Dan Hunter has transitioned himself from a very good CPG marketer into a leading mind of Canada's research community as a partner at IMI International. Dan is also a former colleague from my Procter & Gamble days, so I was happy when he accepted my invite to speak at our recent Word of Mouth Conference on the powderkeg topic of measuring peer generated media and word of mouth.
1) Measurement of any marketing tactic has come under greater scrutiny over the last few years, are we getting better as an industry?
Yes, I believe we are getting better as an industry. First the differentiation between below the line and above the line is rapidly blurring if not disappearing all together. There are two implications to this change in thinking: i) All marketing executions are perceived as valuable and ii) Measurement of all brand activation techniques including Word of mouth is important. As integrated campaigns with 360 degree of touch-points are implemented, managers are asking themselves what the impact is from each and what the appropriate expenditure against each is. At IMI, we measure all marketing activity using the same metrics and use dollars as a common denominator. With a database of over 8,000 case studies we are in a unique position to provide our clients with ROI on all their brand activities including word of mouth. We know our clients are asking the right questions with regard to measurement and asking the questions is leading to new and useful solutions.
2) Word of mouth is a particularly tricky one since its frequently spontaneous, any trick on how to measure it?
A brand's health is a sum of its in-market activities. At our WOM conference, Rushkoff used a bookstore analogy with the two buzz camps referred to as Fiction (the mythology that brand advertising creates) and Non-Fiction (news stories, customer service experiences, product satisfaction etc). The salient buzz (positive or negative) can be tracked by search (outbound) and from recipients (received, recalled) through consumer research. Using multivariate techniques the source of that awareness can also be identified which leads directly to evaluating the “buzz” from specific marketing initiatives as well as consumer trial and interaction with the company. This measurement is significantly enhanced with a historical database that allows the 'self-statement' bias to be comparable and provide some context of the self-stated information. The impact of the “buzz” when measured can be related to the dollars spent to achieve it leading to valuable ROI for the marketer. If the salient good and bad news 'buzz' surrounding a brand is measured a more holistic view on why brand equity measures are up down, or whether consumers are being driven to purchase, over a given time period is achieved.
3) What are the key metrics people should be looking at with a word of mouth experiential campaign? Any differences between online vs. offline-driven campaigns?
Clearly, an experiential campaign will have
to consider quality of impression' or impact in order to justify its budget
compared to mass marketing. The trick is to isolate the change in
attitudes and behaviour that are driven by the experiential marketing campaign as a good start,
and then understand recommendations made from attendees, and received and
recalled messages to non-attendees as potential recipients of
Word-of-Mouth. They can provide both the 'what' is being said and 'how
much' to size it compared to other similar campaigns. The
depth of change on the key metrics will differ across categories; Instant
consumables can have greater purchase change in the
short-term versus hard-goods or long purchase cycle items. Regardless
of category, however, do not forget to consider the efficiency driven
by WOM: Our studies clearly show that consumers who hear brand
activation details through WOM are more likely to a) understand and b)
participate as a result of the info, versus those that did not hear it from
WOM. As to the difference between on-line & off-line campaigns, the
content and key metrics need to be comparable, although information from
on-line is much easier for the consumer to acquire. To measure the impact
whether on or off line, the techniques must be the same to drive
4) Most companies don't profile their customer base on their referral value - is these a more effective way to value the importance of CRM or direct audience based on word of mouth value not just loyalty and consumption?
The implication from your question is
powerful: the more that is known about the database the better the
database can serve the interests of the company and the more the company can
serve the interests of its customers. Word of mouth is just one of a
number of variables that can be collected and used to the company’s and
customer’s best interest. Knowing the habits and tendencies toward positive
word of mouth among members of the database allows the company to direct
specific programs at these customers who will then act as advocates in their
social network. Similarly knowing the tendency toward negative word of
mouth allows the company to communicate with these specific individuals to transform
misperceptions and change brand detractors into advocates. Well
designed customer marketing databases allow the brand group to know the
cost/time to acquire new customers and the lifetime value of new
acquisitions—this provides a framework on how to value the Word-of-mouth
behaviour. I strongly suggest a "what's in it for me' to incent on
referral habits (sometimes recognition is more than actual rewards), especially
when the WOM advocate and its recipients transactional behaviour can actually
5) In Canada, budgets are often under pressure given the size of the market, are there any benchmarks on what percentage of budgets people should be allocating to researching their efforts?
A general rule of thumb is to set aside 10%
of your marketing budget for new learning. Some methods I used in
my CPG marketing days to stretch budgets were to i) have the big
brands in the portfolio fund most of the budget, on shared
initiatives, and ii) measure things like ExM and WOM as parts
of integrated programs. Quite often the increased sample size for a strong statistical read on the impact of these elements on top of
an existing project is fractional, and well worth the new learning. I've
also 'Dollarized' the huge benefits achieved in-market for the small cost
outlays made; CFO's tend to love pay-out scenarios.
6) What are some of the surprises you have found in your word of mouth research that you might now have suspected?
The Canadian success story of Tim Horton's
Roll up the Rim to Win continues to astound me--I hope most Canadians know the
uniqueness of this program: we don't see this level of success in other
geographies in which we work. In IMI’s ConsumerTrack™ , we learned that almost
everyone knows about the annual Tim Horton’s campaign, but what is incredible
is 72% of aware consumers heard about RUTRTW through some form of unpaid
media or buzz!! That includes 61% from word of mouth from friends, family
or contacts. If Tim Horton's was a client, I would recommend a dramatic
cut to their mass advertising budget...
7) There are some people who believe tying benefits of word of mouth initiatives back to sales is difficult to achieve and perhaps unfair given the different levels of secondary value you get - content, loyalty, support, insight - what's your position?
Word of Mouth Marketing is not alone in this
struggle to link to sales. Our fundamental approach is to look at both
the media value and the residual gain to brand equity based on its
content. First, let's look at WOMM (word of mouth marketing) from its media value: You
need to isolate WOM into a 'campaign' (or an aspect of a campaign), and
then specifically link changes in attitude and behaviour as a result of this
outcome--this allows you to specifically value it, and compare it to
the other like campaigns, or across other traditional tactics impacting
the brand. Next, consider its impact on brand perception--if you can
isolate the media, you can collect the messages as well, both
positive and negative. This measurement can be valued ("I
spent this and I got that") and turned into insight and quick action
to steer your brand from the direction of your most valuable assets: