Closed loop WOM Marketing

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Here is an initial draft for "Getting Your Customers to Do Your Marketing for You" CEA sponsored webinar.
Here is the link to recording http://consumerelectronics.na5.acrobat.com/p13095662/

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  • There is a good research that shows:Products sell more with WOM – 20-25% more if a product has a “sufficient” number of reviews. It is more important to have “sufficient” volume of WOM, than to have only positive reviews. In fact, absence of negative opinions creates suspicions of manipulation;Reducing negative WOM generates higher growth than increase in positive WOM. This study from London School of Economics found that a 10% improvement in product reputation correlated with a $22M increase in revenue within their study group.
  • There are 2 challenges arise from these findings:How to get WOM? How to measure it?WOM cannot be “faked”. Perceived authenticity and implied Trust are the most valuable and cherished attributes of WOM. In fact a few companies that tried to “Game It” either ended in court or experienced public humiliation along with significant drop in sales.Traditional Marketing approach is rich with military terminology like campaign, segmentation and market penetration the approach that would be detrimental to WOM Marketing. WOM Marketing is more analogues to Martial Arts or Dance where you anticipate and amplify the signals of your partners/customers. These are 3 practical steps to get it:Ask for itMake it easy to give and to useAct on it
  • Current norm of measuring it – 5 stars approach does not make WOM easy to use and even more difficult to act on it.From the consumer perspective 5 stars only helps in 7% of instances where products are rated below 2 stars or at 5 stars. The rest of 93% you have to read many pages of text to decide whether you want to take a chance with this product. There are a lot of complains about it;From the marketer perspective it is very expensive to deal with volumes of raw data that is only meaningful in competitive context. Most companies measure customer satisfaction for their product lines or brands. Some do Market research comparing them to their competitors. However the cost, accuracy, timeliness and action ability of this research is very problematic.
  • Closed loop WOM Marketing

    1. 1. Closed loop WoM MarketingThe cost effective alternative<br />"Before if you were making a product, the right business strategy was to put 70% of your attention, energy, and dollars into shouting about a product, and 30% into making a great product. So you could win with a mediocre product, if you were a good enough marketer. That is getting harder to do. The balance of power is shifting toward consumers and away from companies...the individual is empowered... The right way to respond to this if you are a company is to put the vast majority of your energy, attention and dollars into building a great product or service and put a smaller amount into shouting about it, marketing it. If I build a great product or service, my customers will tell each other.“ <br />Jeff Besos, Founder & CEO of Amazon<br />Amplified Analytics Inc. www.amplifiedanalytics.com 415-742-2580<br />
    2. 2. Stop shouting – It’s about time that you start listening to customers<br />Reviews are <br />the<br />Voice of Customers<br />Before deciding whether to purchase recommended products or services, more than four-out-of-five consumers (81%) will go online to verify those recommendations, specifically through researching product/service information (61%), reading user reviews (55%) or searching ratings websites (43%).<br />Amplified Analytics Inc. www.amplifiedanalytics.com 415-742-2580<br />
    3. 3. Word of Mouth creates reputation of products and services and it is more trusted than any form of advertising<br />2010 Online Influence Tread Tracker, Cone Research<br />Amplified Analytics Inc. www.amplifiedanalytics.com 415-742-2580<br />
    4. 4. Consumer purchase decision map<br />Amplified Analytics Inc. www.amplifiedanalytics.com 415-742-2580<br />
    5. 5. Which GPS Would You Buy?<br />based on Amazon.com Ratings<br />Garmin StreetPilot c330 3.5-Inch Portable GPS<br />Magellan Maestro 3250 3.5-Inch Portable GPS<br />Magellan Maestro 3250 3.5-Inch Portable GPS<br />Garmin StreetPilot c330 3.5-Inch Portable GPS<br />Based on 1,104 Amazon.com User Reviews<br />Based on 823 Amazon.com User Reviews<br />Buy new:$549.99$299.9915 Used & new from $79.95<br />Buy new:$449.99$283.95 20 Used & new from $79.00<br />Which GPS is better?<br />NOW, which GPS is better?<br />Amplified Analytics Inc. www.amplifiedanalytics.com 415-742-2580<br />
    6. 6. Amplified Analytics Inc. www.amplifiedanalytics.com 415-742-2580<br />
    7. 7. Action plan<br />Design Word of Mouth stimulation program<br />Authenticity is the most more critical attribute<br />Make it easy for customers to create their reviews<br />Help to disseminate them across Social Media<br />Implement “listen & act” strategy<br />Let customers know how their feedback is utilized by your company processes<br />Close the loop <br />Measure an impact on reputation<br />Measure economic impact<br />Build predictive analytical models to support key decisions<br />Amplified Analytics Inc. www.amplifiedanalytics.com 415-742-2580<br />
    8. 8. Monitor the trend<br />Amplified Analytics Inc. www.amplifiedanalytics.com 415-742-2580<br />

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