<Amberlie>Welcome everyone to today’s webinar on the topic of The Power of Consumer to Consumer Recommendations in the Telecom Sector. We will get started in just a moment.
<AMBERLIE>Welcome everyone to today’s webinar. Before we get started, I wanted to take a moment to tell you a bit about RewardStream. We make it our mission to help our customers with referral, loyalty and engagement solutions for some of the world’s most esteemed brands. Whether through simple refer a friend programs or more complex multi-behavior programs that might include rewards or incentives for more than just referrals and purchases but social behaviors too, since 1999 RewardStream has partnering with clients to deliver the solutions they need to foster mutually beneficial relationships with their customers.
<Amberlie>Now, I’ll take a moment to introduce our speaker.Alexandra is the VP Marketing at RewardStream, responsible for RewardStream’s brand, lead generation and communications. She is veteran marketer who has brought her years of experience as a marketer focused on lead generation into the company’s products and solutions; she has spoken frequently on word of mouth and where it intersects with acquisition.
<Amberlie>Here’s a quick overview of today’s presentation.First, we’ll take a quick look at issues and trends facing marketing in the telecom sector. Then, we’ll review the findings of the research study we published based on ground-breaking research by leading word of mouth research firm Keller Fay in the spring of this yearFinally, we’ll look at how a few telecoms are using WOM to boost acquisition.
<Amberlie>We’d encourage you to submit your questions through the presentation, you can do so by: Using the Chat Window in GoToMeetingUsing our @rewardstream Twitter handle to submit your questions on twitterUse the hash beyondthetransaction tag to join the ongoing conversation taking place on Twitter With that, I’d like to turn the mic over Alexandra. … next slide.
<ALEX>Thanks Amberlie.Thanks for attendingBefore we get into the research we’ll look at some of the factors facing marketers in telecom industry today
<ALEX>Forrester’s last US Interactive Marketing ForecastSearch was once the stalwart of the web marketing worldThe growth of social networking sites and non-PC devices like mobile has encouraged retailers to shift focusSearch is predicted to lose share from 55% to 44% of all interactive spend in 2016 Marketers have to be present WHERE and WHEN the consumer isIn Forrester’s last US Interactive Marketing Forecast, they found that consumers are increasingly turning to non-traditional search engines such as Facebook and non-PC devices like mobile to initiate their search for products, brands and services. For retailers, there’s a direct correlation between an increase in planned spend on social networks and a decline in spend on paid search. Survey data shows that search is forecasted to lose share from 55% (in 2011) to 44% of all interactive spend in 2016 Marketers are challenged with having to be present where AND WHEN the consumer is … we can’t assume that the consumer will be opening up a search engine at PC and typing in a search term and hitting “Enter”It’s intriguing to consider that consumers think of Facebook and mobile devices as search engines …. So what are you doing to
<ALEX>Last week Mark Zuckerberg shared some stats on the number of queries Facebook processes daily – reporting a staggering 1 billion queries, on par with Google. Search evolving to provide specific answers Intriguing to consider Facebook and mobile devices as search engines …. How can Facebook be part of your search strategy? “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 ZuckerbergAt Techcrunch DisruptSeptember 11, 2012
Consumers trust recommendations from people they know, consumer opinions and editorial contentThey are highly skeptical of brand-sponsored messaging The next highest level of trust was expressed 52% place trust in brand-sponsored websites and emails -
Keller Fay, a leading research consultancy identify an important group within your customer base called Conversation CatalystsThey are everyday consumers who stand out because they have large social networks, they regularly keep up with what’s new and emerging, and they are sought out by friends, family, and neighbors for advice and recommendations. Keller Fay found that conversation catalysts – maybe you call them advocates? – have a total network of 33 compared to the averageof 16
When you look at how much they recommend by categories<BUILD>40% of Conversation Catalysts give advice and recommendations on telecomCompare that to 15% of the total public who recommend in this category
So really the question is …. We all know there are these catalysts or advocates in our customer baseBut do you know who they are?Do you know their value to you as an organization? More importantly, are you doing what you can to help them spread the word?
