New GE Study: Word-of-Mouth Referrals Improve Traditional Marketing Efforts

Marketers have long assumed content shared by friends or other influencers carries more weight than paid placements.  Someone is more likely to visit a restaurant when referred by a friend, the thinking goes, than from a television or radio ad.

Now General Electric has some proof.

In late 2011, the company compared the effectiveness of a paid advertising campaign and paid advertising campaign coupled with online-sharing.   Overall, consumers who saw the ad and received a referral from a friend were 138% more likely to view GE favorably than those who saw the ad alone.

The results of the test were originally published in the January 25th edition of Advertising Age.

“Personal referrals are far and away the most influential form of communications,” said Sparklight Communications President Joseph LaMountain.  “Yet many companies and causes fail to incorporate word-of-mouth into their marketing and communications campaigns.”

For example, organizations can raise significant levels of awareness, or funding, for an issue by asking its supporters to share  information to friends, neighbors and work colleagues.  Yet too often this valuable “human capital” is not effectively mobilized.

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Word-of-Mouth is Most Trusted Media Source

There’s a new restaurant in town.  What will convince you to try it: A newspaper ad or a friend’s recommendation?

The recommendation wins hands down, every time.  That’s because a recommendation from a friend is a far more trusted source of information than a paid advertisement.

We know that intuitively, but a new report from Nielsen finds that consumers trust in word-of-mouth appeals has increased dramatically: 18% since 2007.  By comparison, consumers trust in paid television and radio advertising has fallen by 25% or more.

According to Nielsen, “92% percent of consumers around the world say they trust…word-of-mouth and recommendations from friends and family, above all other forms of advertising.”  What puzzles me is why more groups and business don’t jump on this bandwagon and get their people talking!

The Amputee Coalition is an organization using word-of-mouth to raise awareness.  During April, the group has recruited hundreds of companies, medical professionals and individuals to distribute educational materials in their community.  The group is hoping to distribute 1 million cards and generate just as many conversations.

A campaign like this also keeps members engaged with the organization.  All-too-often the only time someone hears from a group is when they’re looking for a handout.  Studies show that the more a volunteer is engaged with a group’s mission, the more money they will give to that group.  Talk about a no-brainer!

Opinion Leaders: Past, Present and Future

Last week in class, we discussed a number of historical grassroots movements.  From Christianity, and its call to “spread The Word” to the Tea Party, we examined their similarities but also how methods of communication have changed over the last 2,000 years.

So imagine my surprise when a friend forwarded an article by Carl Elliott from recent edition of The Chronicle for Higher Education on the evolution of “Thought Leaders.”  I was surprised to learn that developing “opinion leaders” as a  marketing strategy dates back to 1955 and the publication of Personal Influence by Paul Lazarsfeld and Elihu Katz.

At its core, the effort to develop opinion leaders was an attempt to facilitate face-to-face conversations (the “opinion”) about a particular product or service from a highly credible source (the “leader”).  “It is not hard to see why marketers liked this idea,” Elliott writes. “Mass-media advertising can be expensive. What if there were a way to avoid the masses and simply concentrate on the special people.”

Today opinion leaders are still a crucial part of pharmaceutical industry marketing practices (and no doubt countless other industries).  But as we discussed in class on Tuesday, the communications landscape has changed markedly since the publication of Personal Influence in 1955.  And so has the role of the opinion leader.

Today, nearly everyone is an opinion leader, or has the potential to be one.  Because we are so completely inundated with marketing messages (at least 3,000 per day by most estimates), savvy marketing and communication professionals are working to generate face-to-face conversations between their members/supporters/customers and their neighbors, friends, and business colleagues.

Not only do these conversations cut through the clutter, they are far more credible than traditional forms of mass media.  What would influence you to try a new restaurant? A newspaper ad or a personal recommendation from a friend?  And as in 1955, generating those personal conversations is far less expensive than a flashy and eg0-boosting media campaign.

