Wednesday, April 19, 2006

DuPont's Endorsement of WOMMA's Ethics Code

I just finished the WOMMA-sponsored teleconference on word-of-mouth ethics (recap). I don't know the actual count of how many people participated but there were a lot of *beeps* as people joined the call. The podcast should be available on the WOMMA website in the coming weeks (disclosure: WOMMA Advisory Board member).

I enjoyed hearing my co-panelist, Gary Spangler from DuPont, speak about the latest news in WOM marketing ethics. DuPont is the first Fortune 100 company to fully endorse the WOMMA Ethics Code in all of their marketing and communication practices. Gary talked about his involvement in helping DuPont integrate the Code into his company's policy: he acted as an "internal champion," he helped to create knowledge and educate others about what WOM marketing is and what forms of WOM marketing are unethical, and talked about the importance of getting the key decision-makers involved. Apparently DuPont's existing corporate values were already consistent with the spirit of the Code so there was nothing to prevent them from officially endorsing it. Gary feels that the governance issue regarding ethics rests on the "client side of the equation," meaning that it is incumbent on clients not to work with firms that engage in deceptive deceptive marketing practices.

Andy Sernovitz actually began the call with an overview of ethical issues facing the WOM marketing industry (PDF), followed by Gary, and then me talking about my "To Tell Or Not To Tell?" study on the role of disclosure in organized word-of-mouth marketing programs. One ethical issue that wasn't addressed in the call was the societal effects of word-of-mouth marketing and peer-to-peer influence programs (I only mentioned it as one other ethical concern that has been expressed, in addition to the role of disclosure, and the role of minors).

We all fielded questions from the audience which included: best practices for companies to ensure the agencies they are working with are engaging in ethical practices, whether or not to run a WOM marketing campaign if you know you have an inferior product, and how, if at all, a company should participate in online consumer-to-consumer discussions about its own brand.

Finally, stay tuned for some ethics initiatives coming out from WOMMA in the near future that will help companies ensure their involvement with word-of-mouth marketing programs is consistent with the WOMMA Ethics Code.


Tuesday, April 18, 2006

Free Lunch Teleconference on Word-of-Mouth Marketing Ethics

Who ever said there's no such thing as a free lunch?

On Wednesday, April 19th, at 12 noon, the Word of Mouth Marketing Association will be offering a free seminar on word-of-mouth ethics.

The title of the seminar is "WOM Ethics: A Practical Guide to Doing it Right."

The seminar is free so that as many people as possible can benefit from this important issue. Simply dial 512-225-3050 and then enter passcode 772541#

Andy Sernovitz from WOMMA will be talking about the WOMMA ethics code and principles of ethical WOM. Gary Spangler from DuPont will be talking about the practical, company-wide implementation of the ethics principles behind the code. And then I will be speaking about my research on the role of disclosure in organized word-of-mouth marketing programs. You can learn more at

In the interests of full disclosure, only the teleconference is free. You have to bring your own lunch :-) (and I'm an advisory board member of WOMMA)


Thursday, April 13, 2006

Social Critiques of Peer-to-Peer and WOM Marketing Programs, Take 2: Release of Sales Pitch Society II

In an earlier post I wrote about the various social critiques of peer-to-peer and word-of-mouth marketing efforts. In that post I mentioned a piece written by Kate Kaye called Sales Pitch Society (opens into PDF). In that work Kate was concerned that participants in corporate-sponsored marketing programs were unreflectively becoming "brand vessels" and wondered whether people really believe in the messages they are spreading about brands.

On Monday, Kate released Sales Pitch Society II, an updated version of her analysis. In this latest edition, for which I was interviewed and cited, Kate wants the reader to reflect on how organized word-of-mouth marketing affects our social fabric, relationships, and our own identities as being defined by brands. She argues that people who participate in organized WOMM programs "are condoning the deliberate injection of brands into their conversations. In essence people are facilitating their own exploitation, merely because marketers have asked them to" (p. 38). She cites a number of reasons for this:

empty lives, the desire for belonging, acceptance and insider knowledge, even sheer materialism. (p. 38)
Kate feels that proponets of organized WOMM programs are being seduced by their own rhetoric, drawing a comparison to Orwellian newspeak:
Could it be that WOM marketers have been spewing this Orwellian newspeak for so long, even they’'ve fallen prey to it? This time, the doublethink slogans are not “War Is Peace, Freedom Is Slavery, Ignorance Is Strength.” They'’re more along the lines of: Evangelism is Empowerment, Loyalty is Control, Influence is Altruism
Kate further expands her critique into the world of consumer generated media, arguing that the digital amplification of WOM in the form of CGM may lead us to forsake our human "in-the-flesh" relationships. She writes "Consumer attitudes are shifting, WOM is becoming institutionalized, and CGM is proliferating. At the intersection of these phenomena is digital communication" (p. 38).

