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Conversational Capital Book Review


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Conversational Capital Book Review

  1. 1. CONVERSATIONAL CAPITAL A Social Media Knowledge Benchmark Humaira Lasi MKTG 6900A Fall 20009 October 06, 2009
  2. 2. What is Conversational Capital? <ul><li>Word of mouth is peer meditated and has more authority. Conversational Capital hypothesizes to us why peers talk about an experience to their friends, families, and coworkers. </li></ul><ul><li>Consumers are likely to become vocal, committed advocates of an experience when it means something to them. </li></ul><ul><li>Personal stories are like currency in the modern world. Consumers rely on them to define themselves and project themselves to others. </li></ul><ul><li>When a brand story becomes part of that currency, the brand’s value increases exponentially. That’s the “capital” part of Conversational Capital. </li></ul><ul><li>There are eight engines of Conversational Capital that amplify a consumers experience </li></ul>
  3. 3. Eight Engines of Conversational Capital <ul><li>When rituals become part of your experience, it makes them more memorable and worthy of conversation. </li></ul><ul><li>Initiation is a special subset of ritual. </li></ul><ul><li>i.e. Tiffany’s, Tupperware, Seinfeld, IKEA </li></ul><ul><li>Consumers demand customization and differentiation </li></ul><ul><li>“ The more an experience belongs to me and me alone, the more powerful it will be – and the more inclined I will be to talk about it” </li></ul><ul><li>i.e. Starbucks, iTunes, Adidas, Kinder Egg </li></ul><ul><li>Stories set brands apart because they are important in the identity forming and affirmation process </li></ul><ul><li>i.e. Coke, Red Bull, American Express </li></ul><ul><li>Observed when a consumer experiences surprises and delights a full range of senses </li></ul><ul><li>Resonates with the consumers experience in a meaningful way </li></ul><ul><li>i.e. Abercrombie & Fitch </li></ul>Rituals 1 Exclusive Product Offering 2 Myths 3 Relevant Sensory Oddity 4
  4. 4. Eight Engines of Conversational Capital <ul><li>Icons are signs and symbols that clearly demarcate a consumption experience from any other. They range from design features to familiar logos and product symbols </li></ul><ul><li>Icons are extremely efficient heuristics </li></ul><ul><li>i.e. Target, Cirque de Soleil </li></ul><ul><li>Group affiliation is a massive part of identity determination </li></ul><ul><li>Conversational Capital grows when you facilitate the formation of tribes and tribal behavior </li></ul><ul><li>i.e. Cirque de Soleil </li></ul><ul><li>Endorsement works when credible members of a tribe put their reputations on the line to stand behind an experience </li></ul><ul><li>Different than celebrity endorsement which is paid for </li></ul><ul><li>Peer endorsement has its roots in the deep satisfaction and relevance that turns consumers into brand advocates </li></ul><ul><li>Positive word of mouth is the result of continuity between your experience (who you are), how you communicate that experience (who you say you are) and how consumers feel about the experience (who people say you are) </li></ul><ul><li>i.e. Swiffer, Red Bull </li></ul>Icons 5 Tribalism 6 Endorsement 7 Continuity 8
  5. 5. How do we put the pieces together? <ul><li>Implementing Conversational Capital </li></ul><ul><li>Assemble a multidisciplinary team to enhance creativity and </li></ul><ul><li>encourage insight. </li></ul><ul><li>Carry out a Conversational Capital audit by asking questions. </li></ul><ul><li>Generate insight on what needs to be done. Question your brand’s D.N.A., consumer needs and reinvention of the brand. </li></ul><ul><li>Exercise creativity by: </li></ul><ul><ul><li>Getting your story straight </li></ul></ul><ul><ul><li>Using the engines of conversational capital as your guide </li></ul></ul><ul><ul><li>Multiply your cultural references </li></ul></ul><ul><ul><li>Ask yourself where you can create the most market discontinuity </li></ul></ul><ul><ul><li>Challenge the status quo </li></ul></ul><ul><ul><li>Manipulate time </li></ul></ul><ul><ul><li>Borrow from other categories </li></ul></ul><ul><ul><li>Spot the unfulfilled need </li></ul></ul><ul><li>Implement your solution by packaging your idea, building a prototype, monitoring your progress, roll out your experience and improve your work. </li></ul>
