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

COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 1


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!

Don’s social media poem:

Click Here to See all the Presentations

From Alterian’s Engaging Times Summit

http://www.alterian.com/NAETSummit10



Scary thought:

Gen Y consumers now

outnumber Baby Boomers G

en

era

tio

n G

ap

?


96% of Gen Y consumers

belong to a social network O

r Te

ch

no

log

y G

ap

?


“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



De

ath

by w

ord

of

mo

uth

…

Box office receipts down 40% the day after release!



Linda Kaplan Thaler, CEO, Kaplan Thaler Group

Screw up today, and the

“news” will be permanent

“You

can’t

un-Google Yourself”







Grant Robertson, blog post, May 1, 2007

“You can't take something bad off the Internet. That's

like trying to take pee out of a swimming pool.”







The Need for More Trust Has Boosted Business

Lack of trust slows transactions

down and imposes frictional costs

When more trust is required, business

thrives, as obstacles are reduced







works because customers

are social animals

Bees and ants communicate new

discoveries to benefit the group



Now suppose you were a food

source for bees…

In the absence of communication

among your customers, advertising rules

But when customers talk to each other,

it’s the customer experience that counts



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?”


Some of the guests initiate most discussion

Others “hang on” and like to contribute

Still others just listen

Social media is like a cocktail party

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

90%

9%

1%

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)



Watchers: Relevance, monitored content

How to engage social consumers

Sharers: Tools, recognition

Commenters: Open, friendly community, no trolls

Producers: Platform for VOC, recognition and ratings

Curators: Public recognition, rating trusted advisors

Source: Altimeter Group (Li and Owyang)



United States South Korea United

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%

Distribution of social media participants 17

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


Network analysis: To identify and quantify the

influencers and the influenced

Sentiment analysis: To understand conversations,

attitudes and dominant opinions in social media

Tools for making sense of social networks

and peer-to-peer communications







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








unpredictable

Netscape has a

million collaborating

members

But 13% of Netscape’s

“most popular”

postings were done

by a single user

900,000 registered

users on Digg, but

one third of all

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

just 30 users Reddit’s most

widely read user,

Adam Fuhrer, has

millions of page

views, including MS

Vista reviews








unpredictable

Reddit’s most

widely read user,

Adam Fuhrer, has

millions of page

views, including MS

Vista reviews

Adam

Fuhrer is 12

years old!


Just 15% of WOM programs

show positive results!

Therefore: Word of mouth is also

inherently unpredictable






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!

Be careful with

“WOM marketing”






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?

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

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!


A telecom company

$-

$500

$1,000

$1,500

$2,000

$2,500

1 2 3 4 5 6 7 8 9 10

Valu

e

Customer Decile

CSV vs. CRV - Telecom Company

CSV

CRV

Most valuable spenders

Most valuable referrers

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


Network

influence

varies by

individual

1,000 influencers with certain traits

DoubleClick

analyzed 6,000 Web users

Use the Web more than twice as much

Pay more attention to online ads, and

want more relevance

But also more likely to clear their cookies

regularly, as well as to fast-forward

through video commercials

“People often ask my

advice about…”

“I am an expert in

certain areas…”


Build and

maintain a

reputation for

trustability

The only way to

succeed in a

networked world

influencers

and

connectors

are curious

and

inquisitive

people.

With

in S

oc

ial N

etw

ork

s

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

Alterian’s

“Social Engagement

Index”

Google reached ~103.5M

Top 10 account for 50%

34 (of 46) below average

Super Bowl 2010

100 = Average


Calculating the Alterian

“Social Engagement Index”

Social Engagement Index (SEI) incorporates:

1. Number of social media mentions, and

2. Influence of author

SEIi = ∑ (N x I) i

Average x 100


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


Gross National Happiness Index

Heath Ledger dies Michael Jackson dies


Sentiment analysis:

“Voice of the customer” in real time

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

Used online searches of consumer

comments in launching Windows 7

41 COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED.

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)

SSEIi = ∑ (N x I x V)i

Average x 100


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?


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?

Monitoring social media mentions


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






Monitors Twitter, blogs, and online

review sites for negative mentions

2400 stores in nine countries

Handling individual problems






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

Why customers turn to Twitter

Twitter is WAY more than just “Twitter”


Read about my Carphone Warehouse horror story

here: www.customerblog.co.uk

Mon, 8 Mar, 15:55

How Carphone Warehouse uses Twitter

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

“tweets”

the blog

Sorry to hear about your CPW problem. Maybe I can

help. Send me a direct message @CPWcares

Mon, 8 Mar, 17:34

CPW

responds

to tweet

Customer

posts on

her blog



http://www.customerblog.co.uk/




How Carphone Warehouse uses Twitter

My Carphone Warehouse horror story!

Little did I know when I bought my phone from CPW

that I would enter a week-long nightmare…

Update: CPW comes through for me!

First, I want to thank CPW for responding to my problem

so quickly and professionally. I’m very impressed that

they are taking customer service so seriously…

Customer

posts on

her blog

Customer

now writes

a positive

blog post!






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






Radical idea: Everyone here should allow

customers to review products and services

The technology is inevitable

Do you allow reviews on your site?


And don’t forget:

People are just like big honeybees!






Peppers & Rogers Group

Management consultants in

customer strategy issues

Magazines, newsletters,

research white papers

Offices and clients around the world

@DonPeppers

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