Word of Mouth


Three diverse companies that have had long-term and short-term success with word of mouth marketing are Jones Soda, Sprint/Nextel and Stormhoek Vinyards (a South African winery).   Below is my summary of how they applied word of mouth marketing to grow.  Maybe there are some parallel lessons for your company.

 

 

Jones Soda (their complete story is here) began as a beverage distributor in the late 1980s and by 1996 had established its own unique brand, in an industry full of Coke-and-Pepsi behemoths.  In the words of the founder and CEO Peter van Stolk, “The big guys spill more soda in a day than we sell.”   Jones Soda built their popular brand from the ground up, getting to know their customers (teens and young adults) and selling soda at Xtreme sports events, tattoo parlors and independent music stores. They created passionate fans—even using customers’ own photos on their unique soda bottle labels.  Jones Soda is now available at national retailers such as Panera, Barnes & Noble, and Target and has expanded into a successful online music store, MyJonesMusic.com. And it all started with word-of-mouth, grassroots marketing.

 

 

 

Sprint/Nextel recently launched the Sprint Ambassador program.  The company leveraged the blogosphere by offering a free phone and six months service to about 400 bloggers. The result was 389,000 hits on Google, said David Dickey, Sprint online and interactive advertising manager.  “We have more than dipped our toes in the space now,” he said, according to www.DMNews.com  Sprint experienced the risk of the lack of control that is typical in word-of-mouth marketing.

 

 

Mr. Dickey said that the effort generated both positive and negative feedback on the brand. Sprint’s experience demonstrates that businesses must prepare themselves for anything and define specific success metrics before beginning word of mouth marketing. Word of mouth requires that marketers and business owners keep a close watch on what is said about their brand and how the conversation impacts the specific initiative.  

Stormhoek Vineyards is a South African winery that wanted to increase sales of their wines in England and France. They knew that had to do something to make them stand out in a cluttered market. So last year they turned to Hugh Macleod, a well-known European blogger and artist known for cartoons that are drawn on the back of business cards.

Macleod set up a program where he offered a free bottle of Stormhoek wine to the first 100 bloggers each in England and France who contacted him. In order to receive a free bottle the bloggers had to be of legal drinking age, been actively blogging for at least three months and live in either England or France. They were not required to talk about the wine.

What happened was that they did, indeed, talk about the wine and as a result created enormous buzz in the industry. All the talk stimulated sales and the result was that Stormhoek doubled its sales within a year. They have embraced blogging and WOM. If you follow the link to their site you’ll see that it is not a traditional web site but in blog format. Total cost, $400 of blogging software and whatever they paid Macleod. We are sure it was significantly less than the ad budgets ofNapa
Valley vintners who attempt to grow market share.
  

Here is a blog post   from a U.K. blogger talking about Stormhoek’s rapid, international growth stimulated in large part from their use of blogs & established bloggers.    

Lessons learned:

1. Use blogging to reach your market and grow your business.

2. Reach out (respectfully) to bloggers with good followings in your target market.  Make a create offer to get them engaged with your products or service.

3. Take action based on the feedback from the blogosphere.  It is gold.   It is some of the most cost-effective market research you will ever obtain.

                                                   

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Michael Stelzner, of WritingWhitePapers.com blog, gave us some interesting food for thought regarding my post on How To Write A White Paper in 25 Minutes.  View Michael’s comments here.

So, Michael believes that White Paper Podcasts are a potential, but not here yet.  And he cites recent well-documented research.  I suggest, to businesses selling to other businesses—especially small/growing companies, why wait? 

From the perspective of Geoffrey Moore’s longstanding technology adoption curve, Podcasting is easily out of the innovation stage.  And it’s most likely more than half way through the early adopters’ stage.   ‘Barriers to entry’ are low:  iPods or other MP3 players are not necessary in order to listen to a Podcast (despite the name).  Podcasts are played easily on any computer with a sound card.

I’m not advocating that recording white papers as audio casts or Podcasts will replace all white papers.  Highly technical white papers focused on selling to engineers and requiring detailed schematics to make the case, will continue to be paper-documents.   I’m suggesting that with a new product or release, along with all of the other marketing content—technical sheets, capabilities brochures, etc.—you add in a 20-25 minute audio recording with the design team.  It’s an informal conversation with you team. 

A Podcast reveals the actual ‘voice’ and passion behind the product.  Prospects will think to themselves, “Hey—this is not just a widget or piece of software. There are authentic, real folks at this company who believe passionately in what there’re doing.”  You could also add a beta customer to the conversation, making the Podcast communication a word of mouth tool as well.

Why wait for your competitors to be the first to Podcast white papers in your industry?

My anecdotal findings:

  • Based on discussions with technology entrepreneurs and C-Suite members of startups is that they listen to business Podcasts or audio casts while commuting, working out, or during other ‘dead’ times (plane trips) —they’re not just listening to music on those iPods/MP3 players.   Additionally, they also listen at their desks, on their computers, as background while working.
  • Podcasts are showing up even in more traditional industries—Instrumentation & Automation for example.   ControlGlobal.com, the online version of Control Magazine, now includes a Podcast Library. 

MarketingSherpa’s new Business Technology Marketing: Practical Benchmark Data for 2006 report includes fresh insights on the Podcast topic–among tons of other useful updated findings.  (A free overview of report in a PowerPoint is here)

As part of the study, they asked approximately 650 technology and services buyers what most influenced a purchase made in the last year that they were actually a part of.  Now admittedly, Podcasts scored the lowest 2.7 percent—but they are on the radar screen.

As a side note on MarketingSherpa’s Technology Marketing: Practical Benchmark Data for 2006 —word of mouth scored as the highest influence to a tech or service purchase—48 percent.  And when you add in other word of mouth-oriented influences (blogs) the word of mouth influences are pretty high:

vendor blogs: 4.6 %

technology professional’s blogs: 19.6%

industry bulletin boards: 19.6%

(The numbers exceed 100 percent because interviewees were asked to list all of the influences on a recent technology, services purchase.)

Source: MarketingSherpa’s Technology Marketing: Practical Benchmark Data for 2006

What does it all amount to? Giving your small company, a big image.

Tom Peters, a legendary business speaker/author since his watershed books of the 1980s, i.e., In Search of Excellence and tons of others. 

If you’ve ever heard Tom Peters speak in person, you know how unlike the other 99.99% of speakers he is. I had the luxury of hearing him in the early 1990s—he was light years ahead when it comes to down-to-earth approaches and plain talk to get his elegant, insightful, visionary business and leadership ideas across.   Okay, I admit it. I am a devoted Tom Peters fan.

So, am I thrilled that I found this at a recent post of his blog, Tom Peters Weblog? Yes!  He posted the slides from his presentation at the National Enterprise Innovation Conference B2B/London/27June 2006 

Now he does not actually call it word of mouth, but tell me if you don’t agree that in fact that’s what he’s saying…

Tom Peters slides in (very small) part say:

This is not about … “customer centrism”
“integrated marketing”
etc
etc
etc

It is about …sellin’ a whole lotta stuff and
having customers go berserk with 
love  to the point that they
tell every damn friend they have
and then start buttonholing strangers on trains and planes and busses.

By the way, he creates the most unusual PowerPoint slides anywhere. Be sure to download them and tell me what you think. 

Now all we have to do is uncover ways to make our customers “go beserk with love….”

So, what is word of mouth marketing?   One way to think of WOM as good old basic, “referral programs” or “user groups”—on steroids.  Referral programs used to consist of asking business partners, customers, networking buddies, and friends to suggest people that might need your products or services.  Or you offered customers rewards for sending their friends to you for a “free quote”.

Or, if you were a big company (big budget) you brought your loyal customers together in Orlando or Los Angeles (notice the warm climate locales) for user group meetings—seminars, best practice-sharing—and of course, building loyalty to your company’s products/services. 

Fast-forward.  Today’s WOM is much more authentic.  Today it’s about people talking because they want to share their positive experiences with your products/services with their friends and colleagues.  Building successful WOM requires:

  • Giving your loyal fans (customers) something to talk about—great products, services
  • Making it easy for you loyal customers to tell others about your company
  • Identifying who are the “influentials” among your loyal customers and turning them into customer evangelists.  They are gold.  Evangelists are your unpaid sales force. 

Note:  For more about identifying and leveraging influentials to grow your business, see book by Ed Keller and Jon Berry, The Influentials, One American in ten tells the other nine how to vote, where to eat, and what to buy. 

We all love to recommend the best books, restaurants, vacation spots, etc. to our friends, family and coworkers.  Who do you know that relies on advertising (alone) to select vacations or mission-critical business tools? 

Another way to think of WOM marketing is as “relationship marketing”.  Relationship marketing is creating deeper relationships with your customers and developing products and services to meet their needs, based on your findings from the deep relationships. If you’re reading this blog, you’re probably a small business. And you most likely sell to small businesses and you’ll be interested to know that according to a Warrillow & Co research study on how small business owners (fewer than 100 employees) make buying decisions.

  • Small business owners bypass advertising and go directly to other small business owners for advice. 
  • Popular blogs and networking sites like Linkedin are increasingly how small biz owners find out about new products and services.

And with the explosion of traditional one-way, monologue marketing—ads, direct mail, email spam, Internet popups,  (we’re bombarded with up to 3,000 ads daily by many estimates) businesses need a more authentic way to (pardon this over-used cliché) ‘cut through the clutter’ and get their company story heard.  WOM will help you to get the message out.

Experienced, successful WOM proponents talk about the holy grail of WOM programs that work:

  • Getting loyal customers to talk to others about how much they like your products and services (Costco)
  • Creating remarkable products and services, so that happy customers want to talk about you
  • Finding your company’s story—and telling it over and over (Clif Bar)
  • For start-ups especially, turning your company identity (brand) over to your customers—let them define the brand (like the story of Jones Soda), start grassroots conversations about you, and then watch sales soar

Surprised to see Costco on the list?  Well, they spend zero on advertising.  But they have plenty of loyal customers who love to talk about shopping at Costco. Like Oprah Winfrey. Why Should Businesses Care About WOM? New research from GfK Roper Consulting reinforces why word of mouth marketing could be the key to turbo charging leads, sales and revenue for small (all) companies.  Here are the results of their recent study asking 1,000 Americans what are the most “trustworthy” sources for purchase ideas and information:

  • 81% cite people as a trusted source of information
  •  56% cite editorial content 

  •  advertising identified by 55%

  •  online identified by 24%

Business Technology Buyers

I actually disagree with the advertising result for B2B buyers.   I think the 55 percent citing advertising is too high, if you consider who businesses rely on for purchase ideas and information. (This study did not focus on business to business.)

  • The Chief Marketing Officers organization (CMO Council) in a 2005 survey of B2B buyers, Define What’s Valued Online, found that 75 percent of technology buyers begin the purchase process on the Internet—using white papers from industry associations and vendors.  
  • Fifty percent said they spend up to 5 hours a week researching tech products and services online.
  • Ninety percent of those surveyed said that online content has a moderate to major impact on which vendors they choose.  

So much for advertising impacting B2B decisions. These examples are all good places to start. We’ll explore how WOM actually happens in future posts.  If you have comments about how WOM is working for your company, I’d love to hear them.  Or, what else do you think you need to know before you get started?

Just back from WOMMA (Word of Mouth Marketing Assn.) Conference June 20-21, San Francisco

What do you do when 5 of your favorite speakers/authors/bloggers—whose books you love are all on the same conference program? 

  • Jackie Huba, customer evangelist guru, Church of the Customer blog
  • I’m now midway through THE book on why companies can’t afford not to blog by Shel Israel and Robert Scoble, Naked Conversations, How Blogs Are Changing the Way Businesses Talk with Customers.
  • Debbie Weil is the corporate blogging expert, and has a new book, The Corporate Blogging Book
  • The definitive book on WOM and generating buzz is by Emanual Rosen, The Anatomy of Buzz.  Rosen writes takes a text book approach but makes it engaging and gives you lots of examples.

