MackCollier.com

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The Changing Ways That Retailers Are Leveraging Influencers to Drive Sales

ShoppingI recently saw an interesting article that eMarketer had on how retailers are shifting their strategy for using influencers.  Most companies, regardless of industry, typically use influencers to help raise awareness of their brand or new product, etc.  This is a smart move to ‘get the word out’ about who you are, but over time it makes more sense to empower your existing and developing advocates to help tote that banner for you.

There are two shifts in thinking as it concerns retailers working with influencers that I think are worth mentioning:

1 – Retailers are increasingly repurposing unpaid content that influencers create.  This is just smart marketing, if an influencer gives your brand a positive (and unsolicited) mention, then point that out to others.

2 – Retailers are focusing less on reach and more on relevancy when it comes to working with influencers.  This is very smart, you’re giving up overall reach to instead get more reach with a more defined audience.  It’s the difference between connecting with an influencer with huge reach in the clothing industry, versus working with an influencer that doesn’t have as much reach in clothing, but who does have a nice footprint in clothing for teenage girls.

As with any efforts using influencers, I always advise clients that reach isn’t everything.  In fact, reach is never the first thing I look at, I always start with how engaged and connected they are with their network.  Would you rather work with an influencer with 100,000 followers on Twitter that never gets any engagement, or with an influencer with 25,000 followers that gets 50 replies a day?  I want to work with the influencer that has an engaged network that’s going to listen to what they say.

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The Passion Principle: The Secret to Creating Content and Marketing That Your Customers Will Love

PatagoniaSelling

Patagonia doesn’t market itself like your company does.  Patagonia spends almost no money on traditional advertising, and when it does, it typically does so in a way that makes its competitors shake their heads.  For example, a few years ago Patagonia ran an ad telling its customers not to buy its products.  Last year it sent a truck on a cross-country tour where seamstresses would not only repair your Patagonia clothing for free, they would repair any clothing, even if it was from a competitor.

Patagonia does everything it can to stop you from buying its products.  And its efforts have been a colossal failure.  The privately-held company is not only growing, it’s growing faster than its founder wants it to.

“I am faced with this ‘growth’ thing.  We could be a billion-dollar company in a few years, and it’s not something I ever wanted or even want.” – Patagonia founder Yvon Chouinard

 

“I’m Fast, and There Ain’t Nothin’ You Can Do About It”

Consider this broadcast commercial from Nike that debuted last month:

This commercial breaks two long-accepted beliefs of what makes successful advertising:

1 – The belief that people don’t like commercials. There’s been an entire cottage industry pop up around helping consumers skip or avoid commercials. Yet this commercial from Nike had over three million views on YouTube within the first week.

2 – The belief that you have to sell something. This commercial never advertises a product or service, and there’s no call-to-action at any time to buy either. Strip out a few quick and almost subliminal appearances by the Nike Swoosh logo, and you would have no idea what company was responsible for this ad.

 

But something is being sold here.  Maybe it’s the dream that every child has when they play mini-midget or pee-wee football that one day they will be the next Peyton Manning or Julio Jones.  Maybe it’s the dream that a mother or father has for their child to see them one day become an NFL success.

Nike understands that every child has those dreams, and what it is selling is how its products can help make that dream a reality.

Nike’s marketing focus for this commercial isn’t its products, it’s what its customers are passionate about. That instantly makes its message more interesting and appealing to its audience.

 

“The Challenge of My Life Is…To Find Out How Far I Can Take It”

RedBull

And then there’s Red Bull.  Long heralded as the poster-child for successful content marketing, Red Bull does little to promote its actual product.  Instead, it promotes the activities its customers are passionate about.  Even to the point of sponsoring ‘extreme sporting’ events and teams, helping to push forward an entire industry.  Red Bull’s customers can see that the brand is just as devoted to the sports and events as they are, and this makes it easier for these customers to become more devoted to Red Bull as a result. Red Bull understands that it’s not about selling its energy drink, it’s about selling what happens after you drink it.

