Chapter 7 – Social Media and WOM Marketing

Estimated Reading Time: 14 minutes

Every year businesses in the United States pay billions of dollars to agencies to create colorful, clever, attention-grabbing marketing and advertising campaigns.[1] Although these expenditures are essential to success in the modern business environment, the most trusted forms of advertising are far less elaborate; namely, recommendations from personal acquaintances and opinions posted by customers online.  According to the “2012 Nielsen Global Online Consumer Survey,” 92% of consumers surveyed reported that they trust recommendations from people they know. Going further, a slightly lower but still impressive 70% trusted consumer opinions posted online.

With numbers like that, it’s no wonder that word of mouth is a hot marketing topic.  As consumer trust in conventional forms of advertising continues to decline, here has been increased attention in marketing circles toward marketing tactics that can address this tendency to trust opinions of acquaintances, peers, and other consumers.    The trend has been inspired in no small part by the emergence of new social media technologies that enable marketers to engage with these potential recommenders and to monitor and measure their sentiments.     This chapter will examine these new social media tools, the opportunities they create for marketers, and the connections between social media and word-of-mouth (WOM) marketing.

Social Media

The term social media refers to a broad array of tools and technologies that turn online communications into interactive dialogues.  These tools fall into multiple categories.  The most popular are:

Blogs – A blog (an abbreviation of the term “Web log”) is an online journal that is frequently updated and intended for public consumption.  Blogs are defined by their format: a series of entries posted to a single Web page in reverse chronological order.   A key social aspect of blogs is that they include the option to allow readers to leave comments.  In addition, bloggers frequently include links that enable readers to connect to other blogs.  Blogs exist on just about every topic under the sun.  By the end of 2011, there were over 181 million blogs around the world, up from 36 million only five years earlier in 2006.[2]

Social Networks – Social networks are services, platforms, and sites that focus on building online relationships and communities.  This usage is an online extension of the social networks that exist among humans, a concept that was popularized by twentieth-century sociologists.   Social networking services enable people to share recent activities, opinions on popular culture, photos, dating or job status, and many of life’s other myriad details with their friends and colleagues.  Facebook and LinkedIn are two of the more popular social networks out of hundreds in existence.

Microblogs – Microblogs are posts of very short entries or updates on a blog or social networking site.  The short format fits well with the use of smart phones, where longer entries are tedious to type, and users can post on location  Most microblogs have tags and identifiers that make it easy for users to subscribe to a particular microblog – known as “following” – based on author or topic.  Twitter is far and away the most popular microblog.

Photo and Video Sharing – These are services that enable users to post photos and videos with relative ease.   These services give the posters control over whom they share the photos or videos with while enabling the viewers to comment on the photos and videos.  YouTube is the leading video sharing service in the world, and catalyzed all sorts of short videos “going viral” – reaching millions of viewers.

These four categories of social media are only scratching the surface.  There have been literally hundreds of sites and technologies that classified themselves as social media.  Some are merely on the periphery, rebranding themselves to take advantage of the social media craze. Others are hybrids – or mashups, to borrow an in-vogue term from social’s Web 2.0 cousin – that combine two or more social services, such as Pinstagram, which combines the Web photo sharing site Pinterest with the mobile photo sharing site Instagram

In today’s intensely competitive and ever-evolving business environment, it is essential that we consider how to leverage these technologies as marketing tools.  How can we utilize these new media forms to learn about our existing customers, reach new ones, and engage with them?  Blogs are where people speak about their interests, beliefs, and opinions on the products they buy – a no-brainer opportunity for market research.   Many bloggers become influential through their writing.  As such, they are influencers whom we need to target in both PR and word-of-mouth marketing efforts.

Social networks are communities where people socialize with friends and connect with other people to share common interests.  In these networks, people demonstrate who they are by whom they associate with.  They express their interests in order to attract others.  Marketers can leverage this information, either by observing these people’s behaviors or by participating in the community.  Warning: If your company or brand is looking to participate in a social network, it is very important that the participation be well thought out and appropriate, lest your brand be shunned for crashing the party.   Many CEOs of business-to-business product companies, for example, have insisted that their company create a presence on Facebook, which is not a business-oriented social network..  This can be the equivalent of your parents crashing the party.  Everyone wonders what they are doing there.  Consumer brands, on the other hand, are learning how to use Facebook to promote their products.

