Sunday, April 29, 2007

Interview with Publicity Club of New England

A few weeks ago, myself, Dave Balter (BzzAgent), Lois Kelly (Foghound), and Jim Nail (Cymfony) participated on a panel about word of mouth, buzz, and viral marketing for the Publicity Club of New England (moderated by Laura Tomasetti of 360 Public Relations). As a follow-up to that panel I was interviewed for their newsletter, the Bellringer, by Lindsay Flaherty of Solomon McCown & Company, Inc.

Here's the link to the article in their newsletter. Due to space constraints Lindsay had to shorten some of my responses so I've included my full responses below:

How has WOM marketing changed the way we communicate?

It's probably easiest to start with a definition of WOM marketing as communication about organizations, brands, products, and services shared between consumers. So, I assume by "we" you are referring not to consumers but to companies. I think many smaller businesses have known about WOM marketing for a very long time because that is what they have had to rely on almost exclusively. I think some larger companies have changed the most because they have created distance between themselves and their customers and have relied on advertising to do the communication work for them, and have not prioritized listening and feedback. So I think companies who have lost sight of the importance of paying attention to their customers or clients (or other stakeholders) will have to change the most. Many of them have moved from being "oblivious" about WOM to paying some attention to it, perhaps by "monitoring" WOM. The smarter companies are the ones who will see that they need to do more than just be aware of the WOM about their products and services and monitor it, but that they need to actively listen to it, be responsive, and proactively seek to engage their customers in dialogue about the company's offerings. But if by "we" you meant consumers then I think we feel more powerful (whether we really are or not is a matter of debate) because we can amplify our opinions and thoughts due to various communication technologies (but don't give all the credit to the technologies because our communication practices are all still motivated by our desire to be recognized by others and have them confirm our view of the world and our place in it).

How did you come to be interested in WOM marketing and build your career in that area?

I started with an interest in how people talk, carry on conversations, and establish, maintain, and sometimes destroy, our personal identities and relationships. I began to notice that brand-related topics came up very frequently in people's everyday, mundane conversations, or chit chat. So I wanted to understand this form of "everyday" WOM. I then learned about companies who were seeking to actively organize and harness consumer WOM. One such company was BzzAgent, based here in Boston, and I wanted to see how this more "institutional" or organized form of WOM compared to the everyday WOM that seemed to happen randomly and without direct or conscious intervention from companies. Through comparing these two broad kinds of WOM I wanted to see what principles organizations could learn to leverage the power of WOM to the mutual benefit of companies and their stakeholders. I then became involved with the Word of Mouth Marketing Association and have conducted a number of studies in the area, publishing both academic articles and industry white papers.

How do you think the WOM marketing field is going to grow from here?

I think more companies are going to move through the phases of being oblivious, to monitoring, to listening, and to a stage I call "joining in" (playing the role of an interesting conversational partner). I see more firms seeking to tie key performance indicators to customer WOM. I see them attempting to engage their "ambassadors" or "evangelists" when they realize what these customers can do for the organization. Unfortunately I predict the majority of firms will screw up the opportunity they have now by not really wanting to invest the resources in making better products and services that meet their customers needs, not really listening to customer feedback, and doing silly stunts to try and generate short-term buzz as a replacement for long-term advocacy.

What is a typical day like for you?

I wake up, stretch, listen to NPR, take the T into my office at Northeastern, read some blog entries from others in the WOM industry or trade publications, respond to student emails, teach class, have office hours with students (though more and more this is done via e-mail exchanges), work on some research projects, more e-mail, more research, take care of some service responsibilities for my academic department, and head back home.

What are two ways that we could all communicate better?

How about three? Mindfulness, dual perspective, and balancing creativity and constraint. These are three principles of human communication. Mindfulness is about being more aware and being centered in the present moment (very Zen). Accomplishing dual perspective is taking the other person's perspective and then your own. And balancing creativity and constraint is a principle of both human and organizational communication. Individuals and groups are in continuous tension between balancing needs for control with creative expression. Understanding the need for both of these to co-exist and dance together at each moment is how individuals and organizations can become successful. Kind of abstract but in class I illustrate it with concrete examples :-)

What do you teach your students about communication that everyone should know?

When designing initiatives to leverage WOM, focus on relational networks of people rather than individuals or demographics. Demographics don't communicate and individuals only communicate in the context of their social and relationship networks.

Identify "structural holes" in organizational networks. These are places where there is no channel of communication between two people or two groups. Understand why these exist and what you can do to facilitate communication across these holes.

Act in ways that are relevant to others. Provide people with opportunities that make them look good in the eyes of others. These are two tips for generating exponential WOM communication.

What is your greatest achievement?

Professionally speaking, I was very proud when I completed my dissertation, or maybe I confused pride with just relief. Either way if felt good to finish it :-) Otherwise I consider it a great achievement everytime I remember to trust my instincts and follow my passions, because I think people often forget to do the former and never fully realize the latter.