Before I continue I should note that Kate adds a disclaimer about her critique:
Please note: This is by no means an anti-capitalist or anti-advertising manifesto. In fact, it comes from the heart and mind of a spirited proponent of free market capitalism. Neither is this an effort to denigrate the individuals who work in the WOM industry. This is merely an attempt to spur further dialogue regarding the ethical and societal implications of engineered WOM marketing campaigns.
I find Kate's work to be thought-provoking on this topic, and I have found her to be very receptive to feedback, though I do disagree with her on a number of points. Here are a few points where we I think we overlap in our views and some points where we diverge (this is not an exhaustive list)...

Areas of Convergence

- I agree that many in our society define our identities too much by the brands we consume. (p. 26)

- I believe we should be reflective about our participation in marketing initiatives, just as we should reflect on and critically interrogate how we spend our time and energy on a range of activities in which we engage. (p. 5)

- I like her interrogation of languaged used by those in the industry (the communication scholar in me!). As an example, I feel similarly that we should interrogate the term "citizen marketer" because it seems to conflate the process of being a citizen in a democratic society (and all the attendant responsibilities of political participation that is required of citizens) with being a consumer in a marketplace. (p. 33)

- I think it's essential that we create a space to discuss the issues that Kate raises in her analysis about the societal and ethical effects of brands and in our lives and the marketing methods used to promote those brands.

Areas of Divergence

- I'm sensitive to, but ultimately resist, the argument that people are "facilitating their own exploitation" by participating in organized WOMM programs. This seems to reproduce a kind of "false consciousness" argument where the critic defines somebody else's reality for them. Kate's suggestion that the motives for participating in organized WOMM programs -- empty lives, desire for belonging, acceptance and insider knowledge, and sheer materialism -- could all be valid. But I wonder if the critique is somewhat reductionist by only, or at least primarily, looking at their participation in the WOMM program; this is likely just one aspect of their multi-faceted lives.

- I wish her critique more evenly incorporated a broader slice of word-of-mouth marketing business models because it may not do justice to the full range and types of perspectives in the field. Although she does spread some of the critique around to more "organic" WOMM programs and even the monitoring of online buzz, a large part of her critique is based on "amplified" programs offered by firms that have a network of members, such as BzzAgent or Tremor, or companies like M80 or Ammo Marketing (companies specifically mentioned). The BzzAgent model receives a good deal of attention and critique (and interestingly there are some in the WOMM industry who have made similar critiques of BzzAgent's business model, just as Kate does). And BzzAgent has always been a "lightning rod" in attracting praise and criticism. Ironically, some of this attention may be because of their level of disclosure and openness about what they do (for example, Kate uses some of the information provided on their blog and website as resources to critique their model). Further they are also a firm that has opened up their model to academic inquiry through their collaborations with universities such as Harvard, Yale, and Northeastern (obvious disclosure here), just to name a few; and since the findings from such studies are part of academic projects whose non-proprietary results are publicly disseminated it can cut both ways.

- I'm not sure what to make of the direction that Kate moves into towards the end of her piece where she implicates the new(er) forms of digital media that faciliate and amplify WOM on a broader scale. She writes that "In some ways, the digital communication we praise for its potential to bring us closer together sometimes actually divides us. It'’s as though some of us have allowed the media we use to transfer our thoughts and enable our discussions to build their own barriers" (pp. 38-39). I agree that technology both enables and constrains, but I think this point could be, and has been, discussed separately from the rest of her argument. That is, there's nothing inherent in the technology that leads us to engage more in brand-related conversations or "communication commodification." And though it's important to consider the role of 'social media' technologies anytime you talk about WOM and CGM I think this is the part of her argument that could be developed the most.

But because her writing style and arguments are often provocative I would encourage people to read Sales Pitch Society II. I plan on having my students read it in my class on WOM, Buzz, and Viral Marketing Communication that I'm teaching this summer, and which she happens to mention in the piece.

I would especially recommend that people who have participated in organized WOMM programs read SPSII and respond with your feedback (to this post or to Kate's site). I'd be fascinated to learn the diversity of responses to it.


Tuesday, April 11, 2006

Interview with Paula Courtney about the Methdolology on the Retail Customer Dissatisfaction Study

A couple months ago the Verde Group and the Wharton b-school released a report about how negative word-of-mouth spreads after a dissatisfying shopping experience. I won't summarize the report here since there are already a number of good summaries out there...

Press Release on Study from Verde Group
Church of the Customer Blog Post about study
Customer World Blog Post about study

... but I was especially interested in the study because I'm studying pass-along, or relay, rates among consumers in a variety of contexts, and especially for word-of-mouth marketing programs. So I contacted Paula Courtney, President of the Verde Group, to inquire further about the methodology they used as it relates to my research. Below are the questions I asked her over the phone and my notes from her responses:

1) How was loyalty measured in the study? Was it solely a behavioral measure (such as intent to repurchase? likelihood to tell others, etc.?) or was there also an attidudinal or cognitive measure as well?