 

Most of us view marketing in the same context. As being boring, repetitive, and a nuisance to be avoided.  Yet in the hands of brands like Patagonia, Nike and Red Bull, marketing becomes something else entirely.  Interesting, engaging, and even inspirational.  Great marketing doesn’t sell a product or service, it inspires us to change ourselves, to even change the world.

Why the Disconnect?  What Are These Brands Doing Differently?  

One of the main reasons why I wanted to write Think Like a Rock Star was because I was enamored with how easily rock stars can create and cultivate fans.  And when I say ‘fans’, I am talking customers that literally are in love with their favorite rock star.  I wanted to write that book to determine if brands could create fans using the same methodology as rock stars.  I was thrilled and delighted to discover the exact process that rock stars use to create fans, and how brands can do the same.  It’s all in the book.

On the same note, for the last few months I’ve been fascinated with how brands like Patagonia, Red Bull, Nike and Pedigree simply create better marketing than most other brands.  I wanted to deconstruct what these brands are doing differently to determine if there’s a pattern and a process that your brand can use to improve its own marketing efforts.

Recall the AIDA model of measuring advertising effectiveness that we all learned in college.  The ‘A’ stands for Awareness.  It’s the starting point, a potential customer has to be aware before they can have Interest and the Desire to Act, ie purchase your product.

This is where most brands deviate from those that create truly effective marketing like Nike, Red Bull, Patagonia and Pedigree.  Most brands begin at the starting point of making sure that they make potential customers aware of its product.  They sell potential customers on what the product does, and use that as the basis for making the case for why you should buy it.

Brands like Red Bull, Nike, Patagonia and Pedigree do something radically different.  They don’t start by trying to make you aware of their products, instead they try to make you aware of how their products will fit into your life and make it better.  The focus isn’t their products, it’s your passions.

Patagonia isn’t selling clothing, it’s selling what you will do while wearing its clothing.

Red Bull isn’t selling an energy drink, it’s selling what happens after you drink it.

Nike isn’t selling shoes, it’s selling how you will be better at the sports you play while wearing its shoes.

Pedigree isn’t selling dog food, it’s selling happier and healthier dogs.

Pedigree

You don’t market your product, you market how your product fits into your customers’ lives.  Too many companies market their product and assume that the customer can make the connection for themselves as to how that product would be relevant to the customer.  Quite frankly, this is incredibly lazy and ineffective marketing.  The smart companies are the ones that understand their customers enough to understand their passions, what stirs their souls.  And they take this knowledge and create marketing messages that tap into these passions, and that make the connection for the customer between their passions, and the company’s product.

If you focus on the things that your customers are passionate about, by extension your customers will become more passionate about your brand.  The key is to market things that your customers are passionate about, that also relate to your product.  Nike promotes being active in sports because it sells the equipment you’ll need to perform those activities.  Pedigree promotes happier and healthier dogs because it sells the dog food that’s going to help your dog live a happier and healthier life.  But customers are more passionate about being active than they are about a running shoe.  They are more passionate about creating a better life for their golden retriever than they are about your dog food.  Nike and Pedigree understand this, so they focus on their customers’ passions first, and the connection between those passions and the product, second.

In fact, most brands prioritize its marketing communications in this order:

1 – Sell the product, what it does and why it works.

2 – Sell how the product fits into the customer’s life.

3 – Sell ideas, beliefs and causes that customers are passionate about, that also relate to the product.

Most brands focus almost all of their marketing efforts on #1, with a bit of #2, and almost none of #3.

But the brands that truly create memorable marketing communications flip the order:

1 – Sell ideas, beliefs and causes that customers are passionate about, that also relate to the product.

2 – Sell how the product fits into the customer’s life

3 – Sell the product, what it does and why it works.

There’s two important point to realize about both these approaches.  If you focus mostly on the product itself, many people will immediately tune your marketing messages out because you haven’t yet made the case to them for what your product is relevant to them.  Also, your message will immediately be classified as being a ‘marketing’ message, and most of us immediately ignore any message that we view as being ‘marketing’.

Second, if you focus instead on the ideas, beliefs and causes that your customers are passionate about, that instantly makes your ‘marketing’ message relevant to your customers.  You immediately perk their ears up and they will listen to what you have to say.  Also, you are creating that Desire to learn more about your product so your customers will be motivated to do their own research on your product.  And let’s be honest, we all want to support and advocate for companies we believe in.  If your brand shows me that it can connect with me around the ideas, causes and beliefs that I hold dear, I will feel better about doing business with your brand.

 

So what’s the formula?  What’s The Passion Principle for your brand?

First, you have to know your customers well enough to know who they are, and what’s important to them.  What you want to do is find the connections between your product, and your customer’s passions.  This isn’t always obvious, and typically requires research on the part of your brand.  For example, Fiskars didn’t realize how popular its orange-handle scissors were with its customers in the scrapbooking community until they started talking to those customers.  This knowledge caused the brand to shift its marketing focus away from the scissors (product), and instead focus on scrapbooking (customer’s passion).  By shifting its marketing to focus on the passion of its customers (scrapbooking), the brand became more interesting and relevant to its customers.  BTW, Fiskars just reported that net sales increased by 62% in Q3 for 2015.

So in order to create marketing and content that your customers will love, start by asking (and answering) these questions:

1 – What are our customers passionate about?

2 – What are they trying to accomplish?

3 – What problems do they need to solve?

4 – What roadblocks are in their way?

5 – How does our product relate to any or all of the previous points?

The fifth point is probably the most important because it’s not enough to simply understand what your customers are passionate about or what their problems are, you also need to understand how your product is the solution to that problem.  Otherwise, you’ll be focused on ideas, passions and beliefs that might be relevant to your customers, but that aren’t relevant to your product.  Which means your content and marketing won’t be as memorable or relevant to your customers.

Case in point: Name your 5 favorite Super Bowl commercials from last year.  It’s tough, isn’t it?  I bet you’re struggling to remember even one, aren’t you?  Yet every year we’ll see Super Bowl ads that make us laugh or tug at our heartstrings, but unless the message is relevant to the brand, it’s difficult to remember.

Now here’s another test: What brand did the ‘So God made a farmer…’ Super Bowl commercial from a couple of years ago?  I bet its easier for you to remember that Dodge was behind this commercial, right?  Why?  Because a Dodge truck fits into the life of a farmer.  It makes sense because farmers need trucks to get their work done, so there’s a connection there that works.

If the connection makes sense, then the content or marketing message will resonate and be more effective.  Remember, you don’t market your product, you market how your product fits into your customers’ lives.

Pic via Flickr user Sheila_Sund

Pic via Flickr user Kevin Cole

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Customers Are Increasingly Using Mobile Devices to Research Your Company and Your Products

According to new research from eMarketer, the majority of mobile shoppers are under the age of 44 (78%) and Female (53.4%).  The article also referenced a study done by Payvision that found that 57% of retailers worldwide experienced major mcommerce growth in 2014, and that figure increased to 79% for 2015.

So needless to say, customers will increasingly be viewing your content on mobile devices.  As a result, you should make every effort to make sure that your content is optimized for mobile devices.  Here’s a couple of links that can help you with that.

Google’s Mobile-Friendly Checker.  This will scan your site/blog and tell you if it is mobile-friendly.  It will also tell you things you can work on to improve performance.

WPtouch Mobile Plugin.  This is the plugin I use to make this site all purdy when loaded on smartphones.  It’s only for WordPress, and it does have some compatibility issues with certain WordPress themes, so it may not work on your WordPress blog.  But it’s worth trying out, here’s some screenshots from how my content looks on an iPhone with this plugin:

MobileSiteHave you optimized your blog for mobile devices? If so, have you noticed any changes, especially to search traffic from mobile devices?

 

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Travel Agencies, CVBs Should Highlight Bloggers That Are Promoting Your Local Area

This is a great example of a local CVB (Convention and Visitor’s Bureau) promoting a blogger that took the time to promote that area’s attractions.  In essence, the blogger is promoting you, so you promote the blogger!  This only encourages local bloggers to do more to help spread the word about your local area and can help them become powerful promotional partners with you.