As we wrapped up our conversation in class, we agreed that the future of communications remains largely unknowable (implantable chips that deliver messages into our conscience, one person suggested).  But it seems clear that with the ever-increasing decentralization of media and communications, the power of those “ordinary opinion leaders” will likely continue to grow.

Illustration by Michael Morgenstern for The Chronicle Review

Good Customer Service + Responsiveness = Happy Client

This was me trying to get the Home Depot Manager last Thursday morning.

I know that when I have a client who emails me, I respond. Quickly.

If I have a school board constituent who calls me, I try to get back to them. Promptly.

I don’t always have the answer. In fact, I rarely have the answer right then and there. But I pick up the phone, or I respond to the email, or IM, or text or whatever their communication method of choice is so I can get them what they need. It may not be then, but I will let them know when and on what date I can have the answer for them.

I don’t have to go to every meeting. I don’t have to have everything one hundred percent perfect. But I have to work hard, I have to try to get the correct information clients need quickly and I have to be NICE to people who want to pay me.  It’s pretty basic.

But other vendors whom I have encountered don’t always feel that way.

Whether it’ s the staff at Staples who are always MIA, or the manager at the Home Depot who will not call me back when they install the carpet wrong. I want to yell at them: I HAVE MONEY TO SPEND IN YOUR STORE BECAUSE I NEED SOMETHING. Be nice to me.

AT&T gets it. Apple certainly gets it.  JCrew definitely gets it as do a lot of online stores. What is so hard? This is just good PR, good communications strategy, and a guaranteed way to get people to like you.

Is “in person”customer service just going away, like print magazines, or will it simply differentiate the winners from the losers?

Look for the Secret Gold Box

Do you ever feel like information goes in one ear, and out the other?  How about all the time.  That’s why it’s so important to make messages sticky.  A sticky message stays with people. It helps them more easily remember your company, candidate or cause.

A slogan increases stickiness, so does a good logo.  But they’re not the only way.  In 1977, the Columbia House Record and Tape Club tried something different. They told TV viewers to look for the “Secret Gold Box” in their print ads and direct mail.  Click on the video below to see one of the original commercials.

Although they ran late at night, the commercials were a huge success.  Every Columbia House print ad circulating with the “Secret Gold Box” promos made money, the first time that ever happened.

What’s so special about the Secret Gold Box?  “Tipping Point” author Malcolm Gladwell thinks it’s a small piece of information that serves as a proxy for a larger piece of information (and a smaller piece of information is easier to remember).  The Secret Gold Box was also special and exclusive, and gave “those in the know” something for free. When the mail and magazine ads hit, the Secret Gold Box acted as a trigger.

How are you using sticky messages get your customers’ attention?

Are You a Connector? Daniel Poneman Is!

Last week I got the following message:

“You all don’t have to believe me on this, but I just posted a ridiculous score. I knew I would crack the 100’s, and knew I was a connector, but didn’t realize my true social impact until taking this test… i got a 149.”

In The Tipping Point, Malcolm Gladwell describes how he gave the test 400 times and only 4 people scored above 100. Daniel also has 4,079 Facebook friends (4,080 if he accepts my request).

What’s he do? “I feel blessed to say that I have never held a “real” job in my life and hopefully I never will have to. My job entails watching basketball, talking to people about basketball, providing basketball content for my website, and helping college programs find the best basketball players for them, and helping young men find colleges to play at. It’s a lot of fun.”

Are You a Connector?

Connectors are people specialists, those with a large circle and network of friends. Malcolm Gladwell writes about Connectors in The Tipping Point, his thought-provoking book on how information spreads.

“Identifying Connectors and getting them talking about your cause, company or candidate is critical,” said SparkLight Communications President Joseph LaMountain. “Since they know everyone, they can begin to spread the word and start to generate word-of-mouth conversations.”

Gladwell developed a simple 5-minute test to determine if someone is a Connector. He’s given the test to more than 400 people and scores have ranged from a low of 16 to a high of 108. I scored a 52.  Where do you fall on that scale?

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