Supercharging the Path to Purchase: Using Word of Mouth to Drive More Consumers to Buy

Supercharging the Pathto PurchaseUsing Word-of-Mouth to DriveMore Consumers to BuyEd Keller Tony CardinaleCEO EVP, Brand Planning &Keller Fay Group Strategic Insights NBC Universal

Women at NBCUA sales, marketing, and research initiative thatpartners with agencies and advertisers on highROI custom solutionsIts Insights area is charged with deliveringmarketing partners new intel to guide impactfulcampaigns and measure corporate-wide results

What Made This Investigation Valuable 1. Women are WOM drivers 2. Women drive more purchasing in more categories than ever 3. Women are more trusted and influential…but little is known or has been studied about thedynamics of Women’s word-of-mouth in the pathto purchase

Popular AssumptionConsumer as “prospect” Consumer as “marketer” Need Aware of Research & Final Purchase Brandidentified choices narrowing decision $$$ advocate

A New Way of ThinkingWe believed that consumers could act as effectivemarketers for brands even before purchase, andwe wanted to understand how to effect that Purchase prospect Purchase Brand $$$ advocate Pre-purchase marketer

Our Partnership with Keller Fay NBCU had already been using Keller Fays TalkTrack® to help our clients locate Conversation Catalysts™ across many categories We formed a partnership on this custom research to move beyond what we collectively knew about getting women talking at critical marketing moments

What Inspired Us? We Knew…1. Women are “in category” and driving purchasingmore than ever in key general market areasWomen 18+ who say they do the following: 2000 2009 ChangeNegotiating to buy a car 86% 97% +11ptsPlanning for retirement 80% 94% +14Buying a computer 68% 95% +27Buying or selling stocks to make money 63% 83% +20Dealing with a repair person 89% 98% +9Source: Women at NBCU Power of the Purse Study Fall 2009. Total Women 18+.

What Inspired Us? We Knew…2. Women are WOM drivers when it comes tobrand conversations# of brands talked about weekly 92 84 Male FemaleSource: Keller Fay Group’s TalkTrack®

What Inspired Us? We Knew…3. Women are more trusted and influential thanMen, even among MenResponse to word-of-mouth received from each gender Male Female 62% 53% 53% 51% 46% 45% 33% 36% Credibility of Propensity Propensity to Seek Propensity Brand WOM to Relay More Info to PurchaseSource: Keller Fay Group’s TalkTrack®

New Questions to Answer1. How does word-of-mouth change throughout the path to purchase?2. What triggers WOM in different phases of the path to purchase?

MethodologyOnline survey of 4,999 representative women 18-54March 2010Measured dynamics of person-to-personcommunication, whether face-to-face, over the phone, oronlineIdentified the point along the purchase path that each womanis at in all of the 12 categories within the 6 industries studied

WOM Plays an Increasing Role Closer to the Point of Purchase Among Women All categories % of WOM among women by purchase stage All Categories Average50% Industries studied:40% auto, financial, payment cards, electronics, teleco 36%30% m, movies (movies not included in “all categories” analysis) of women have a20% conversation during the narrowing or final10% decision-making purchase stage0% Not Relevant Needs Met Starting to Look Researching Narrowing Final Source: NBC WOM Custom Study, March 11th – 25th 2010. Conducted by the Keller Fay Group

Advertising Plays a Bigger RoleThan Women ThinkWhat Consumers BelieveConsumers acknowledge they rely onadvertising to learn about products,but claim it plays a smaller role as theyapproach an actual decision80%60% advertising as important resource40%20%0% Awareness Phase Research Phase Decision-Making PhaseSource: NBC WOM Custom Study, March 11th – 25th 2010. Conducted by the Keller Fay Group

Advertising Plays a Bigger RoleThan Women ThinkWhat Consumers Believe What Consumers DoConsumers acknowledge they rely on …But when consumers talk about brands, theadvertising to learn about products, closer they get to a decision, the more they talkbut claim it plays a smaller role as they about things they learned about fromapproach an actual decision advertising “Pre-purchase80% 40% Promoter” Period60% 30% advertising as important resource40% 20% advertising as topic of conversation20% 10%0% 0% Awareness Phase Research Phase Decision-Making Needs Met Starting to Researching Narrowing Final Phase LookSource: NBC WOM Custom Study, March 11th – 25th 2010. Conducted by the Keller Fay Group