Switching gears … In a great article published in 2007 in HBR the authors studied a group of telecom and fiserv customers – their guiding question was “Does the value of any one customer reside solely in what that person buys?” “How Valuable is Word of Mouth,” Kumar, Petersen, Leone: Harvard Business Review, 2007
Findings, simply stated: The value of any one customer does not reside solely in what that person buysHow your customers feel about you and what they are prepared to tell others can influence your revenue and profit just as muchKumar, V., Petersen, A., & Leone, R.P. (2011). How Valuable is Word of Mouth. Retrieved fromHarvard Business Review.Sample data set:9900 telco customers and 6700fiserv customers
They pointed to the ideal state – a company that wants to know a customer’s full value will include a measure of that person’s ability to bring in profitable new customersMost companies ask the question about willingness or intention to refer … But how many actually know whether the referrals are happening? The impact on their business?However, the nearest most companies get to establishing the value of a customer’s referral power is some gauge of the individual’s willingness to make referrals (e.g. Bain & Co., Fred Reichheld “Net Promoter” Score)
Polled 9900 Telco customers, 6700 Financial Services customers about referral intentionsThen tracked customers’ actual behavior and behavior of the referred customers over time
Results were fascinating 81% of the telecom firm’s clients thought they’d recommend the company, 30% actually didreferrals generated customers - 12%8% becameprofitable new customers.The Do Say Gap …. Strict CLV only misses a huge opportunity – look at CRVAt the right, look at the customer value -<BUILD> strictly based on CLV – 2nddecile bring in 1067 in dollar value <BUILD> compare to the 6thdecile when you look at customer referral value – 1020 – the same value … The question – if you ‘re only looking at your customers through the lens of their purchase transactions are you missing an important part of the picture?
<ALEX>Now look at what the research into US consumers who made purchased based on recommendations tells us … but first, it’s worth remembering that even though we all know intuitively that word of mouth is happening and is influential, marketers are still spending billions of dollars annually on acquisition … And most marketers struggle to understand the role of word of mouth overall, let alone where it comes into play along the stages of the purchase lifecycle and how it can be harnessed and tracked – even the ROI on word of mouth.
<ALEX>Now I’ll review the findings of the recent Keller Fay study on WOM across the purchase lifecycle.
<ALEX>I’ll just take a moment to talk about the goals that we set out to accomplish with this project. We were curious to know … While recommendations are clearly frequent and pervasive, do they impact behavior differently depending upon the purchase category? Buying jeans, for example, vs. getting a mortgage? Do recommendations play a more influential role at different points along the purchase lifecycle? While you are becoming aware, for example, vs. when you’re researching options? Do consumers respond differently to solicited vs. unsolicited recommendations? Am I more or less likely to take action when someone answers my direct request for a recommendation vs. being given one that I didn’t ask for?
<ALEX>Keller Fay to partner with on this research .. Keller Fay is the first research-based marketing consultancy focused on word of mouth… and the only firm to measure all WOM - they look at both online and offline Through their research they uncovered that 90% of recommendations that lead to consumer action happen offlineWith this background, they were a great fit for what we were looking for.
<ALEX>We focused on how recommendations affect purchases in Retail, Vacation Travel, Communications, Subscription Entertainment, and Financial Services CategoriesThe 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.The survey took place in late May 2012
<ALEX>We found that recommendations are frequent, and they are pervasive. Fully 92% of respondents reported that they had made a recommendation for a product or service AND 93 % reported that they’d made purchases based on the recommendations of others
<ALEX>The report also showed that recommendations have more influence than any other source of information in the purchase lifecycle, including advertising, in-store information, and consumer review websites, with 42% of respondents identifying a recommendation as the most influential source of information
<ALEX>The study also showed that of the many ways recommendations are made, fully 82% of them are made in face-to-face or in-person interactions. That may appear staggering, but as Keller Fay showed in other research, in person social networking accounts for 90% of recommendations that lead to a purchaseUnfortunately these recommendations are often difficult to track and measure and not well understood by marketers
<ALEX>When it comes to how recommendations are given, Keller Fay looked at whether there was a difference between solicited and unsolicited recommendations at various stages on the path to purchase. Solicited recommendations are ones that come in answer to a specific question, like, “I’m thinking of re-financing my mortgage, does anyone have any suggestions for who I can talk to?” – as you can see from this chart, solicited recommendations become more important as people get closer to making a purchase.Unsolicited recommendations – in orange – are more prevalent at the awareness stage of the purchase lifecycle, and less prevalent while preparing to purchase (than solicited recommendations)
When asked to compare recommendations against other types of influence, respondents felt that recommendations were the most influential source of input for prospective purchases across all stages of the purchase lifecycle, from awareness right through to purchase. The gap between recommendations and the next highest influencer is greatest when people are preparing to purchase
<ALEX>So what did we find when we looked more closely at the financial sector?