Is there something in your career that you would change?

Having to grade. I love giving students feedback but I hate grading.

What is the WOM Marketing Association and who should be/can be a member of it?

WOMMA is an industry association dedicated to advancing the field of WOM in its many forms. I think anyone who wants to learn more about WOM and be around interesting, passionate people who love to do the same should join. Plus, you'll look smart to your boss. :-)

Give me a three sentence description of your latest research on word-of-mouth marketing.

Let me tell you about three different projects, each in one sentence: I am refining a methodology that measures the conversational reach and outcomes of marketing initiatives designed to generate "talk value." I am also working with a colleague on measuring the value of customer WOM to the firm. And I am studying conversational trajectories of WOM episodes (that is, how people sequentially and inferentially move in and out of brand-related topics in the course of their everyday conversations).

How are universities teaching about WOM marketing today?

By saying that WOM is the most powerful form of marketing there is, and then devoting less than half a percent of the time talking about it. I actually calculated this one day to win a bet. My colleague though it was 1% of the time and I wagered that it was actually less. I took the most popular marketing textbook, counted the number of pages devoted to WOM and then divided by the number of total pages. But not every university is like this as there are some notable exceptions, such as Robert French at Auburn University who is doing some very neat things with WOM and social media. And there is more attention to WOM research now at the graduate level (see the WOMMA Academic Advisory Board members). I get about an inquiry a week from international students who want to study WOM so I think they're on top of it more than the US students. When I presented in Turkey last month there were two doctoral students who drove 7 hours to Istanbul to attend the first WOM marketing conference in that country.

Thanks for the opportunity to share my thoughts Lindsay!


Monday, April 16, 2007

WOM Marketing for Higher Education and Studying Overseas -- Call for Resources

Another request for resources, this time from a postgraduate student at Edith Cowan University in Perth, Australia. She is doing her thesis about WOM as a factor in persuading students to study overseas (specifically, for higher education).

If anyone knows of any research or information regarding this topic please include them in the comments or let me know and I'll put you in contact with the student!

By the way, folks interested in WOM, Social Media, and Higher Education should check out the HigherEdBlogCon website.



WOM Marketing for Visual and Performing Arts -- Call for Resources

If you're reading this and you know about examples of WOM marketing initiatives for the visual and performing arts please let me know.

I've been contacted by a graduate student at the Wisconsin School of Business, UW-Madison, Jennifer Post Tyler. She is with the Bolz Center for Arts Administration and is doing research on WOM marketing and the arts. She is especially interested in case study data for nonprofit or governmental arts organizations who have implemented programs to understand and harness WOM.

We've discussed a few resources, but if you know of any in this area please reply as a comment to this post or contact me via e-mail and I can put you in touch with Jennifer.

By the way, there is also a student at Lumsa University in Italy who is working on WOM initiatives with museums, so if you're also studying in this area I can make introductions so everyone can collaborate and share resources.

Thanks for your help!


Tuesday, April 10, 2007

What's The Score -- More Coverage of NPS in UK-Based Research.

I was interviewed some time ago for an interesting article about the Net Promoter Score that appears in the March 2007 edition of Research, a UK-based trade publication serving the market research industry. The thrust of the article is that NPS is becoming an industry-standard in many companies but its academic grounding is hotly contested.

There's a neat timeline of events on page 36, which I'll summarize as follows (since I have commented on a number of these before I'll include links to my blog posts where the events intersect):

2003 -- Fred Reichheld's "One Number You Need To Grow" article in Harvard Business Review was published (hadn't started my blog yet!)

2004 -- Researchers Neil Morgan and Ron Rego offer early criticisms of NPS in a letter to the editor (this wasn't mentioned in the Research article but it should have been; I summarized their critiques here)

2005 -- Study by Paul Marsden and others at the London School of Economics (LSE) reporting results that seem to validate NPS as predictor of growth

2006 -- Reichheld's best-selling book The Ultimate Question was published in March.

Study by Alain Samson at LSE introduced the Net Advocacy Score arguing researchers need to better account for negative WOM and actual behavior (not just intentions). Robert East from Kingston University has also offered developments about actual WOM behavior rather than just intentions (details to come about that)

Interesting article in AdAge about NPS becoming an industry-standard metric (July 2006 -- not mentioned in the Research article). There was also an article done in Business Week in January 2006 about this too.

In September, the Morgan & Rego article in Marketing Science was published arguing NPS had little to no predictive power.

But later Morgan & Rego was criticized, on my blog and in academic publication (Keiningham et al.), for not making an "apples-to-apples comparison"

Riechheld responds to critics on his blog with an entry entitled "NPS does not work" -- the intersting point here is that there is a shift away from the statistical correlation between revenue growth and the NPS and towards linking revenue growth to individual behaviors

Article in Australia's Business Review Weekly cautioning those who adopt NPS to be aware of the limitations of reporting just one number (there have been a number of blog posts offering similar criticisms for a number of years before this). For this and other articles about the Net Promoter you can visit the "What They're Saying" section of Net Promoter site hosted by Satmetrix.

