Dit artikel verscheen in het Tijdschrift voor Marketing in November:
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Category: Blog
Returning to the WOM
Advertisers and marketers are readressing the value of good old-fashioned word-of-mouth referrals and increasing budgets in this area are reflecting this change. So how can WOM be better used to boost sales and drive awareness, retention and brand loyalty?
Jake has written this article for Marketing Magazine and the full article can be read on the Stoppress website: Continue Reading…
#7 10 years to become an overnight success
John Travolta once said “it’s taken me 10 years to become an overnight success”
For years the Ivy arguably the most successful restaurant in London was unsuccessful – we spoke to one of the old managers there and found out how they turned it around.
Introduction – Restaurants should have WOM right, right? Wrong?
Restaurants are one of the ultimate Word of Mouth case studies – chefs and owners often pride themselves on their food being so good that they don’t have to advertise. Well Gordon Ramsey, among others have shown that beneath the facade of bright lights and smooth wooden surfaces lie not only profit challenges but a hit and miss approach to word of mouth.
The Manager of the Falls Restaurant (itself a fusion of informal formality with stunning food) gave us the inside track:
Alan Parry told us a story of the Ivy’s original owners, Chris Corban and Jeremy King, and their first famous venture, Le Caprice. Now the official History of the Ivy and Le Caprice can be read on their website – it does not read like the true story…and it isn’t) of this piece but the unofficial story holds the gems:
- The owners refused to advertise for years, they wanted to rely on Word of Mouth – which it expected to ‘just happen’ because the food was good
- For years it remained quiet
- You see if you rely totally on your regular customers to ‘expose’(the first step of our model) ie make people aware of your products and don’t treat them as team players, they won’t help you
- If you have no other ‘exposure’ tools – any form of PR, communication etc – well you are doubly exposed as you can’t do the basic model – Comms – makes people aware and Referrers convert to customers
- Referrers won’t help you if they don’t feel that you need your help – too many companies are afraid to ask or do it in the wrong way with ‘get us a friend’ models
- Generally speaking – 9/10 you can get the vibe if someone is a fan of you or not – they will be only too glad to ‘expose’ your product but they need to know you need it or they assume you are ok
- Le Caprice wallowed for 2 years and nearly went under – it’s ‘the food speaks for itself’ thing was a gamble – it could have worked but it didn’t
- They had no Referral Marketing Plan in place and they weren’t asking for ‘help’ in the right way
- A lame example of this is the sign “if you think we are good tell others” – why would I tell others if you haven’t made me feel important or enrolled, it’s just a sign
- In TVS terms –Chris and Jeremy refused to expose itself using our model and especially through it’s Top Referrers – it had nothing in place to do that
- Furthermore like most ‘jazzy’ restaurants – they focus on the famous as opposed to ordinary fans – and the famous are fickle…luckily however
- One day Mick Jagger’s PA rang up and said to the owner – Mick wants a pumping restaurant is that you?
- The owner pluckily said yes she’s heaving. Sweating he put down the phone, rang all his mates and in a panic said get here I’ll give you food for free
- When Mick and his entourage the restaurant was pumping with his ‘team players’ his mates and Mick was happy
- They never looked back. Soon they started The Ivy then a few years later J. Sheekeys. All three were in Zagat’s 10 most popular restaurants. – it has been a success
- You can’t book a table in The Ivy – there are too many Tom Cruises, Madonna’s, Guy Ritchies (thought not at the same time) and Paris before you
Our Conclusion – use ‘Buzz’ with TVS system’s superconductors
In reality a lot of what gets called PR – is buzz, a superficial intense burst of activity with influencers followed by nothing
The mistake is to assume celebrities are the only influencers in the world – they only influence other celebrities – the trick is to use ‘superconductors’ and celebrities. Think of celebrities as ‘awareness’ and superconductors as ‘converters’ of the aspirational people. A superconductor is one of those people who has a wide network in many different worlds. They aren’t just the ‘connectors’ but the ‘connectors’ of the ‘connectors’.
You can only get to superconductors if you map your Top Referrers Social Networks….more of that in Wordvine 2.