<ALEX>Three big things jumped out at us. Advertisements have more influence on subscription entertainment and TV/Internet services than on any other category.People more often seek advice from informed acquaintances for telecom subscription services than in any other category. Rewards are effective drivers for mobile and cable subscription services, both for customers making the recommendation and for those receiving the recommendation.
<ALEX>Respondents were asked to determine the influence of recommendations and advertisements across the purchase lifecycle. For telecom the results show that the influence of recommendations outstrips advertisements across the purchase lifecycle for mobile phone service purchase decisions. For consumers who recently made a new mobile phone service purchase decision, the influence of a personal recommendation over an advertisement was almost 3X greater during the research phase and a whopping 6X greater when making the final purchase decision.The relative influence of personal recommendations over advertisements was less when it came to TV/Internet service or subscription entertainment purchases, but the directional result is the same later in the purchase lifecycle: personal recommendations are far more influential than advertisements when making these types of purchase decisions..
<ALEX>The research shows that, for both the referrer and the referee, rewards played a significant role in wireless service and cable TV/internet referrals and purchases.Interestingly, this is not so for subscription entertainment.
<ALEX>For the telecom sector, respondents are most likely to seek advice from friends and family over knowledgeable acquaintances or so-called experts.
<ALEX>For telecom sector purchases, respondents overwhelmingly identified friends and family as the actual source of recommendations. It’s important to note, the relatively high influence of recommendations from a salesperson or clerk in the TV/Internet service category.
<ALEX>Here are just a few take-aways: Word-of-mouth recommendations are a strong driver of consumer purchase behavior at all stages of the purchase lifecycle, regardless of purchase category.Even though advertising has a high level of influence on consumers in the TV/Internet and subscription entertainment categories, the influence of advertising declines dramatically the closer consumers get to a purchase decision.Telecommunications purchases are more highly influenced by recommendations from family and friends rather than industry experts. Verbal referrals are significant driver of new customers.Your most valuable customers might be ones who refer you. Do you know who they are?
So now, we’ll leave you with some thoughts – after 10 years working with telecoms we’ve put together some things that are importantwhen you’re considering a referral program in this sector in particular
Most telecoms who’ve come through the explosive growth over the last ten years or so are moving into a new phase with a renewed focus on holding on to market share New focus on what we’re calling SMART acquisition – acquire the RIGHT new customers … COMPETITIVE landscape is changing – focus on delivering high quality service …. New entrants are challenging the established players …. Making sure you’re connecting with your happy customers is more important than ever beforeService: Superior, helpfulCommunications: High quality, reliable, timelyInteractions: From care reps, store reps – friendly, welcoming, informative and accurate informationIntegrity: Good company, good products, clear and understandable rate plans, etc.
After 10 years working in the telecom business we know a few things about the types of results you can expect: 5 referrals per referrer30 impressions per referral1 new customer per active referrerVerbal referrals convert at the highest rate, followed by targeted emails
So, if 40% of all purchases are influenced by a recommendation, how do you get started? First: Be present where your customers are. Social networks. Online portals.Mobile devices.Catch verbal referrals.90% of recommendations that lead to purchase are face-to-face. Give them a reason to share. Differentiate with a meaningful and brand-appropriate thank you.
You have more than one type of stakeholderCustomers and employees can both be advocatesNon commissioned and commissioned employees need to be treated differentlyYou need a program that can help you engage all these stakeholders appropriately, one that can tailor the eligibility rules to the referrer
Different channels matterVerbal referrals – are they important to your business. YES!! Make sure you can make it easy for customers to share referrals in face to face conversations. Social channels are important …
Incent customers to share with brand-appropriate incentives. Motivate their friends and family to respond with product/brand-appropriate rewards. Reward customers for opening up new business opportunities in other product lines
KISS: Reduce the need for IT, Brand, Legal, and Creative involvement.