Loyalty was solely a behavioral measure based on the following questions: a) willingness to recommend company, b) willingness to recommend product to others, and c) intent to re-purchase over the next year.

2) You were able to assess pass-along rates -- how many people a dissatisfied customer told -- for one generation (dissatisfed customer to their first generation conversational partner). Was there any attempt to determine how many people the first generation conversational partner told?

They didn't look at this in this study (it was only a 9 minute questionnaire) and haven't done multi-generation pass-along studies. But Paula thinks that the number of others told is tiny. She suggests that the reasons people pass-along negative WOM is to get a sense of justification and/or to get a bit of revenge. By sharing the negative story it makes the experience real and factual. Further, it invites sympathy and empathy that was otherwise lacking in the original experience with the company. We're looking for a sense of equilibrium, to close the gap, between our dissatisfied state and our normal state (echoes of cognitive dissonance theory here).

We then discussed the following hypothesis: the less sympathy we get from the first person the more likely we are to tell another one. This would be a fascinating hypothesis to test and suggests that the type of response we get from our friends might moderate how many people we tell about the negative experience. [There's a funny implication of this if it turns out to be true: companies with crappy products and customer service should train the general population to be more empathetic listeners so the negative WOM doesn't spread as far; of course, the company could put that money into making a better product or service but that would just be plain silly!].

3) One finding was that people were 5x more likely to tell their friends rather than the company. Were you able to determine why this was the case (such as too much effort to contact the company? didn't feel like contacting the company would do any good? etc.).

Paula gave five reasons why people don't contact the company: a) not worth their time; b) tried before but had negative experience; c) don't know who or where to contact; d) thought it might negatively affect future service; 5) didn't think it would do any good. She suggested that about 10% of the people who have a negative experience actually contact the retail store (20-30% in consumer sector).

4) Another finding was that friends or colleagues were most likely to hear about a shopper's inability to find an item due to product clutter in stores. I'm interested in the relational types or categories that were included. What were the other categories? Strangers? Acquaintances? Family members? Etc. In my research I use 7 different categories: stranger, acquaintance, friends, best friends, romantic partner/spouse, relative, and co-worker. I'm curious to see how much overlap there might be in our respective category systems.

They didn't measure other relationship types. Their question was worded more generally as how many people outside the company they told and friends and colleagues were just given as examples. We also wondered how significant relationship type was here. For example, do you just tell the first person you come in contact with shortly after experiencing the problem? Or are you more likely to tell a friend versus a spouse versus an acquaintance? I think she felt that a person would just tell the first person they came into contact with, and my feeling is that you would tell someone with whom you have a relational history where talking about such experiences is common.

5) Were there any findings about how many people a customer told who ended up contacting a company and had a satisfying or dissatisfying experience with the company's complaint handling department? I ask because I wanted to see how the findings compared to TARP's study with Coca Cola's consumer affairs department from the early 1980s.

Paula was well aware of the TARP study but the focus of their recent study did not deal with the complaint handling department specifically. Understandably, this would have been a different study to find out that information.
In summary, I think the two most interesting points to come out of our conversation were the social and relationship aspects of sharing dissatisfying experiences.

First, people pass-along negative WOM to get a sense of justification and/or to get a bit of revenge. By sharing the negative story with another it makes the experience real and factual. Further, it invites sympathy and empathy that was otherwise lacking in the original experience with the company.

Second, could it be that our likelihood to pass-along negative WOM to more than one person depends on the level of empathy that we receive from the first person we told?

Thanks for your time Paula!


Monday, April 10, 2006

Having A Little Fun: Most Innovative Entries On My Download Registration Page

A couple of months ago I added a registration page to help track who was downloading my academic manuscripts, research reports, and surveys related to word-of-mouth marketing communication.

On the registration page I ask people for their name, institution, and e-mail address. Everytime somebody registers I get an e-mail with this information. Interestingly, my busiest days yet were January 19th and January 20th, 2006, which corresponded with the release of my "To Tell Or Not To Tell?" report on the role of disclosure in organized word-of-mouth marketing programs (over 200 registrations on those two days alone!).

In an attempt to respect people's legitimate concerns for privacy, and realizing that some people might feel "put off" by the idea of having to register, I made it clear that people didn't have to enter their real name and could blatantly make up information (as if they needed my permission!).

A lot of people just started entering "asdf" since that's one of the easier key combinations on a QWERTY keyboard. This was fine, but I got a bit bored by these, so I invited people to surprise me and make up some creative entries. I promised I would post the most innovative ones.

