer
now writes Update: CPW comes through for me!
a positive First, I want to thank CPW for responding to my problem
blog post! so quickly and professionally. I’m very impressed that
they are taking customer service so seriously…



Assign a 20-something to monitor your
brand mentions on social media sites

Analyze what your customers are saying,
and how they influence other customers

Start intercepting customer complaints
before they become complaints!

Some things you can do now


Do you allow reviews on your site?

Radical idea: Everyone here should allow
customers to review products and services

The technology is inevitable


And don’t forget:
People are just like big honeybees!



@DonPeppers

Peppers & Rogers Group
Management consultants in
customer strategy issues
Magazines, newsletters,
research white papers

Offices and clients around the world

To subscribe to the “1to1 Weekly” email newsletter: dpeppers@1to1.com


Death by Word-of-Mouth: Socialize Your Brand NOW

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Death by Word-of-Mouth: Socialize Your Brand NOW