Consumer advisory panels
The next big thing in word-of-mouth marketing?


       Using consumer advisory panels to drive sales
       I Converse, Cadillac, Mercedes...
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Customer Advisory Boards


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A short presentation on the marketing value of setting up virtual advisory boards made up of opinion leaders and experts

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Customer Advisory Boards

  1. 1. WORD OF MOUTH PAUL MARSDEN Consumer advisory panels The next big thing in word-of-mouth marketing? By PAUL MARSDEN H There’s nothing new about OW DO YOU unlock sales consumer advisory panel, you can turn revenue by harnessing word of fickle consumers in loyal customers consumer panels as a market mouth? Forget the usual sus- only too willing to recommend. research tool. But the internet pects – buzz, viral and stealth market- has magnified the potential for ing – they are PR stunts on steroids that create awareness by getting your A scalable solution to word- engaging vast numbers of of-mouth marketing marketing (but often not your prod- consumers to create loyalty and uct) talked about, but rarely have any Consumer advisory panels are not advocacy. Paul Marsden describes significant impact on sales. Instead, new, and have long been used to help how consumer advisory panels take the lead from consumer goods marketers make smart decisions in line giant Procter & Gamble, and set up with market demands. What is new are used by P&G and others to your own online consumer advisory about these panels is that they are involve their consumers in all panel. moving online and becoming bigger, aspects of brand development, Consumer advisory panels harness much bigger. Procter & Gamble, who thereby strengthening loyalty ‘involvement’ to create loyalty and are leading the field, has upwards of advocacy among panel members – 750,000 members in its two online US consumers who buy more and recom- consumer advisory panels ‘Tremor’ mend more (two variables unequivo- (for teens) and ‘Vocalpoint’ (for cally linked to sales growth: ‘moms’). Panel participants, recruited Reichheld 2003; Marsden 2005). by banner ads and word of mouth are The idea behind consumer advisory regularly invited to participate in panels is simple. Instead of marketing online VIP votes on P&G and ‘part- at consumers, market with them by ner’ brands, allowing them to call the involving them in what you do, and shots on anything from pack design, giving them a say in how you do it. By logos, new flavours, strap-lines, ads connecting, collaborating and co-cre- or promotional material (see the box ating with your market through a on the next page). This ‘1-click Dr Paul Marsden is a social psychologist and involvement’ is simple, smart and freelance market researcher. scalable – and creates a loyalty effect 2 Market Leader Summer 2006
  2. 2. WORD OF MOUTH PAUL MARSDEN and advocacy effect that, in controlled nothing to do with what was being tests, has been found to boost sales by researched, and everything to do with In focus groups, the 10–30%. involving people in the name of research. They called this effect the Hawthorne Effect can Hawthorne Effect: the effect of engag- Why consumer advisory ing people in marketing research on be extremely strong – panels drive sales: the Hawthorne Effect creating loyalty and advocacy. What was happening was that the partici- after 90 minutes of But why should setting up an online pants felt flattered and privileged to be involvement in a new consumer advisory panel boost sales? involved in research on a new initiative The answer is because it is a scalable – and this biased their view towards product concept, solution to harnessing a very powerful psychological phenomenon, known as whatever it was they were testing. For nearly a century, the Hawthorne participants often leave the Hawthorne Effect, in large num- Effect has been something of a bane to the group passionate bers of consumers. market researchers; it systematically The Hawthorne Effect is named occurs and biases market research advocates of what they after the Hawthorne production plant of Western Electric, just outside findings towards whatever is being tested. In focus groups, the have been asked their Chicago, where it was first discovered, Hawthorne Effect can be extremely advice on quite by accident back in the 1920s. strong – after 90 minutes of involve- Researchers from MIT and Harvard ment in a new product concept, par- found that by inviting employees to ticipants often leave the group pas- give their views on new working con- sionate advocates of what they have ditions in the factory, before they were been asked their advice on. rolled out, employees would systemat- But for marketers the Hawthorne ically be favourable to them. What’s Effect represents a real opportunity; more, when they trialled these new engage target consumers in research working conditions their productivity and by listening to what they have to say increased. you create an instant market of loyal For example, when employees were advocates hungry to buy your product. engaged in research testing brighter Do this online, through simple online lighting in the factory, feedback was voting, and you can