1. The Power of Consumer-to-ConsumerRecommendations in the Retail SectorThursday, September 13, 2012
2. About RewardStream RewardStream is an emerging leader in consumer-to-consumer (C2C) marketing solutions for brands targeting the socially connected customer. We help clients to energize consumers to recommend & refer to their trusted networks, and then to evolve them into loyal, high value relationships. Since 1999, we have delivered customer referral, loyalty and engagement solutions for some of the world’s most esteemed brands.
3. Speakers Alexandra Best Richard Robins VP VP
4. Agenda• Quick look: Marketing in the retail sector• Overview of research: Keller Fay & WoM for retailers• Examples: A look at how several retailers are fueling growth through referral marketing• Q&A
5. Have a Question?• Use the chat window in GoToMeeting to submit your questions throughout the session; we have left time for Q&A at the end of the webinar• If we don’t get to your question during the session, please send questions directly to firstname.lastname@example.org
6. Dynamics Facing Retail Marketers
7. Search is Under Siege “We do on the order of a billion queries a day, and we’re not even trying. Most of it is people trying to find people, but a bunch does link to commercial behavior like trying to find brand pages. You get these search engines where you type in keywords and it runs some magic to tell you what it thinks you want. But I think search is evolving to provide specific answers. Facebook is pretty uniquely positioned to answer most of the questions people want to ask. Like “What restaurants do my friends like?” - Mark Zuckerberg At Techcrunch Disrupt September 11, 2012
8. “Search isn’t growing as it was for some ofour business because consumers are looking for us in other places” - Jessica Koster, Senior Director eCommerce The Jones Group
9. More marketers believesocial and mobile willincrease in effectiveness,as compared to affiliatemarketing and email
10. Effectiveness of Social Networking Tactics
11. “Your brand isn’t what you say it is. It’s what other people say it is.”1. Give people a reason to talk about your stuff2. Make it easier for that conversation to take place.
12. “Hearing what other people have to say about a product gives shoppers the satisfaction of knowing what they purchased is peer-reviewedand worth their money. Whether it is based on aconversation with a friend or a customer reviewon a website, people put a lot of weight in other shoppers’ opinions. “ - Mike Gatti, Executive Director Retail Advertising and Marketing Association
13. “Marketers spend millions of dollars on elaborately conceived advertising campaigns, yet often what really makes up a consumer’s mind is not only simple but also free: a Word of Mouthrecommendation from a trusted source. A Word of Mouth recommendation is the primary factor behind 20 to 50% of all purchasing decisions.“ - McKinsey Quarterly, April 2010
14. Word of Mouth: The Keller Fay ReportGeneral Findings
15. Research Goals• What is the influence of word-of-mouth recommendations in the retail category?• Are word-of-mouth recommendations more or less influential at different points during the consideration and purchase lifecycle?• Is there a difference in the impact of solicited vs. unsolicited recommendations?
16. Who is The Keller Fay Group?• The first research-based marketing consultancy focused exclusively on word of mouth• A few nuggets from The Face-to-Face Book: • It’s an invaluable tool for marketers who want to spread the word about their products and brands faster than the speed of Facebook and with far greater impact. • In-person social networking, not online marketing, is the secret to soaring revenues. • 90% of recommendations that lead to consumer action happen offline.
17. Methodology• RewardStream commissioned Keller Fay to study how recommendations affect purchases in banking, vacation travel, communications, subscription entertainment, and retail categories• The survey was conducted among a total sample of 1,274 adults ages 18-59 who had purchased, applied to, or subscribed to a new product or service in the past 12 months.
18. The Overall Importance ofPersonal Recommendations
19. Recommendations are Frequent Recommended a product or service to Made a purchase based on a someone recommendation Never Never 1% 1% Rarely Rarely 6% Very Often 7% Very Often 11% 16% Sometimes 33% Sometimes Often 42% Often 40% 43%
20. Recommendations Impact More Purchases Than Any OtherSource % of purchases influenced at any purchase stage, all categories A personal recommendation 40% Past experience 32% Something I saw in a store/office 19% Online consumer review websites 17%An advertisement in a magazine, newspaper, or online 17% Price comparison websites 15% A commercial on TV or the radio 14% Something on a package, flyer, or brochure 10% An article in a magazine, newspaper, or online 9% Over 20% of responses of “Something Else” include a reference A TV or radio program 6% to price, cost, an offer, or sale. Another type of website 5% Other items include convenience or Online blog 4% need, or general references to family Another type of ad 3% and friends. Social media site 2% Something else 22%
21. Face-to-Face Communication is the Most Predominant Way toMake a Recommendation % of purchases influenced by recommendations by mode at any stage, all categories Face-to-face 82% Over the phone 15% Via e-mail 5% Via SMS/text 1% Via IM/chat 1% (e.g. AIM, GChat) Via Facebook or Twitter 1% Via another social media site 1% (e.g. Google+, Tumblr) Some other way 6%
22. Recommendations are Evenly Divided BetweenSolicited and Unsolicited % of solicited and unsolicited recommendations for specific purchases by purchase stage, all categories Solicited Recommendations Unsolicited Recommendations 55% 47% 46% 44% 44% 37% While becoming aware of a While researching various options While preparing to purchase specific brand
23. Across All Stages, Recommendations areMost Influential in Purchases % of purchases influenced by purchase stage, all categories Recommendations Advertisements (Net) Online (Net) In a Store (Net) Nets defined as follows:40% Online (Net) • Online consumer review websites35% • Price comparison websites 28% • Another type of website30% 26% 26% • Online blog • Social media site25% 23% 23% 19% Advertisements (Net)20% 18% • A commercial on TV or the radio • An ad in a magazine, newspaper, or 17% 13% online15% 14% 17% • Another type of ad10% 8% In a Store (Net) • Something I saw in a store/office5% • Something on a package, flyer, or brochure0% While becoming aware of While researching various While preparing to a specific brand options purchase
24. Word of Mouth:Findings for the Retail Sector
25. Retail Sector Highlights1. Consumers seek recommendations from family and friends more often for retail categories than for any other category.2. Consumers increasingly seek advice from experts and other informed sources as the value or perceived importance of the product increases.