Here is an example of a superconductor with his name changed:
Lavoir is a French DJ who lives in NZ but tours in Europe and Tahiti. He is multi talented – he is highly respected in the DJ world by other DJ but his music is far from mainstream. He has a unique mixture of skills and started working in digital TV in the UK right at the start where he learned TV production and how to use design in the right way to pull in audiences. He is a superconductor because he connects:
- The world of top DJ’s
- The world of Entertainment
- The world of Graphic design
- The World of France with the World of NZ
By enrolling Lavoir you suddenly have a key influencer in 3 worlds not just one. He is not fickle and knows what he wants
We’ve told you about Top Referrers – would you like to know the system to identify Superconductors? This is our new love for this weeks blog!
[poll id="10"]
With many thanks to Alan Perry at The Falls restaurant for this story – we refer their environment food and informal, formality.
#6 MD Cadbury replies to Jake’s email
Jake received this amazing reply from Mark Callaghan, Cadbury’s Managing Director Aust & NZ, when Jake sent him an email about our blog post #4 regarding Cadbury’s referral marketing strategy. That is what we call great Connection:
Dear Jake,
Thanks for getting in touch, and please accept my apologies for the delay in coming back to you. As you might have guessed it’s been a fairly hectic couple of weeks for the business! I also wanted to thank you for giving us a ‘right of reply’, something that not everyone in the media has been prepared to do of late.
I guess the first thing I would like to get across is that we understand that changing something that is as well known, and as well loved, as Cadbury Dairy Milk was never going to be an easy process. However, I do want people out there understand why we did it.
Essentially, we decided to change Cadbury Dairy Milk for two main reasons: firstly, to make our chocolate slightly softer to bite; and secondly, to ensure our chocolate remained affordable. Both of these changes were actions our research showed that consumers clearly wanted.
The reality is also that the price of key ingredients, such as cocoa, has skyrocketed over the last two years. Much of this has been driven by speculative investors looking for short-term financial gains in commodities at a time when established equity markets are not delivering the returns they once did.
For confectionery manufacturers like Cadbury we have to live with the after-effects of this activity. Cocoa is our key ingredient, something we don’t use as financial hedge, rather as the foundation for all the chocolate we make.
For most of the last 2 years, in which cocoa prices have doubled, our business has taken this on the chin. We’ve soaked up the price hikes whilst trying to minimize the cost impact to consumers.
Of course, all good things come to an end. Faced with ongoing price rises of key ingredients, increasing labour costs and regular inflation we reached a point where, despite our best efforts, the price of a block of chocolate was reaching $5 in markets such as New Zealand. For many Kiwi families this took Cadbury Dairy Milk over the threshold of what they regarded was ‘affordable’ for a treat such as chocolate.
So as a business we had to change our approach – you can’t simply ignore the evidence that your flagship product may be going ‘out of reach’ for the everyday shopper.
Now let me tackle one of the central accusations head on: We’ve downsized our product to boost corporate profits and fleece the consumer. Simply untrue!
Like some of our competitors we could have reduced the size of our Cadbury Dairy Milk range without dropping the price. We could have claimed our product downsize was ‘portion control’ designed to respond to concerns around obesity, whilst keeping prices constant. We decided not to because we thought there was a better, more honest way of facing these issues.
As a business we thought it was better to reduce the size of Cadbury Dairy Milk, yes to decrease our exposure to expensive ingredient costs at a time when all business costs are under close scrutiny, but also to ensure that everyday consumers could still afford to buy our product. So we reduced the size of our blocks and the price we charge retailers and in doing so we have tried to do the right thing both as a business and by our consumers.
I am sure that you will understand far better than most that it would be commercial suicide for a company such as Cadbury to make all of these changes without considerable thought; and I can assure you that we tested and re-tested consumers throughout New Zealand and Australia to ensure that the changes we made to Cadbury Dairy Milk would be liked by the vast majority.
Despite the current uproar, I am confident that the overwhelming majority of people out there will continue to love our chocolate and I hope, in time, will better understand and appreciate the reasons why we made these changes.
Regards
Mark
Mark Callaghan
Managing Director – Aust & NZ
636 St. Kilda Road
Melbourne Victoria 3004
#5 Twitter – should we be on it?
“My CEO and colleagues are asking me – should we be on Twitter?” We had this question twice last week we suspect they are not alone?! First up let’s follow the real live case study from NZ’s most trusted brand and acknowledge some great comments from Jonathan and Richard summarised as follows:
Great Comments in relation to why has trust in corporate gone down?
Thanks so much for the comments. Richard is saying that WOM is working precisely because companies are not wanting to connect with society and from what JR is saying a lot of that is to do with being too busy making money – pressure.