reach tens of positive, and productivity increased when they trialled working with the brighter lighting. However, when other employees were involved in test- P&G’s Tremor & Vocalpoint ing subtler lighting conditions, they Creating loyal advocates through consumer advisory panels liked that too – and productivity increased. Confused, the investigators I Helping develop Vanilla Coke’s ‘Nothing Else Like It’ billboard campaign re-ran the research, progressively and come up with intriguing messages to appear on promotional dimming the lighting, but participants heat-sensitive cans remained loyal to whatever it was they I Voting on launching Snoop Dogg’s new line of shoes were asked about, and productivity I Advising on the trailer for the movie Biker Boyz kept increasing until the light was no I Choosing which Herbal Essences commercial to air for promoting Fruit brighter than moonlight! Fusions Tropical Showers range A second series of tests at the Hawthorne plant confirmed the pecu- I Recommending which fashion model to use in a Pantene commercial liar phenomenon – engaging employ- I Selecting backing music for a Pringles advertisement ees in research to test shorter working I Picking models for a body-spray calendar hours produced advocacy and I Helping design the new Crest Spinbrush increased productivity. But then so did I Voting on a T-shirt design for Vans ‘Warped Tour’ concert research involving employees in I Naming the DreamWorks SKG movie Eurotrip research testing longer working hours. I Choosing the logo for the teen movie Win a Date with Tad Hamilton! The researchers finally realised that what was happening had absolutely Market Leader Summer 2006 3
  3. 3. WORD OF MOUTH PAUL MARSDEN Using consumer advisory panels to drive sales I Converse, Cadillac, Mercedes and Sixt Car Rentals all use research to create word-of-mouth advocates by giving target buyers and brand fans a say in their advertising campaigns. I BMW, Audi and Boeing create loyal word-of-mouth advocates through their virtual innovation labs, which give car enthusiasts and aviation fans a say in new product development. I Crayola drives demand with VIP Votes that let consumers decide on the names of new crayon colours (the four crayon shades on the right were named by consumers for Crayola’s 100th birthday). I Google, Microsoft, Napster and Macromedia all use research to create loyal advocates through beta-testing research programmes. I The Tate Gallery in London builds loyalty and advocacy by inviting visitors to call the shots on how exhibits are labelled. I New Line Cinema stimulates box office sales with word of mouth by giving fans a say in movie production decisions (e.g. The Lord of the Rings). I Brewtopia, the Australian beer company, and Kaiser beer in Brazil drive sales by inviting consumers to vote on product packaging and marketing. I Staples, the office supplies retailer, and home furnishings giant IKEA drive demand by engaging customers with research on innovation ideas. I Sears department stores create word-of-mouth advocates for their Portrait Photo Studios by inviting opinion-leading mothers to shape their marketing. thousands of consumers, instantly cre- Conclusion: the future as model of marketing, and embrace ating a sizable market that is ready to co-creation? the new ‘connect and collaborate’ buy and recommend. This is precisely Online consumer advisory panels are a zeitgeist, where marketing is done what P&G’s consumer advisory pan- new way of selling to consumers that with consumers rather than at them. els, Tremor and Vocalpoint, do: create use the Hawthorne Effect to create By connecting, collaborating and ready-made markets that not only buy loyalty (purchase frequency) and co-creating with markets through the products, but act as a volunteer advocacy (referral value) among pan- consumer advisory boards, market- salesforce. ellists. But they represent a win–win ing is learning to respect the very for both business and consumers. By people it depends upon for its sur- allowing consumers to call the shots vival: consumers. k A new way of selling to on marketing and innovation, con- consumers sumers are empowered and get what paul@viralculture.com P&G is not alone in using the they want – not what the business www.viralculture.com Hawthorne Effect with consumer thinks they want. And by treating con- advisory panels designed to drive sales sumers as partners rather than targets, by creating loyalty and advocacy. and engaging markets in dialogue References Other brands investing in this new rather than interruptive monologue, Marsden, P. (2005) ‘Connected mar- way of selling to consumers include consumer advisory panels walk the keting’, in Kirby, J. & Marsden, P. Converse, Cadillac, Mercedes, Sixt marketing talk – putting the con- (eds) Connected Marketing: the Viral, Car Rentals, BMW, Boeing, Crayola, sumer, not the marketer, at the heart Buzz and Word of Mouth Revolution. Google, Napster, Macromedia, of marketing. London: Butterworth. Microsoft, Audi, Nike, New Line Indeed, consumer advisory boards Reichheld, F. (2003) ‘The one number Cinemas, MTV and Sears (see the box represent a radical departure from you need to grow’, Harvard Business above). the old ‘command and control’ Review, December, pp. 1–11. 4 Market Leader Summer 2006