<AMBERLIE>Thanks Alexandra, We’re going to begin our Q & A session now and I’d like to remind you that we’re happy to take any questions you might have. You can pose your quesitons to Alexandra by:Using the Chat Window in GoToMeetingUsing our @rewardstream Twitter handle to submit your questions on twitterUse the hash beyondthetransaction tag to join the ongoing conversation taking place on Twitter
<AMBERLIE>Well that’s about all the questions we have time for today. Thanks everyone for attending and participating in today’s webinar. Just one final reminder: we’re happy to take questions after the webinar – please feel free to reach out directly to Alexandra, and as always, there is more information on our website at www.Rewardstream.comThanks again everyone and have a great day!
Power of C2C Recommendations for the Telecommunications Sector
The Power of Consumer-to-ConsumerRecommendations in the Telecom Sector
About RewardStreamRewardStream is an emerging leader in consumer-to-consumer (C2C)marketing solutions for brands targeting the socially connectedcustomer.We help clients to energize consumers to recommend & refer to theirtrusted networks, and then to evolve them into loyal, high valuerelationships.Since 1999, we have delivered customer referral, loyalty andengagement solutions for some of the world’s most esteemed brands.
Speakers Alexandra Best VP Marketing RewardStream
Agenda• Quick Look: Marketing in the Telecom Sector• Overview of Research: Keller Fay & WOM for the Telecom Sector• Fundamentals for Referral Marketing Success• Q&A
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
Facebook and Mobile: The New Search?• Search was once the stalwart of the web marketing world• The growth of social networking sites and non-PC devices like mobile has encouraged retailers to shift focus• Search is predicted to lose share from 55% to 44% of all interactive spend in 2016*Forrester, US Interactive Marketing Forecast 2011 – 2016 (published August 2011)
“We do on the order of a billion queries a day, andwe’re not even trying. Most of it is people trying tofind people, but a bunch does link to commercialbehavior like trying to find brand pages. You get thesesearch engines where you type in keywords and itruns some magic to tell you what it thinks you want.But I think search is evolving to provide specificanswers. Facebook is pretty uniquely positioned toanswer most of the questions people want to ask.Like “What restaurants do my friends like?” - Mark Zuckerberg At Techcrunch Disrupt September 11, 2012
North Americans Overwhelmingly Trust Impartial Sources • Consumers trust recommendations from people they know, consumer opinions and editorial content • They are highly skeptical of brand- sponsored messaging • Only 52% place trust in brand- sponsored websites and emails
Do You Know Who Your Conversation Catalysts® Are?
Does the value of any onecustomer reside solely in what that person buys? “How Valuable is Word of Mouth,” Kumar, Petersen, Leone: Harvard Business Review, 2007
No. The value of any onecustomer does not reside solely in what that person buys.
How Valuable Is Word of Mouth?• Ideally, a company that wants to know a customer’s full value will include a measure of that person’s ability to bring in profitable new customers• Nearest most companies get to establishing the value of a customer’s referral power is some gauge of the individual’s willingness to make referrals (e.g. Bain & Co., Fred Reichheld “Net Promoter” Score)
Method• Polled 9900 Telco customers, 6700 Financial Services customers about referral intentions• Then tracked customers’ actual behavior and behavior of the referred customers over time
“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
Word of Mouth: The Keller Fay ReportGeneral Findings
Research Goals• What is the influence of word-of-mouth recommendations in telecommuncations 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?
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.
The 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.
The Overall Importance OfPersonal Recommendations
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%
Recommendations Impact More Purchases Than Any Other Source % 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% Over 20% of responses of An article in a magazine, newspaper, or online 9% “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%
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 (e.g. AIM, GChat) 1% Via Facebook or Twitter 1% Via another social media site (e.g. Google+, Tumblr) 1% Some other way 6%
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 While preparing to purchase specific brand options
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 websites 35% • Price comparison websites 28% • Another type of website 30% 26% 26% • Online blog • Social media site 25% 23% 23% 18% 19% 20% Advertisements (Net) • A commercial on TV or the radio 17% 13% 15% 14% • An ad in a magazine, newspaper, or 17% 8% online 10% • Another type of ad 5% In a Store (Net) 0% • Something I saw in a store/office • Something on a package, flyer, or brochure While becoming aware While researching While preparing to of a specific brand various options purchase
Telecom Sector Highlights1. Advertisements have more influence on subscription entertainment and TV/Internet services than on any other category.2. People more often seek advice from informed acquaintances for telecom subscription services than in any other category.3. Rewards are effective drivers for mobile and cable subscription services, both for customers making the recommendation and for those receiving the recommendation.