Yet that pressure comes from where society so – the conclusion is that corporate aren’t engaging with society because society wants them to make money. Circular?
Let’s see how this plays out with Cadbury shall we? We can test the hypothesis.
Cadbury
67% of you thought that companies, in general, no longer nurture relationships with society. That is why trust is dropping. So let’s look at how Cadbury responded – we were coming from a place of wanting to give a right of reply – as we are on the side of corporates clearly!!! (well most…)!!!
We have sent an e-mail to Mark Callaghan – Managing Director of Cadbury. Having struggled to find their details (their website avoids individual head office people’s details http://www.cadbury.com.au/About-Cadbury/Contact-Us.aspx) we decided to call and we got through to Andrea his PA. She did what a good PA should do – “I won’t give his work e-mail but send it to me”. This (‘privacy’) issue is tricky now – should she have done so (?) – her job is ‘protect him’. However should this policy change (?) – especially since – one minute later on linked-in we had it figured (and we wouldn’t be alone) since linked-in is the second fastest growing social network site.
So for those of you who attended our course – where the ‘involvement’ pillar was key – what impression of ‘making it easy to hear from the consumer does this convey?’
[poll id="8"]
Twitter – should we be on it?
One of our community has been asked by her CEO “Should we be on Twitter? It’s a risk because they might say bad things about us” says her CEO. (No we won’t be naming who even if you pester us drunk ok?)
Well we will continue this next week – but first up we need to be clear as to the motivation for being on twitter before we answer the question:
[poll id="9"]
Some examples:
For 1 – Media Companies like CNN, BBC and others are using it as a channel for awareness/traffic
For 1 – High Profile Individuals http://twittercounter.com/pages/100/0
For 2 – Companies are being ‘forced to’ in the US – locally Telecom has a formal twitter team and Vodafone has an informal one (http://twitter.com/telecomNZ)
For 3 – Sales Generation – mainly independent ‘mini-preneurs’ – connecting with individuals in corporate or selling DIY products/IP
For 4 – The big question – there is little data on this – we’ll let you know next week – we are digging.
See you next week!
Jake and Cornelis
#4 Why has trust in corporate(s) dropped off?
Thanks for all your votes.
Let’s give Cadbury a chance shall we – we thought we’d give Cadbury the right of reply so we will be e-mailing this link to them – specifically the Marketing Director of Australia & NZ.
It seems that the first majority of us think that Cadbury are up to some sort of mischief. Over 90% of voters think that Cadbury are sneaking in a way to make more money and getting it under the radar.
Consumer trust in corporate(s) plummeted in the 90’s at the same time as corporate spending on ‘being good citizens ’ went exponential – for the first time marketing had truly failed.
In judging Cadbury – We are being like consumers – viewing corporate(s) as self serving and evil:
- Are you evil?
- Is your company evil?
We suspect you would say no – and yet when looking at another organisation we seem to judge them differently to ourselves. Why is this – it’s very important – it undermines the importance of Referral Marketing of course but you’d guessed that already. When advertising first started – advertisers were genuinely viewed as great citizens – allowing consumers to navigate away from ‘rip-off’ merchants to companies who were successful enough to advertise. (Source Permission Marketing – Seth Godin). It was P&G’s mastery of this evolving medium in the 40’s that gave birth to the current model as we know it.
The Yankelovich report of 2006 shows that as corporate spending on being ‘seen to be good’ went exponential so too:
- Consumer trust in corporate (s) plummeted to an all time low at the same time as advertising spend on ‘being good’ went exponential
- In fact the University of Chicago showed that we trusted religions, governments – in fact everyone less.
- In other words we didn’t believe the million dollars in advertising telling us how nice corporate(s) were.
Marketing – for the first time in history had truly failed. We, the marketing community could not persuade people anymore. The reason? Well the one cited in the Yankelovich report is that essentially we spent more time on interactive media than broadcast media so messages didn’t get through. That explanation just seems too simple, too superficial and ultimately it leaves us (marketers) feeling powerless – doesn’t it?
Why has trust in corporate(s) dropped off – have marketers failed or are corporate(s) more evil?
What has changed, really, really, really? Take out the it’s harder to reach people argument – Let’s pose another hypothesis – has trust dropped off because
corporates are inherently less trustworthy? Less responsive? Less caring? So in fact all the spending in the world could not mask the ‘evil corporate’ because their day to day behavior was at odds with their claimed values.