Moving on to microblogging, the word that comes to mind is broadcasting.  Twitter — which, let’s face it, owns microblogging — allows companies or employees to broadcast anything from opinions and comments on other users’ posts to promotions and alerts about significant events – press releases, product launches, upcoming webcasts, event appearances, almost anything.  , Clearly, then, microblogging represents yet another medium for companies to broadcast themselves.  Of course, Twitter brings you additional capabilities, such as the ability to gain followers and keep a count of their numbers.  You can monitor Twitter for people who praise or condemn your product by “tweeting” to your identifier – either your “handle” or a tag called a “hashtag” that is associated with your product or company.  (“Tweets” are individual comments; they are limited to a maximum of 140 characters.) Tweets can be quite useful for finding and mollifying unhappy customers or influencers.  PR agencies use Twitter to follow reporters they are interested in influencing, monitoring their Tweets to stay on top of what they are researching or writing, or simply to flatter them and curry favor by sending private messages or rebroadcasting their articles.

Many companies have also taken advantage of YouTube to promote their products or services.  The simplest way to use YouTube is to post useful videos, typically informative or “buzz worthy” with descriptive titles containing relevant keywords.  Videos posted to YouTube have high search ranking, which accomplishes YouTube’s original mission – the easy sharing of video content.  Thus, as with microblogging, this medium lends itself to word-of-mouth marketing.   In fact, some companies have created their own channels, treating YouTube like a community and trying to garner a following.  Others have created full-blown advertising campaigns specifically designed for YouTube and intended to create a following. My favorite example is Blendtec’s “Will it Blend?” series on YouTube, where CEO Tom Dickson demonstrates the power of his company’s blenders by “blending” skis, hockey sticks, 2×2 lumber, and even an iPad, among other things.  The series has been viewed over 100 million times, landed Dickson on The Tonight Show with Jay Leno, and according to Dickson, drove a significant increase in sales.

As existing media forms are improved and new forms are created, the social media landscape inevitably will change.  Facebook is dominant today, but who knows who will be the dominant provider in 10 years?  It doesn’t seem that long ago that MySpace and Friendster were the places to be.  Just as these tools were supplanted by Facebook, some novel technology may come along to make Twitter look tired.  Marketers, therefore, must adopt a two-pronged approach to social networking media.  On the one hand they need to appreciate the capabilities that these media offer and look to leverage them in the marketing mix.  On the other hand they constantly need to be on the lookout for “the next big thing.”

Word of Mouth (WOM) Marketing

Word of mouth essentially refers to consumers providing information to other consumers.   Word of mouth is a pre-existing phenomenon that marketers are only now learning how to harness, amplify, and improve.  As Nielsen’s research and numerous other have demonstrated, having customers and consumers promote your products and services is highly effective. WOM marketing isn’t about creating word of mouth – it’s learning how to make it work within a marketing objective.

To spark this process and then manage it as part of your marketing mix, there are four common WOM marketing techniques you can consider.

Buzz Marketing – Using high-profile news or other programming to get people to talk about your product or brand.

Viral Marketing – Creating entertaining, informative, or sender/recipient-beneficial messages, designed to be passed along, typically via email.  The Blendtec videos “went viral” because people had to share them with their friends.

Community Marketing – Forming or supporting specialized communities (such as user groups and online forums) where consumers can discuss or promote your products or brand.  You can use social networking platforms to cultivate community marketing.

Influencer Marketing – Identifying key influencers who are likely to help form other people’s opinions.  This strategy may also include “product seeding” – giving products to key influencers so they talk about them, review them, or are photographed wearing or using them.  We discussed this strategy in Chapter 5 on public relations.

In his book The Tipping Point, Malcolm Gladwell effectively blends social networks and word-of-mouth marketing by looking at the types of people important to WOM.  He characterizes three types of people Connectors, Mavens, and Salesmen.  As the name suggests, Connectors are linked with lots of lots of people.  They typically have social networks (the original kind) that exceed 100 people.  Whereas Connectors link us up with people, Mavens link us up with ideas.  Mavens have deep knowledge of a subject (the word stems from Yiddish and means one who accumulates knowledge) and look to share it with others.   Mavens are the people whom you know, whose opinion you trust, whom you might consult about purchases such as the best wine to buy, where to go on vacation, or whether to buy a Mac or a PC.  Finally, there are the “Salesmen,” who have the persuasive skills to convince someone of an idea.

All three types are critical in what Gladwell calls “word-of-mouth epidemics.”  In a word-of-mouth epidemic, Mavens are data banks. They provide the message. Connectors are the social glue – they spread it. But there is also a select group of people – Salesmen – with the skills to persuade us when we are unconvinced of what we are hearing, and they are as critical to the tipping of word-of-mouth epidemics as the other two groups.

Creating buzz marketing is a little different from the viral marketing, community marketing and influencer marketing WOM marketing techniques above.  Mark Hughes’s Buzzmarketing describes buzz as “Captur[ing] the attention of consumers and the media to the point where talking about your brand or company becomes entertaining, fascinating, and newsworthy.”