Purchase are Influenced by Recommendations Much MoreThan Advertisements % of purchases influenced by recommendations or advertisements (net) by category Recommendations Advertisements (NET) Mobile Phone Service TV/Internet Service 31% 34% 33% 35%40% 40% 29%30% 30% 19%20% 13% 20% 26% 5%10% 10% 20% 21% 0% 0% 13% While becoming While researching While preparing While becoming While researching While preparing aware of a various options to purchase aware of a various options to purchase specific brand specific brand Entertainment Subscription 33% 31% 40% 38% 20% 12% 27% 28% 0% While becoming While researching While preparing aware of a various options to purchase specific brand
Rewards are Effective Drivers for Both Referrers and Referees % of purchases influenced by recommendations where the… …Recommender got rewarded …Recommendee got rewarded Mortgage/Line of Credit 9% Personal Banking 17% Wireless Service 8% Cable TV/Internet 15% Personal Banking 8% Wireless Service 8% Cable TV/Internet 7% Mortgage/Line of Credit 7% Personal Care 4% Vacation Travel 5% Personal Health 4% Subscription… 4% Apparel 3% Personal Care 3% Vacation Travel 3% Personal Health 3% Subscription… 2% Consumer Electronics 2% Consumer Electronics 1% Apparel 1%
More People Seek Advice From Friends and Family forSubscription Services Than 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 58% 25% 17% A subscription service (e.g. phone service, TV service)
Percentage of Purchases Influenced by Recommendations % of purchases influenced by recommendations given by each Mobile Phone Service TV/Internet Service Family/Friends… 77% Family/Friends… 73% A friend 34% Other family … 38% Other family … 26% A friend 30% Spouse/Partner 22% Spouse/Partner 9% A sales… 19% A sales… 27% A co-worker 14% An acquaintance 5% An acquaintance 3% A co-worker 4% Someone else 4% Someone else 6% Entertainment Subscription Family/Friends (NET) 85% A friend 49% Other family member 34% Spouse/Partner 11% A co-worker 15% A sales person/clerk 3% An acquaintance 2% Someone else 3%
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.• Even though advertising has a high level of influence on consumers in the TV/Internet and subscription entertainment categories, the influence of advertising declines dramatically the closer consumers get to a purchase decision.• Telecommunications purchases are more highly influenced by recommendations from family and friends rather than industry experts.• Verbal referrals are significant driver of new customers.• Your most valuable customers might be ones who refer you. Do you know who they are?
Telecoms Shifting Focus to Retention & Smart Acquisition 2000-2008 GROWTH in wireless, prepaid sectors 2008 - Present SATURATION Next? DEFEND MARKET POSITION ACQUIRE THE RIGHT CUSTOMERS WATCH OUT FOR THE NEWCOMERS!Confidential & Proprietary Information
This is what we know*• 5 referrals per referrer• 30 impressions per referral• 1 new customer per active referrer• Verbal referrals convert at the highest rate, followed by targeted emails*Aggregate results based on 10 years’ experience in the telecom industry.
“40% of purchases are influenced by a recommendation”• Be present where your customers are. – Social networks. – Online portals. – Mobile devices.• Catch verbal referrals. – 90% of recommendations that lead to purchase are face-to-face.• Give them a reason to share. – Differentiate with a meaningful and brand-appropriate thank you.
Get All Your Stakeholders Talking Give customers and employees something to talk about. Commissioned and non-commissioned employees need different programs.Confidential & Proprietary Information
Use the Channels That Resonate Verbal Facebook, Twitter LinkedIn Email Personal URL …
Tie the Incentive to the Purchase Incent customers to share with brand-appropriate incentives. Motivate their friends and family to respond with product/brand-appropriate rewards. Reward customers for opening up new business opportunities in other product lines
Keep the Fuss to a Minimum KISS: Reduce the need for IT, Brand, Legal, and Creative involvement.
Know What’s Going On• Monitor program KPIs.• Watch for suspicious activity. It happens – be on top of it.• Know who your advocates.• Know the $ value of your social recommendations.• Can you Prove Social ROI? You bet ;)
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
Contact Alexandra Best VP Marketing RewardStream firstname.lastname@example.org 604.282.7549 Connect with us! Facebook.com/RewardStream Twitter.com/RewardStream