TV & Internet Drive WOM More ThanOther Paid Media at All StagesWOM % containing media/marketing referencesat each purchase stage 17% Starting to look 14% 13% Researching 12% 11% Narrowing choices 8% Final decision 7% 5% 4% 4% 3% 3% 3% 3% 3% 2% 2% 2% 2% 1% 1% 2% 1% 1% 1% 1% 1% 1% Television Internet Newspaper Magazine Radio Cell/Mobile Billboard Ad Ad Ad Ad Ad Device Ad AdSource: NBC WOM Custom Study, March 11th – 25th 2010. Conducted by the Keller Fay Group

Study Highlight: TV is Often the SparkRole of TV & Internet in brand WOM,across all categories Television Internet 31% 24% 16% 14% Medium prompted Medium prompted conversation immediately conversation laterSource: NBC WOM Custom Study, March 11th – 25th 2010. Conducted by the Keller Fay Group

…While WOM Often Stimulates ResearchActions taken/likely to be taken basedon WOM at each purchase stage 33% 32% 30% 25% Get More Info/ Do Research on it 22%18% 18% Visit the Brand/ 15% Company Website 12% 11% 10% Visit a Store to Find 9% 8% Out More About it 4% 5% 3% Spend More $ Than Planned Needs Met Starting to Look Researching Narrowing ChoicesSource: NBC WOM Custom Study, March 11th – 25th 2010. Conducted by the Keller Fay Group

WOM is Most Influential Later in thePurchase FunnelPurchase likelihood based on WOM by purchasestage, across all categories Top 3 Box (8, 9 or 10 on 0-10pt. scale) + Already Bought80%60%40% Industries studied:20% auto, financial, payment cards, movies, electronics, te 0% lecom Starting to Look Researching Narrowing FinalSource: NBC WOM Custom Study, March 11th – 25th 2010. Conducted by the Keller Fay Group

…the Vast Majority of WOM Occursas it Always Has…Mode of WOM by purchase stage,across all categories Face to Face On the Phone Online (NET)80%70%60%50%40%30%20%10% 0% Not Relevant Needs Met Starting to Look Researching Narrowing FinalSource: NBC WOM Custom Study, March 11th – 25th 2010. Conducted by the Keller Fay Group

Different Categories, Different Dynamics WOM % among women consumers containing paid media/marketing references at each purchase stage Telecom Payment Cards25% 25%20% Television 20% Internet15% Magazine 15% Radio10% 10% Newspaper5% Cell/ Mobile Device 5% Billboard0% Needs Met Starting to Researching Narrowing Final Decision 0% Look Choices Needs Met Starting to Researching Narrowing Final Look Choices Decision Though the categories we studied showed general trends, each had its own “personality” with discrete implications as well Source: NBC WOM Custom Study, March 11th – 25th 2010. Conducted by the Keller Fay Group

Different Categories, Different Dynamics WOM % among women consumers containing paid media/marketing references at each purchase stage Automotive Tech/Electronics30% Television 25%25% Internet 20%20% Magazine 15%15% Radio 10%10% Newspaper5% 5% Cell Phone/Mobile Device0% 0% Needs Met Starting to Researching Narrowing Final Billboard Look Needs Met Starting to Researching Narrowing Final Look Though the categories we studied showed general trends, each had its own “personality” with discrete implications as well Source: NBC WOM Custom Study, March 11th – 25th 2010. Conducted by the Keller Fay Group

Implications 1. Consumers are “marketers” in all purchase phases, not just post-buy 2. Word-of-mouth increases as consumers get closer to buying; indeed, there is a “Pre-Purchase Promoter” peak in the latter half of the funnel when WOM is elevated and more influential 3. TV often sparks a conversation that pushes toward online, even late in the funnel 4. Think about WOM as a key outcome of media and advertising, with different media working together along a purchase path 5. Research plays a key role: there’s no one-size-fits-all approach, as patterns vary by category

Thank You!Ed Keller Tony Cardinaleekeller@kellerfay.com tony.cardinale@nbcuni.com twitter.com/kellerfayfacebook.com/kellerfay

Supercharging the Path to Purchase: Using Word of Mouth to Drive More Consumers to Buy

by Keller Fay Group

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