Monday, November 28, 2005

WOMMA Basic Training Conference in Orlando


The Word-of-Mouth Marketing Association (WOMMA) will host their next conference -- Word of Mouth Basic Training -- in Orlando, FL, January 19-20, 2006.

I'll be speaking on Day 1. Here's the title and blurb for the panel, along with my fellow panelists:

Measurement 2: Why People Talk: Consumer Behavior and Word of Mouth

Walter Carl, Professor, Northeastern University
Kerry Stranman, Partner, Chief Strategist, MotiveQuest
David Fletcher, MD MediaLab, Mediaedge:cia UK

Learn how consumers interact in a word of mouth world. Discover what gets them talking, why they get active in discussions -- and why they don’t. Learn how to understand their motivations and how to measure them.

You can get a $100 discount by using the following code when you register: "speakerdeal"

Disclosure: I am an Advisory Board member for WOMMA and received an e-mail asking me to mention the conference on my blog, which I am happy to do :-)

Wednesday, November 23, 2005

Rumor, Gossip, and WOM: Response to Jeremy Depauw's Query

Jeremy Depauw posted the following query as a comment on my blog:


Am I correct if I think that WoM could also be risky as a rumors creator?

I'm really interrested in the ways organisations are able to make WoM a force instead of a weakness. I have to admit that during my Communication studies, most of the teachers used to focus on the negative way rumors and legends may interact with an organisation r├ęputation and image.

It's really surprising to see that few information sources about Information Management (my resaerch fiel actually), as KM for example, don't consider WoM as you do. Maybe I'm wrong, but as far as I know (not so far by the way)it does not seem to be a major interest as a positive field of improvement in organisation IM.

I would be glad to have your opinion about that.

Thanks anymway.


Here's my response:
Hi Jeremy,

It might be helpful to differentiate rumour, gossip, and WOM.

I define a rumour as unverified information that is spread within and across informal, or emergent, networks. By emergent I mean those networks that are not prescribed by the organization chart but emerge organically. It sometimes takes a formal network or a formal source to authorize the information as legitimate. However, the grapevine communication is often faster, richer, and accurate, more often than not.

Gossip refers to evaluative, moral talk about an absent other. It tends to categorize others as a certain type of person, belonging to social categories such as jerks, studs, saints, etc.

In my research on WOM marketing, I define WOM as informal, evaluative communication about an organization, brand, product, or service, which may or may not include a recommendation. I further differentiate this between institutional (consciously managed by an organization) and everyday WOM. This obviously shows a bias towards "marketing" or "brand"-related content.

All three can be "risky" to the organization depending on how each is managed.

To the rest of your question, I think there IS a lot of interest for WOM and internal information management.

One of the foundational articles on informal, emergent networks is Keith Davis' article in Harvard Business Review from the 1950s ("Management Communication and the Grapevine"). But there are much more recent examples, such as the work of David Krackhardt (see his co-authored article in HBR from 1993 entitled "Informal Networks: The Company"). You may also be interested in the work of Rob Cross for his 2003 book entitled The Hidden Power of Social Networks: Understanding How Work Really Gets Done in Organizations. You may also want to read the work of Noshir Contractor who also is very active in this space.

Hope that helps!

Walter

Monday, November 14, 2005

How Much Can You Trust Buzz?

Scott Kirsner wrote an article that appeared in today's Boston Globe entitled "How much can you trust buzz?"

The article contributes to the ongoing discussion about social and ethical concerns surrounding buzz marketing and issues of disclosure. (See my previous posts on this: 10/24/2005 Part 1, 10/24/2005 Part 2, 10/25/2005, 10/28/2005, and 11/4/2005).

This article focuses on BzzAgent, and a book ("Grapevine: The New Art of Word-of-Mouth Marketing") recently authored by its founder and president, Dave Balter.

Apparently a number of volunteers affiliated with the agency, or BzzAgents, posted reviews on Amazon's website about the book, most identifying their affiliation with BzzAgent, but a small few who did not. According to the article, BzzAgent was able to determine that 3 of 4 people who didn't identify their affiliations were indeed part of the BzzAgent network. The article states that BzzAgent considers the activity of these agents "unacceptable" and that these Agents will face some type of disciplinary action.

Kirsner, the article's author, contends that since BzzAgent's business model is built on a word-of-mouth network, "it needs to get more serious about disclosure. It's one thing to ask agents to be honest and open, but BzzAgent would avoid more bad publicity, and do well by its clients, if it gave its disclosure policy some teeth -- kicking agents out of the network when they fail to disclose their connection."

It will be interesting to hear BzzAgent's response to this article. Their policies have developed over the years towards increasing disclosure to the point now that disclosure is required of BzzAgents. They also have a disciplinary program in place, which they call Pest Control.

Kirsner's point goes beyond just BzzAgent, however, because it is calling for something that is not layed out explicitly in WOMMA's Code of Ethics. That code requires disclosure of relationship, opinion, and identity, but does not currently provide guidelines for its member companies on disciplinary behaviors.

Stay tuned to see how these issues develop in the coming weeks and months.

By the way, you can read my review of Grapevine that I sent to Dave Balter, and which he posted on the BzzAgent blog back in September. In the interests of disclosure, I am not a BzzAgent, I have collaborated, and am currently collaborating, with BzzAgent on research projects regarding managed word-of-mouth marketing programs (some of the findings from an earlier project are cited in Grapevine), and I am an Advisory Board member of WOMMA.

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Friday, November 11, 2005

What WOM Tells Us About Organizational Decision Making

A reader of my blog recently posted the following comment:

Good morning,

I am a (young)resaercher in the field of Information Management and Mass Media Studies. I have discovered (few days ago)the field of WOM.

My question is: In what way this field could be invovolved in the comprehension of the organisation decision-making process ?

Thank you in advance for your answer.

Regards

Jeremy
Jeremy Depauw | Homepage | 11.10.05 - 2:58 am | #


Here's my response (and I invite others to post how they would respond):

Hi Jeremy,

This is an excellent question. I'll just start a response here and invite others to contribute. You ask about how WOM can help us better understand how organizations make decisions (if I captured what you are asking correctly).

I think one way to answer that question is to think of word-of-mouth as a process of consumer-to-consumer communication (or substitute any appropriate term other than consumer, such as user, stakeholder, citizen, constituent, etc.; I'll use stakeholders). Many stakeholders want to be more involved in the decision-making process of organizations, or at the very least, feel "heard" or "listened to" by the organization. Organizations of all flavors should sieze on the opportunity to be responsive to this desire and involve their stakeholders in decisions that affect the stakeholders (such as product design, policies, etc.) and figure out ways to become partners in these conversations among their stakeholders (blogging could be one example, being responsive to any feedback is another, creating educational resources that stakeholders will find relevant to their lives, etc.).

Thus, the organizational decision-making process would potentially become more open and clear to those outside of the organization (what many call transparency), or even to those internal stakeholders as well (such as employees). In this process I think many organizations are realizing the line between internal and external needs to be blurred to facilitate this communication. For example, employees of an organization can often be the organization's best ambassadors.

This is certainly not a comprehensive answer, but just a starting point.

Thanks for your question and I invite you and others to contribute their thoughts!

Walter

Monday, November 07, 2005

Measuring WOM: Advocacy Drives Growth in UK Companies

Be sure to check out a study conducted by Paul Marsden and colleagues at the London School of Economics (LSE) on how advocacy drives growth in UK companies (PDF download of report). In their study, they replicated the use of the net promoter score for UK companies as a way of predicting revenue growth (the net promoter score is a measure that indicates how likely people are to recommend to others a brand, product, or service in comparison to those who are neutral or would recommend against the brand; a higher score indicates that more people are spreading positive recommendations than negative recommendations).

Here are some points I found interesting (I've also included some additional comments gleaned from an e-mail conversation with Paul about the findings):

1) The research was able to correlate the net promoter score with revenue growth in the UK companies. This represents an important contribution because it increases confidence in the link between WOM and revenue growth, and the utility of the net promoter score to predict growth in a culture outside of the U.S.

2) The average net promoter score for UK companies was much lower than US companies (3% versus 11%). The study didn't go into details to explain the difference, but speculating, the difference might be explained due to cultural differences in terms of WOM communication practices. For example, Paul brought up the example in US political campaigns where those in the US might be more likely to advocate while those in the UK might be more reserved or express more cynicism or criticism.

3) Negative WOM recommendations (e.g., "Don't buy X"; NWOM), on its own, predicted growth but positive WOM recommendations (PWOM) didn't. These findings are consistent with existing research on social influence that would suggest NWOM has more of an impact than PWOM. Though see some contrary evidence regarding positive and negative WOM from Robert East's work (Kingston University).

4) The study contends that WOM drives growth rather than vice versa. This is a little trickier since the study uses correlational data to infer causation, but the article does provide compelling evidence to support its claim. For example, the net promoter score correlated with growth figures in the same year, but growth from the prior year (2002-2003) didn't correlate with the net promoter score for the following year (from 2003-2004). It seems an even stronger case could be made if we had the growth figures from 2004-2005; the goal would be to see if these numbers are correlated with the net promoter score from the prior year (2003-2004).

5) The LSE researchers hope to extend their research into WOM advocacy as predictors of productivty (the "likelihood that employees would recommend working for their company to friends or colleagues") and share growth (the "likelihood that investors would recommend investing in a company to friends or colleagues"). I'm looking forward to learning more!

By the way, Paul is also an Advisory Board member of WOMMA.

Friday, November 04, 2005

Do You Know of Video Clips about WOM, Buzz, and/or Undercover/Stealth Marketing?

I am compiling a list of video clips about WOM, buzz, and/or undercover/stealth marketing to be used for teaching and illustration purposes. Here are two to get the list started:

1. 60 Minutes segment on "Undercover Marketing" (October 2003)

2. "Triumph of the Shill" segment in The Corporation (2003)

3. "The Merchants of Cool" "Under-the-Radar Marketing", Chapter 2 of Frontline video (2002)

NOTE: These three clips obviously focus on the ethically suspect practices of undercover and stealth marketing, but I'm interested in video clips of all different forms of word-of-mouth marketing.

Please add in ones you know of through a comment. Thanks!

Tuesday, November 01, 2005

Psst! How Do You Measure Buzz?

Catharine Taylor of Adweek has written an interesting article on the issue of how to measure word-of-mouth. A subscription is required to read the article though a PDF version can be downloaded at John Moore's Brand Autopsy blog. While you're there be sure to read John's commentary on the article. A key issue he raises is whether we should think of WOM as a marketing method (just another tool in the toolbox) or as part of a larger business practice (by which he means a whole culture that supports engagement with stakeholders, openness and transparency, etc.

A related issue I would have liked to have seen in the Adweek article is not only about measurement but about how to more fully understand WOM. That is, when we hear "measurement" we tend to think of quantitative measures and methods; but equally important is the rich understanding that can be gained from more qualitative approaches such as conversational geography focus groups and relational ethnography (a blend of participant-observation, interviewing, and conversation analysis).