  6. 6. Why Conversational Capital Works <ul><li>Consumers are presented with more choices than ever before. </li></ul><ul><li>In the presence of time constraints, consumers are now more sophisticated and discriminating that they have every been. </li></ul><ul><li>As they become more sophisticated, consumers naturally turn to experiences that are richer in meaning. </li></ul><ul><li>These rich experience are what get talked about most. </li></ul><ul><li>Incorporating the engines of Conversational capital into consumer offerings increases meaning. Positive word-of mouth enables you to reduce marketing and promotional costs while driving growth. </li></ul>“ We have moved from what we call the “low saliency” experience era to the “high saliency” experience age. By saliency, we mean impact, depth of consumer interaction with the product or message, and meaning. The more an experience is salient, the greater its capacity to reach, involve and move the consumer”
  7. 7. Conversational Capital Review “ People will talk, and they should be talking about you. Let the conversation begin…” <ul><li>Provides a simplified approach on how to capitalize on the word of mouth generated by consumers – get users to talk about your brand or product </li></ul><ul><li>Key learnings demonstrated through examples of successful national brands that have used Conversational Capital to their advantage (i.e. IKEA, Adidas) </li></ul><ul><li>Improvements to be made </li></ul><ul><li>Could have provided a case study showing Conversational Capital in use to turn around a failing brand </li></ul><ul><li>Focused on already successful brands </li></ul>
  8. 8. Do we have a Social Media Revolution on our hands? Let’s see for ourselves…
  9. 9. The Social Media Revolution <ul><li>The number of people that are a part of a social network is growing exponentially which is allowing a message to reach more people at a faster rate </li></ul><ul><li>Buyers now more than ever like to be well informed. They seek out the opinions and feedback from others like themselves. </li></ul><ul><li>Social media is shifting the way we communicate as it is a lot more convenient for users and promotes conversation at anytime, anywhere allowing consumers to share their brand and product experiences </li></ul><ul><li>Social networks are a new medium for consumers to communicate their message. Companies need to ensure that these messages are positive. </li></ul>
  10. 10. Conversational Capital and the Social Media Revolution <ul><li>Conversational Capital understands the importance of peer mediated word of mouth and aims to provide marketers with a deeper understanding of what encourages a consumer to talk about their experiences with a product or brand. </li></ul><ul><li>It is imperative in today’s time as globally we are experiencing a revolution in the way we all communicate </li></ul><ul><li>The book broadens the marketing methods currently used by companies and provides a direction to move away from traditional marketing practices (mass advertising) </li></ul><ul><li>Companies need to invest the time to create more valuable experiences for consumers – this will create more loyalty and will encourage a consumer to positively talk about your brand. </li></ul><ul><li>Word of Mouth is now transferring into the “World of Mouth”. Your message is now accessible to someone half way across the world. The reach is infinite and content is live forever </li></ul><ul><li>By utilizing the eight engines of Conversational Capital, we can have a guided approach to make sure that the communication is positive </li></ul>
  11. 11. Conversational Capital at Work <ul><li>Conversational Capital exercised through social media channels is bridging the gap between multiple disciplines (i.e., marketing, communications, government relations, stakeholder relations) </li></ul><ul><li>Ketchum, a leading public relations agency, recently researched the role of conversations in the 0purchasing power of women </li></ul><ul><li>Female consumers are multi-minded and have little time for commercial messages </li></ul><ul><li>Women use shortcuts to get the right information for their purchase decisions </li></ul><ul><li>“ Before Women go shopping they go CROPing ” – they seek out CR edible OP inions from influencers , opinion leaders in their families or communities for advice </li></ul><ul><li>Friends and family top the credible sources list for women across food, consumer electronics and consumer-packaged good categories </li></ul><ul><li>To evoke a positive experience for a consumer your brand needs to communicate a salient , resonant message that adds residual value to a user </li></ul><ul><li>What does this mean ? </li></ul>
  12. 12. Is your brand worth their time ? <ul><li>Different kinds of social media? </li></ul><ul><li>Where are certain kinds stronger/weaker? </li></ul>