Hughes should know.  While serving as the head of marketing at the online marketplace Half.com, he convinced a small town in Oregon to change its name to…Half.com.  The press ate it up.  It was outrageous – which just happens to be one of Hughes’s “six buttons of buzz.”  The other five are:

• Taboo
• The unusual
• The hilarious
• The remarkable
• The secrets.

In its day, Proctor & Gamble’s “Don’t Squeeze the Charmin” commercial featuring Mr. Whipple was taboo enough to spark conversation.  In 2012, energy drink producer Red Bull sponsored a skydive from the edge of the stratosphere – 23 miles above Earth.  Pilot Felix Baumgartner broke the jump height and speed record, and Red Bull got worldwide media buzz.  If you can craft a story that pushes one of the six buttons and feed it to the media, then you are on your way.

Getting a Handle on Customer Sentiment

Net Promoter

Net Promoter is a customer loyalty metric created by Fred Reichheld and publicized in his 2003 Harvard Business Review article “The One Number You Need to Grow.”   It measures the likelihood that customers will recommend –that is, promote – a given company or product.

The connection between WOM and NPS is encapsulated in the question NPS surveys ask: “How likely is it that you would recommend our company (or product) to a friend or colleague?”    Recall that consumers frequently purchase products based on the recommendations of other consumers.  From a marketing perspective, then, if your NPS indicates that customers would recommend your product to others, the question becomes “What can I do to activate this sentiment?”  Are you employing WOM techniques to get the word out, using these positive sentiment to your advantage?

The Net Promoter Score (NPS) is calculated by asking customers a single question: “How likely is it that you would recommend our company (or product) to a friend or colleague?”  Responses are scored on a scale of 0 (zero) to 10, where 0 is “Not at all likely” and 10 is “Extremely likely.”  Based on their responses, customers are categorized into one of the three groups: Promoters (9–10 rating), Passives (7–8 rating), and Detractors (0–6 rating).  The percentage of Detractors is then subtracted from the percentage of Promoters to obtain the NPS.  For example, if out of 100 customers, 20 are Promoters, 10 are Passives, and 70 are Detractors, then the NPS is -50 (20 – 70). Note that Passives are ignored because they neither promote nor detract.  NPS can be as low as -100 (everybody is a detractor) or as high as +100 (everybody is a promoter).

An important element of NPS is that Detractors carry a lot more weight (0-6 or 64%) than Promoters (9-10 or 18%).  Why is this?  The reason is quite simple.  People who are unhappy are much more likely to express their displeasure.  This is simply human nature, and customers can get really angry about bad service or a shoddy product.  In contrast, people have to be really pleased with a product to feel confident enough to recommend it to friends or colleagues.

NPS was a significant departure from typical satisfaction surveys that simply used an average score from 1 to 10.  These surveys fail to take into account two factors: (1) Detractors exert substantial negative power, and (2) people who weren’t extremely satisfied (delighted, some would say) really have no effect.  An NPS above 0 (a higher percentage of Promoters than Detractors) is considered good, and anything over +50 (showing a wide margin between Promoters and Detractors) is thought to be excellent.  If you are in negative territory, then you have work to do.

Social media is a great place for Detractors to vent.  Many bloggers write product reviews.  Others rant in tweets.  For marketers, then, staying tuned in to all communications channels and responding appropriately is critical. In his book The Anatomy of Buzz Revisited, Emanuel Rosen stresses the importance of listening to detractors and working to solve their problems. Rosen also tackles the problem of what he calls “secondhand detractors” – people who have never used your product but spread the negative views of others. Valid complaints, even spread secondhand, should be considered, of course. But Rosen suggests this is where an organization’s reputation, built over the years with the aid or PR and advertising, can be the “immune system” against this kind of negativity.

Monitoring NPS is straightforward.  A company sends out the NPS survey to its existing customers, so they will see the results.  Many companies monitor NPS on an annual basis and use it to drive strategy, product direction, and budget allocation.  We believe that the Marketing Department should own the NPS process, because Marketing ideally represents the customer’s voice to the company.  We will come back to this in Chapter 21 on metrics.

Social Sentiment

The only tractable way to monitor WOM is to monitor social media.  Fortunately, marketers have several reliable tools to assist them in this task.  Most monitoring tools work by searching social networks for mention of a particular product, company, or person and then reporting out on the number of mentions and their tonality, sometimes called social sentiment.  Some companies actively monitor and triage social media mentions.  Product complaints are handled first and get routed to customer service or customer support.  Remember, turning around detractors has a disproportionate effect on NPS. Questions on how to use the product get routed to customer support or product management.   People looking for product recommendations may get routed to sales or sent toward a known influencer outside the company.   Rants or unhappy influencers may be forwarded to the PR team for special handling.  Over time, by being connected to what customers are saying, working to address their issues, and activating the social network using WOM techniques, companies can influence social sentiment and NPS.

