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Archive for April, 2010

Are talkers all created equal? Maybe not. A new McKinsey article about measuring word of mouth marketing reminded me of the fact not every person’s word has equal value. If you hear about the same product from a blog commenter and from your best friend at brunch, who are you more likely to listen to? Whose word are you more likely to act on? Your friend’s, of course! McKinsey has named these “high-impact” and “low-impact” recommendations. Their research finds that a, “high-impact recommendation—from a trusted friend conveying a relevant message, for example—is up to 50 times more likely to trigger a purchase than is a low-impact recommendation.” So when a marketer says that they want to get a lot of people talking about their product, maybe they should be reminded that quality is often more important than quantity.

So who are these high-impact and low-impact messengers? Well, they are going to change in every situation. There is no secret group of “influentials” that will always give highly trusted recommendations. It is estimated that 8 to 10 percent of consumers are influentials, but the make-up of this group will change depending on the product or brand being promoted. Close friends and relatives tend to offer high-impact recommendations, but so do other defined groups. For example, marketers will target doctors for promoting medications because the word of a medical professional carries a lot of weight. There are talker groups for financial products and services too! McKinsey created a nice visual representation showing the importance of a close/trust and influential talker.

Think about your financial services. Whose recommendation (outside of your own), is highly trusted by your target audience? Even if it’s a small group, getting those people to talk might be more important than getting a hundred positive Yelp recommendations from stangers.

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Looks like big players in the financial industry are starting to realize that traditional advertising isn’t where it’s at anymore! Bank of America recently announced that they would reducing their spending on traditional outlets (print, tv, etc) and doubling spending on digital platforms. As their Head of Marketing Claire Huang put it, “But we’re realizing that digital not only allows you to provide information, you can have real, live connections. It’s not just a flat little square box you have two seconds to look at.” Financial companies have been a little bit behind other industries in realizing this – but I’m glad they’re coming around!

I think the important thing about Bank of America’s move is that they are not just switching from advertising in “flat little square boxes” on paper to “flat little square boxes” on computer screens. Rather than focusing their increased spending on web ads, most of the money is going toward increasing internal efforts, like texting, Twitter tools and webcasts. Huang states, “Traditional advertising of digital like search and banner ads has shrunk a little bit.” The bank understands that improving customer service marketing and two-way communication will be more effective (and targeted) than just plastering sites with ads. It would be cool to see a bank really embrace Twitter and other social media sites in the same way that brands like Zappos have in the past. Could Bank of America be heading in that direction?

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Sounds like a public service announcement, right? Well, in a sense it is. Marketers often forget about the prevalence and power of “secondhand buzz”. What is it? It’s the word of mouth generated by a consumer who has a second-hand experience with a brand. In other words, they’ve heard either positive or negative things about a product or service and repeat these sentiments to others. Unfortunately for companies, most secondhand buzz is negative, because people are statistically much more likely to repeat a bad review than a good one. For example, I’ve never been a Bank of America customer, but I occasionally bad mouth them to others because of the awful stories I’ve heard through the grapevine, (like this one). I’m guessing the bank probably didn’t think about that when they raised people’s interest rates to ridiculous levels or charged obscene fees.

The lesson that banks and credit unions need to remember is that a customer experience story is not just going to be repeated by the person directly involved, but also by second, third, and fourth-hand sources. So take care in making each experience a good one! Because whether we like it or not, consumers tend to be more enthusiastic about issuing warnings than recommendations. The thought of people not wanting to repeat stories about good experiences is kind of depressing, but there are ways to increase “positive secondhand buzz”. Make the customer experience not only good, but also surprising. A customer expects all their experiences to be good – that shouldn’t be a talking point, it should be a given. So, to make it worthy of repetition by second, third, and fourth-hand sources you have to do the unexpected. A restaurant, for example, could give away random gift certificates to diners for their happy hour or dessert. What could you do that would catch people off-guard?

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Have you ever left a gym or ended a contract and experienced forceful selling or callousness during your departure? It’s not uncommon – many companies seem to behave like people who aren’t paying customers no longer affect them. This short-sighted approach to customer service probably digs organizations into a hole they aren’t even aware of. An ex-customer’s negative word of mouth can influence whether people decide to become new customers – and it only takes one bad experience at the end of a relationship to create negative WOM.

Andy Sernovitz posted on this recently and I felt it was a relevant topic for banks and credit unions, who see customers/members come and go all the time. Think carefully about how you respond when a customer/member tries to leave your financial institution. Do you:

1. Try to sell them on something?
2. Pressure them to stay?
3. Stop being friendly?
4. Become unhelpful during the leaving process?

These are all things that could make an ex talk negatively about you – even if their overall experience as a customer/member was positive. It’s the last interaction that will stick in their mind, so if you care what the person says about you, make it a positive one. Switching banks is notoriously hard, and a customer/member will be grateful if you help make the leaving process positive and easy. Remember that customers don’t always leave because they aren’t happy with their experience. People move to new cities, their life situations change – it’s not always about you.

If you ever want an ex back as a customer/member, or ever want any of their friends or family to bank with you, give them a great last impression. Assuming that the rest of their experience with you was positive, send them off with a smile and they should be a reliable source of good WOM.

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In word of mouth marketing we talk a lot about – well, “talkers.” Who they are, what they care about, what they do, how they do it. It would almost seem that we are obsessed with these people…people who shape our campaigns and our products’ success. Now don’t get these folks confused with our “target” – that is a totally different group of people. Sometimes they overlap, but often they don’t.

See, our “talkers” are the ones who talk about our product or service. Not necessarily the ones who use it. Why do they talk? For a variety of reasons – it might make them look cool or knowledgeable. There are even times the “talker” will have never used the product or service, but they continue to sing its praises – hence why the “talker” is so key…they talk to the “target.”

So, this is why we spend so much time figuring out who the “talker” for our product or service is and what it is that will make them want to talk. Is it a direct benefit, like a cool new shirt? Does it make them more credible with friends? Will it get them a trip somewhere? These questions are all answered by asking, “What does our group of talkers care about?” What really makes them tick? Once we know that, we can figure out what the motivation is to get them to talk. Voila! The lesson here…when you are working on a word of mouth campaign, be sure to spend as much time on your “talkers” as possible. They are key in getting the message out and growing it organically.

/Alicia

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