The response has been wonderful and I've pasted in my Top 10 below and even included some "honorable mentions." Feel free to comment and say if you would rank them different.

Name: fdsa
(ha ha ha, not very clever, but we'll give you the 10 spot.)

Name: Last minute assignment material
Institution: mental

Name: Donald Duck
Instutition: Duck and Roll

Name: I love Boston
Institution: Mass Art

Institution: University of Nothing

Name: Col. Mustard
Institution: Clue Research

Name: WMD
Institution: Liars Inc.

Name: MeTalks
Institution: YouListens

Name: Josephina Blow
Institution: Bubble Gum Heiress

Name: Average
Institution: LikeTheOthers

Honorable Mentions:

Name: Malcalypse the Elder
Institution: Discordian Society

Name: Buster, Keaton (not Dolly)
Institution: Bound for Trains
E-mail: the@general.nnw

Name: SpamFighter

Name: TBell
Institution: AlwaysLand

Name: Mickey
Institution: Walt Disney
Obviously I don't know who you are but thanks to everyone for having a little fun! :-)

Saturday, April 01, 2006

Glossing Over Word-of-Mouth Measurement & Metrics?

I recently received an e-mail from Marianne Spain, a student at Franklin University, about my recent presentation on word-of-mouth and consumer-generated media. She felt that my presentation glossed over the measurement piece of word-of-mouth marketing and wanted to know if I could provide her with additional information. Below is her e-mail andmy reply:

Dr. Carl

I found your presentation at while doing research for a paper at Franklin University. This topic intrigues me and your insights are spot-on. I'm enjoying learning all I can about this topic and you and WOMMA are great sources of information.

If you don't mind, I have a question. You indicate that the key challenges to implementing a CGM/WOM campaign are "Ethics & Societal Effects and Credible Metrics." You thoroughly explain the ethical aspects and fully discuss disclosure, but the presentation glosses over the measurement piece. Other than stating that it's difficult to put the metrics in place, do you have any other data about measures? Most marketers won't support a program that can't prove it's worth and my paper really needs that anchor!

I would appreciate any information you can impart. I eagerly look forward to your reply.


Marianne Spain
--- --- --- ---
Hi Marianne,

Thanks for your interest in my research. I discussed a little more of the measurement piece in my actual talk but it didn't make it into the slides (and plus I ran out of time towards the end). There are a number of different outcome metrics that companies are using, and many are based on the WOMMA Terminology Framework (disclosure: advisory board member). The metrics used depend a lot on what type of WOM programs you are talking about. For example, if you take an influencer and product seeding program that tries to get a product into the hands of specially screened people there are some commonly used metrics: purchase behavior, inquiry rates (when people go to a website, for example, to learn more information), and pass-along rates (how many people are told). Attitudes towards the brand can also be tracked, brand awareness, and likelihood to recommend are other common ones too. Matchstick describes how they track performance for their influencer and product seeding programs using the Terminology Framework.

The Net Promoter Scale/Score, which is a measure of likelihood to recommend a brand to a friend, is increasingly being used by a number of companies (WOM marketing firms and otherwise). For how WOM marketing firms are using this metric I suggest that you visit BzzAgent's blog to see how they are using the NPS for their campaign tracking in a pre-test, post-test design (what was the likelihood to recommend before the campaign and what was the likelihood to recommend after the campaign). Bazaarvoice is another company using the NPS too. The NPS has been correleated with revenue growth, both in the US and UK (some critiques of this research: 1, 2).

Ways of measuring ROI include control/test groups. BzzAgent has a white paper that tracks different markets in order to determine ROI (for example, City A that has the WOM program and City B that doesn't have it; if sales are higher in City A, and all other things are equal, then this is taken as a sign that the WOM program was effective). However this control/test group design has been critiqued by George Silverman since if it's a really successful WOM program the control group might get "contaminated" by the buzz from the test group.

Brains on Fire helped organize a grassroots marketing program where they were empowering kids in an effort to curb teen smoking, so the ROI outcome metric here was teen smoking rates in South Carolina (Rage Against the Haze program).

You could also monitor online chatter or buzz using various companies' tools (Cymfony, Nielsen BuzzMetrics, etc.) to see if there are increased levels of conversations, the polarity (positive or negative) of the conversations, who is making the comments, etc. The Keller Fay Group is tracking offline and non-publicly available online conversations on a nationwide basis with their Talk Track methodology (disclosure: consulting relationship).

There are more metrics and ways to measure WOM as well but I hope this provides a little more information for you. WOMMA also has put out a book called "Measuring Word-of-Mouth, Volume 1" that has a lot of interesting case studies. The WOMMA Research & Metrics Council will soon be putting out a call for Volume 2 (disclosure: co-chair of this council) and for its next metrics conference.