That argument doesn’t work either. The motive of most companies has not changed in this century or the last – to make money for their shareholders. Of course some companies will take more risks than others and some are more greedy than others – but really nothing has changed.
[poll id="7"]
It will be interesting to find out where we sit on this – and for you to reflect on the importance of Referrals more than ever. At the risk of ‘jumping the square’ – we’d like to get a broader feel on this for the community – so please forward it to a friend who might benefit from the answer.
Many thanks
The Anglo-Dutch TVS
Best
Jake & Cornelis
#3 Will WOM and WOW out Cadbury?
Cadbury have reduced their 250g Dairy Milk by 20% and are still charging the same. Or will they get away with it? What would you do if your CEO said we’ve got to reduce costs – here is a fait accompli now find out how to market the change. Would you try and sneak it under the radar or announce it? If you sneak it you might not get ‘out-ed’, if you announce you will get a backlash.
How do you mange it then?
Rounding off the GM Conversation:
So first up the GM poll:
- 80% say they will go under
- and 20% say they will float and survive
Either way – what is clear – for those who have been on The Village Square Wordvine Level 1 Course that a key issue for GM, as underlined by the US President was that they lost touch with their market. What we are keen to impress upon marketers is that the true value of setting up a Referral Marketing Network is not just about Referring but more accurate, cheaper and deeper research.
How much do you spend on Market Research? Well take all the qual budget and use it to set up a Referral Marketing Network – that’s one way to fund it.
Cadbury sneaking or putting the consumer first? Here are some facts for you to consider:
Cadbury:
- reduced the size of the 250g Dairy Milk bar by 20%
- reduced the cocoa from 26 to 21% in Australia and NZ
- they have also increased the oil content
- Cadbury were most recently voted most trusted brand in NZ
If you heard about this via WOM with nothing else
[poll id="6"]
Cadbury claims that:
- Consumers want chocolate that is easier to eat ie less crumbly
- Hence the chocolate chunks are smaller
- And the oil added makes it easier on the mouth
Whether this is true or untrue is not the key learning here. The key learning is that most people will hear about this via the increasingly adverse consumer reactions to the change. In fact a website has been set up to put pressure on Cadbury to change it back – in addition to a twitter feed.
It will be interesting to see how Cadbury manages this situation and to see what the impact will be on their perception of trust.
We look forward to seeing your votes.
Jake & Cornelis
#2 How do you Word of Mouth around a tattered and battered reputation
– for example General Motors’?; see poll below.
Ande MacPherson from MediaWorks in Auckland, New Zealand won our surprize (yes that is the correct spelling) for his link to the youTube video – one guy starts a dance party, it shows the power of WOC (Word of Cell). Ande gets a secret time saving device which provides a window into the future…..
Before we let you know the “right” answer, please answer the question below:
[poll id="5"]
The answer is of course “something else….” They can’t do that something else at the moment and any of you who have been on the Referral Marketing Course should know the answer. What they both should have done is use it as an opportunity to show off their record of accuracy to demonstrate the steps they have taken to ensure it will never happen again and spread that message with top referrers. The outcome being “wow, I know they have stuffed up, but I had no idea they had such a great track record and I appreciate their honesty and admitting their stuff up”.
Of course you can’t do this unless you have built a network of, please repeat after us, TOP REFERRERS!
Here is this weeks poll:
So far we have talked to people about using Referral Marketing to increase sales and inquiries. Of course we have not even talked about the application of Word of Mouth for reputation management on an ongoing basis. This is particularly relevant for larger companies like banks, utilities companies and car manufacturers. So in relation to General Motors, how could they get people differently about GM. Currently the talk is, will they go bust or not.
[poll id="4"]
Andy Sernovitz at the Great WOM Marketing Experiment
Andy Sernovitz is the Founder of GasPedal and the author of Word of Mouth Marketing, the book that is also used for the Great WOM Marketing Experiment. More about this world’s first experiment can be read on the WOM Experiment Page. Andy was the first of our two speakers. Here is his speech:
[MEDIA not found]Joseph Jaffe's speech at the launch of the Great WOM Marketing Experiment
Joseph Jaffe was the second speaker at the launch of the Great WOM Marketing Experiment. Joseph is the expert in the field of Conversational Marketing and he was on holiday in the Bahamas, so he talked to us from his hotel room.
[MEDIA not found]