So, when the WOMMA Conference notice popped up, I was thrilled.  I rushed online to good old Southwest Airlines for the cheapest ticket to San Francisco.

The rock-star-moment of WOMMA was the presentation on Wednesday by Shel Israel and Robert Scoble (authors of new book Naked Conversations) spoke.  Robert Scoble, legendary Microsoft blogger (and Microsoft employee for a few days more) is in the top 10 most popular bloggers on the planet. 

Shel Israel is a recovering public relations guy with a long history in
Silicon Valley.  He also invented very cool software, was bought out by big company and worked with lots of startups.

7-21-06 Correction:  My apologies to Shel Israel, and readers.  I mispoke about Israel’s background and another item that as a team, they did not actually accomplish–as he very kindly commented today.
So here is a clarification of his (highly summarized) actual bio:  Shel Israel played a key strategic role in introducing some of technology’s most successful products including PowerPoint, Filemaker, and Sun Microsystems workstations.  He’s been an expert on innovation for more than 20 years.  –From the book jacket of Naked Conversations.

My second inaccuracy to correct is regarding the origination of the term the ‘death of distance’. See clarification below:

Scoble and Israel dropped some new buzz words: Scoble coined the ‘death of distance’ 7-21-06 Clarification:

Scoble cited the Death of Distance when discussing being interviewed by the guy from India. But, in fact, The Death of Distance: How the Communications Revolution is Changing Our Lives is an exquisite book by Frances Cairncross, who, Israel believes works as a reporter for The Economist.  Israel and Scoble believe it is a great work and advise everyone to read it.

Additional note:  Frances Cairncross became Rector of Exeter College (Oxford, U.K.) in October 2004.  Previously she was on the staff of The Economist for 20 years, most recently as management editor.

Some Scoble and Israel thoughts:

  • In the world of companies talking to customers:  Dialogs replace monologues. 
  • Monologues are old marketing. One-way shouting at prospects.  One-way communication.
  • Dialogs are authentic conversations about customer pain, companies’ products/services.
  • They interviewed over 180 people for Naked Conversations.

  • While writing Naked Conversations, they ‘collaborated’ online with other bloggers, who told them who else to talk to. And did fact checking.

  • Conversations are about disagreeing with each other. They included Toby Bloomberg , consultant and marketer, who disagreed with them in the book.
  • Big key for businesses:  What do my customers want?  Blogs will tell you.
  • Blogs are over-the-fence chats. Not tech. Blogs are a reverse-order web site. Google juice. (Google likes lots of links and constant, fresh updates.)

There were lots of other cool presentations.  Jackie Huba–who along with her partner, Ben McConnell–practically invented the category when they wrote, Creating Customer Evangelists, talked about consumer-generated media and how fans and detractors of brands/companies are taking marketing into their own hands. 

Many of these consumer-generated pieces are ‘homemade’ vidoes and are posted on YouTube, Broadcast Yourself.  Like this elegant, 24-second piece done by a 19-year old about Sony–he was just trying to get a job.    Evidently, the Sony executives were surprised that the video was not created by their staff…

Many of the ideas, successes and strategies shared at the conference were used by big companies. I am mulling over ways to translate them for small companies.   

There is one great Small Company, Big Image story I uncovered at the conference.  It’s about a really, really cool consumer product, TheBeerBelly.  The founders put up a microsite for the product in late November.  (It lets you take beer, where maybe you should not…) 

They sent an email about the product to Gizmodo, The Gadget Blog–a powerhouse blog–and got 2 million hits in the next 2 days at thier site, TheBeerBelly.com.  Who says Blogs aren’t changing business? 

One of the founders, Brooks Lambert, was later interviewed on CNN, among others. All because of the huge traffic from Gizmodo. No advertising, no marketing, and they are selling thousands of these great little items.

Will post more shortly on how small companies can use WOMM, Word of Mouth marketing to find new customers.