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Power of C2C Recommendations for the Telecommunications Sector

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Power of C2C Recommendations for the Telecommunications Sector

  1. 1. The Power of Consumer-to-ConsumerRecommendations in the Telecom Sector
  2. 2. 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.
  3. 3. Speakers Alexandra Best VP Marketing RewardStream
  4. 4. 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
  5. 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 amberlie.denny@rewardstream.com
  6. 6. Dynamics Facing Telecom Marketers
  7. 7. 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)
  8. 8. “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
  9. 9. 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
  10. 10. Do You Know Who Your Conversation Catalysts® Are?
  11. 11. 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
  12. 12. No. The value of any onecustomer does not reside solely in what that person buys.
  13. 13. 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)
  14. 14. 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
  15. 15. Results
  16. 16. “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
  17. 17. Word of Mouth: The Keller Fay ReportGeneral Findings
  18. 18. 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?
  19. 19. 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.
  20. 20. 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.
  21. 21. The Overall Importance OfPersonal Recommendations
  22. 22. 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%
  23. 23. 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%
  24. 24. 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%
  25. 25. 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
  26. 26. 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
  27. 27. Word Of Mouth:Findings For The Telecom Sector
  28. 28. 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.
  29. 29. 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
  30. 30. 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%
  31. 31. 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)
  32. 32. 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%
  33. 33. 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?
  34. 34. Great programs have good bones
  35. 35. 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
  36. 36. 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.
  37. 37. “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.
  38. 38. Get All Your Stakeholders Talking  Give customers and employees something to talk about.  Commissioned and non-commissioned employees need different programs.Confidential & Proprietary Information
  39. 39. Use the Channels That Resonate Verbal Facebook, Twitter LinkedIn Email Personal URL …
  40. 40. 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
  41. 41. Keep the Fuss to a Minimum KISS: Reduce the need for IT, Brand, Legal, and Creative involvement.
  42. 42. 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 ;)
  43. 43. 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 amberlie.denny@rewardstream.com
  44. 44. Contact Alexandra Best VP Marketing RewardStream alexandra.best@rewardstream.com 604.282.7549 Connect with us! Facebook.com/RewardStream Twitter.com/RewardStream

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