2007 -- Article to be published in Journal of Marketing that criticizes the predictive ability of NPS, but this time making a much better apples-to-apples comparison. There was also an important story published in the Wall Street Journal about this forthcoming article and mentioning other researchers who are seeking to advance the study of the role of word of mouth, loyalty, and the power (or lack thereof) of recommendation intentions and behaviors.

First annual Net Promoter conference held in New York City, sponsored by Satmetrix (one of the companies associated with the development of the Net Promoter metric)

Stay tuned for much more in 2007, on both the academic and industry fronts!
The final thing I'll note about this article is that it does a good job of raising the issue of whether or not the Net Promoter Score is good for the research industry or not. One the pro-side, Paul Marsden is quoted as saying that it allows researchers to have the ear of those high up in the executive food chain and that it "speaks the language" of key decision-makers in companies. On the con-side, there's a sense that executives and clients will get used to simplistic measures and forcing metrics to do what they are not designed to, or can't do.

A further criticism is that it could reduce the credibility of researchers. That is, if a metric doesn't do something its proponents said it could do, then how much faith will key decision-makers have when the next new metric comes along? Will it limit adoption of that new metric?

From my conversations with folks in the industry and readings, it seems the value of the NPS is not the score itself, but the institutionalization of a customer feedback system across organizational units that people actually pay attention to. To accomplish this it seems you need something that is relatively easy to communicate and that people at various levels have the time and patience to get their heads around. Time will tell if NPS becomes that metric, or part of a package of key performance indicators, for the long-term.

Ultimately, the gold standard for any metric is how well it allows people to make timely and responsive decisions that allow an organization to achieve its goals, and there are many innovative researchers in industry and academia seeking to answer that "ultimate question."

ADDED: Here's a post by Alain Samson about the same article, and his thoughts on the pros and cons of using the Net Promoter Score.


Monday, April 02, 2007

Beyond Buzz: The Next Generation of Word-of-Mouth Marketing

What's all the buzz about? According to Lois Kelly, this isn't the most important question to ask.

Lois has written a new book called Beyond Buzz: The Next Generation of Word-of-Mouth Marketing. In her book she writes that companies need to focus more on making meaning with their customers (or other stakeholders) than in generating buzz.

"Making meaning" can sound awfully abstract but she provides a practical, how-to guide for marketing professionals so they can figure out the best way to navigate this new world of conversational marketing.

We hear a lot these days about how companies need to "get into the conversation" but her book makes this very concrete and tangible, peppered with examples from actual companies who have done so successfully (or not so successfully).

My favorite chapter is "Building a 'talk' Culture" (Chapter 8) which goes into how companies need to rethink how they organize themselves. The table on page 167 "New Functions, New Competencies" is especially interesting. It lists eight functions that are needed to do conversational marketing, what the traditional roles were, and what the new competencies are.

Most of all, she shows how communication and conversations are central to the lifeblood of organizations, and that it's essential to develop the requisite skill sets for people throughout the organization.

Lois is on the Industry Advisory Board of my academic department at Northeastern University and we have worked on a number of projects before, including a study about influencer relationships between commercial real estate developers and key environmental, governmental, and community influencers. I love her energy, passion, and engaging style.

Becuase we worked together before I had a chance to read an early draft of the manuscript and write a blurb for the back cover. Here are the four blurbs I wrote for the book (I couldn't decide which one to use so I asked the editor to choose; she picked the first one):

#1: The Cluetrain Manifesto was a call for corporations to wake up to the global conversations about them, and potentially with them. In Beyond Buzz, Lois Kelly gives corporations the practical tools to answer that call.

#2: Many companies mistakenly think that word-of-mouth marketing is only about creating buzz for a product or service. Lois Kelly shows why this view is too narrow and that what's really needed is meaningful dialogue with customers, employees, shareholders, and community members. If you're struggling to get beyond buzz, and want a step-by-step guide for doing so, then read this book.

#3: Lois Kelly offers a lucid, step-by-step guide for companies to not only survive, but thrive, in a world of conversational marketing.

#4: Lois Kelly gets the point that word-of-mouth marketing is not just about creating buzz for a product or service, but that it's about engaging in meaningful dialogue with customers, employees, shareholders, and community members. Read this book so you can get the point too!
On a side note, I love the cover and it reminds me of my recent trip to Istanbul where I learned about "cumbas" (pronounced djoombas). Cumbas are covered balconies, usually very close in proximity to one another, where people (typically women) would talk and share stories with one another. In short, a cultural venue for word of mouth!

Best wishes with your new book Lois!