Social sentiment can be measured by comparing positive mentions to negative ones.  One widely used formula for performing this calculation is Net Social Sentiment (NSS).  NSS measures the “temperature” of the social conversation concerning your product, service, or company.   It uses actionable Internet mentions (AIM), which are mentions of your products, services, or company on social networks, forums, and blogs that you deem to have value to your organization. You may choose not to include, for example, forums that discuss the history of your product or company and tweets that only marginally concern your product. You also need to decide whether to include dedicated “hate” or “rant” sites.   Consider the case of Dell.  In June 2005, new media blogger Jeff Jarvis used the catchy phrase “Dell Hell” in his blog, The Buzz Machine, and Dell’s customer support issues were publicized two days later in The New York Times .  Rather than try to spin the news or brush it off as a PR black eye, Dell, to its credit, responded by implementing an entire social media program to listen to its customers and use social media to turn “ranters into ravers.[3]”

The formula employed by NSS is:

(Positive AIMs-Negative AIMs)

NSS=   __________________________

Total AIMs

The result is expressed as a percentage.  Figure 2 below provides an example of NSS monitoring from a high-tech company in Silicon Valley.  Notice that NSS plunges into negative territory on June 8, the day with the highest AIM volume for the period.  Why did this occur?  The reason is that the company released a product that contained numerous bugs that caused extensive customer problems.  In response, the customers took to social media to express their anger.  The company had to work hard both to fix the product and to communicate with customers via social media to eventually restore their NSS to positive territory.  Remember, these efforts involve influencing customer sentiment, and may take time before you see results.

Case Study

One of the best examples of WOM marketing comes not from this century or the last century, but from the 19^th century.  And, it happened in neither the United States nor Western Europe, but in Russia.  As retold in Linda Hamilton’s fascinating The King of Vodka, Pyotr Smirnov, father of the now-worldwide Smirnoff vodka brand (rebranded using the more popular French spelling), faced the imposing challenge of making his product stand out among the competition.  At the time, Moscow had hundreds of distillers, and vodka was available at almost all taverns.  Each tavern had its favorite distiller, and customers were used to drinking whatever brand they were served.  Although Smirnov was convinced that his revolutionary charcoal-filtered vodka was a superior product, he realized that he was going to have a hard time convincing people of that himself, tavern by tavern.

To address this challenge, in 1872 Smirnov crafted a highly unorthodox marketing strategy.  His efforts began in the Khitrov market, a grimy section of Moscow frequented by those newly arrived from the countryside who were looking for work.  It was a busy part of the city, with as many as 10,000 people a day moving through it and all of its pubs.  Smirnov went there to recruit a group of men who would become his representatives.

Smirnov took his small band of recruits back to his house, where he fed them and gave them vodka to drink.   The group was a collection of men from a broad range of neighborhoods in and around Moscow.  Smirnov informed them he would pay them to eat and drink vodka, on one condition –they demand Smirnov vodka everywhere they went.   If Smirnov vodka were not available – which at the time was true more often than not – they were to complain loudly and refuse any other brand of vodka that was offered.  When the manager came over, they were to ask him “How is it possible that your respected establishment does not have such a vodka?  It is absolutely the most remarkable vodka there is!”  They would then leave the pub in a huff and start the performance all over again in the next tavern.

As the story goes, Smirnov began getting inquiries from tavern managers the very first day.  Smirnov kept it up, having his word-of-mouth crew fan out all over the city until they had visited every drinking establishment in Moscow.  Once Smirnov had saturated the city limits, he sent his representatives on the rail lines, stopping at every station along the way.  It was said that news of Smirnov’s vodka ‘traveled like a virus,’ spreading his vodka throughout Russia.  Smirnov’s campaign was undoubtedly one of the earliest examples of “viral marketing.”

Smirnov did not limit his marketing efforts to his WOM methods.   He was, by most accounts, a marketing genius.  Indeed, he was an early practitioner/advocate of newspaper advertising, charitable donations in the company’s name, and award gathering for prestige – all tried and true tools of today’s marketers.

Learning More

• The Tipping Point: How Little Things Can Make a Big Difference, Malcolm Gladwell, Back Bay Books, 2002
• The King of Vodka, Linda Hamilton, HarperCollins, 2010
• Buzzmarketing, Mark Hughes, Portfolio, 2005
• “WOM 101,” Word of Mouth Marketing Association, 2007
• The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World, Fred Reichheld, Harvard Business Review Press2011)
• The Anatomy of Buzz Revisited, Emanuel Rosen, Doubleday, 2009