26. Respondents Overwhelmingly Identified Friends and Family asthe Source of Recommendations for Retail Products % of purchases influenced by recommendations given by each Personal Care Health Products Family/Friends (NET) 63% Family/Friends (NET) 60% A friend 38% A friend 29% Other family member 24% Other family member 24% Spouse/Partner 1% Spouse/Partner 11% A sales person/clerk 24% A sales person/clerk 17% A co-worker 6% A co-worker 8% An acquaintance 4% An acquaintance 4% Someone else 20% Someone else 29% Apparel Consumer ElectronicsFamily/Friends (NET) 75% Family/Friends (NET) 81% A friend 42% Other family member 39%Other family member 29% A friend 34% Spouse/Partner 10% Spouse/Partner 13% A sales person/clerk 16% A sales person/clerk 27% A co-worker 11% A co-worker 13% An acquaintance 7% An acquaintance 1% Someone else 5% Someone else 2%
27. Consumers Seek Recommendations from Family and FriendsMore Often for Retail Categories Than for Any Other Category. % of people likely to look for advice from different types of people for specific types of purchases Somebody Close (Family/Friends) Distant Friend with Experience in Category An Expert/Professional in Category 78% 40% 42% 18% 13% 9% A purchase related to fashion or personal appearance A technology purchase (e.g. a computer, TV, phone)
28. Recommendations vs. Advertisements for Select RetailCategories % of purchases influenced by recommendations or advertisements (net) by category Recommendations Advertisements (NET) Personal Care Health Products 40% 40% 33% 31% 33% 28% 23% 23% 17% 15% 20% 11% 20% 10% 20% 21% 0% 0% While becoming While While preparing While becoming While While preparing aware of a researching to purchase aware of a researching to purchase specific brand various options specific brand various options 40% Apparel 40% Consumer Electronics 24% 26% 23% 20% 18% 21% 20% 20% 13% 6% 7% 15% 14% 0% 0% While becoming While While preparing While becoming While While preparing aware of a researching to purchase aware of a researching to purchase specific brand various options specific brand various options
29. Sharing Stories
30. Getting Customers Talking: A Top 100 eTailer Turns to WoMThey wanted to know….• How could they capitalize on the good will of their happy customers?• How could they get their existing happy customers sharing their brand?• What customer insights would they be able to glean?• What efficiencies could they achieve in their marketing?
31. Happy Customers Share Offers with New Customers• Launched Refer-A-Friend using their already loyal, enthusiastic customer-base as a springboard for new customer acquisitions through referrals• Customers can share coupons with friends via Facebook, Gmail, Twitter, email and personal URL• When their friend uses the coupon to make a qualifying first purchase, the referrer receives a coupon they can use against a future purchase
32. "… new customers up 44%driven by strong results from theCompanys marketing initiativesand the continued success of its Refer-A-Friend program."
33. Nurturing New Members:A Beloved Family Of Brands Pilots WoM• Family of brands created an exclusive program to be a resource on baby and toddler nutrition, while offering exclusive savings, samples, offers and resources to members• They were looking to use customer and member recommendations to expand their online community, increase awareness for their program, and grow their member-base
34. Getting Members Sharing!• For a limited time, members can share the program with friends/family and moms to be in their social circles using email, Facebook, Twitter, and personalized URL• When the friend becomes a member of the program, they receive a $10 gift card to Amazon for the NEW amazon baby store, or anything else they’d like to purchase from Amazon
35. Early Impressions “With each wall post made we have the ability to reach a wider audience through impressions, thus increasing program awareness through word of mouth, all while helping to drive acquisition.”
36. Early Impressions “Because everything is tracked at both aggregate and individual member levels, this really provides us with valuable insights on who some of our key influencers might be. Think of the possibilities and targeting we can do moving forward, knowing who these high value members are.”
37. Key Takeaways
38. Customer Takeaways1. Customers are happy to share with friends and family - especially when your product, service, brand or program makes them happy!2. Making it easy to share means more sharing will happen.3. A referral program that capitalizes on social recommendations – both online AND offline – can boost acquisition, deliver actionable insights into who your most valuable customers are, and drive awareness … not mention ROI.
39. Research Takeaways• Word-of-mouth recommendations are a strong driver of consumer purchase behavior at all stages of the purchase lifecycle, regardless of purchase category.• Consumers seek recommendations from family and friends more often for retail categories than for any other category, but they increasingly seek advice from experts and other informed sources as the value or perceived importance of the product increases.• In general, the importance of recommendations increases the nearer consumers are to making a purchase.• The influence of advertisements decreases as consumers progress along the stages of the purchase lifecycle in all of the retail categories.
40. Have a Question?• Use the chat window in GoToMeeting to submit your questions throughout the session; we have left time for Q&A at the end of the webinar• If we don’t get to your question during the session, please send questions directly to email@example.com
41. ContactAlexandra Best Richard RobinsVP Marketing VP Client SuccessRewardStream RewardStreamalexandra.firstname.lastname@example.org email@example.com 604.282.7544 Connect with us! Facebook.com/RewardStream Twitter.com/RewardStream