This can and should be done by all tourism departments, especially local CVBs that focus on promoting a local area.  You should actively research for any sites or bloggers that routinely promote local attractions and begin promoting any content they create that promotes your local attractions.  Another example would be property managers.  Years ago I worked with a client that had a national network of properties that they rented apartments at.  Part of the advice I gave them was to promote their local areas and show why people should want to move their and rent an apartment in that area.  And this included connecting with local bloggers that were promoting the area because these bloggers were doing the client’s job for them!

So part of your digital strategy if you are trying to promote your local area should be to connect with any bloggers that are helping you in your quest to attract people to that area.  Put the spotlight on these bloggers and thank them for helping you draw attention to your area.

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Your Brand’s Guide to Dealing With That Customer That Just Called You An Asshole on Facebook

“Everyone has a plan until they get punched in the mouth.” – Mike Tyson

Let’s say you get this comment on your Facebook page about your all-purpose cleaner: “This product sucks.  It works on vinyl ok but did nothing to the stains in my carpet, I sprayed it on and then vacuumed up and it didn’t faze the stain,  Total waste of money.”

Your product clearly states in the instructions that you are to let it soak for at least 30 minutes on carpet stains, but it appears the angry customer did not do this.  So you politely try to help him.

“Hi Don! Sorry you had some difficulty removing the stain on your carpet.  As it states in the instructions, if you are trying to remove a stain from your carpet, please let the cleaner soak into the carpet for a minimum of 30 minutes before vacuuming up.  If you try this I think you will see improved results, please let us know!”

Undeterred, Don replies again: “I’m not an idiot, I know how to read the instructions! I left the product on for a few minutes, that should be plenty of time if it’s any good!”

Actually, it appears that Don may indeed be an idiot, since he cannot follow simple instructions.  Even if he’s not, he’s definitely acting like an ass in this interaction and is abusing a company that’s clearly trying to help him with his issue.

But as a company, you still have to deal with the fact that every online conversation has 3 sides; Yours, mine, and everyone else that’s watching our interaction.  Calling Don an abusive idiot might make you feel better, and the people that have been following your interactions with Don might even agree with you, but to everyone else that reads your post later, they will view you as the clueless company that just called a customer an abusive idiot.

So the question at this point becomes “How do we respond to Don?”  Since Don didn’t listen to your suggestion on how to properly clean his carpet, it’s valid to assume that if you try to help him again that he not only won’t listen (again) but he might attack you (again).

Then it makes sense to either ignore Don, or if you feel like leaving another attempt at helping him. I would suggest doing so in a way that is helpful, but that playfully points out that he’s acting like an ass.  Something like…

“Hi again Don! Sorry to hear that you continue to have difficulty removing the stain on your carpet, but at least you are successfully ignoring our clear instructions for solving your problem! Just to humor us, could you try liberally applying the cleaner to the stained area of your carpet, and then vacuum it no sooner than 30 minutes later? This should either completely remove your stain or at least make us feel better about your efforts to do so.  Keep in mind that if you need more help we are here for you, or you can call or visit our website!  Good luck!”

It’s entirely possible that Don might blow up again, or that another customer would.  Unfortunately, there will always be people that lack basic social skills, that feel determined to use social media anyway.  The point is that just as your brand shouldn’t be abusive to its customers via social media (duh), your brand also doesn’t have to accept when its customers are being abusive to you via social media.  Give your customers credit: They can see if your brand is acting inappropriately, and they can also tell if other customers are as well.

Typically, discretion is the better part of valor and it’s best to walk away from a customer that’s being abusive.  On the other hand, if you can tactfully ‘put him in his place’, slapping down an abusive customer can win you accolades from other customers, and send a message to other potentially abusive customers that you intend to call them out on their bad behavior.

Engage With Your Fans, They Are Your ‘Guard Dogs’

While trolls and assholes might avoid your Facebook page if you call them out on their behavior, they will run for the hills if your fans will as well.  I’ve talked about this before, but think of your fans as being a guard dog in your yard.  The dog will alert you if a stranger is sniffing around, and he’ll scare them off.  Your fans do the same thing.  Engage with your fans and they will stick around and help defend you online and let you know if someone is causing you grief.  They’ll also help out customers that legitimately need help, and they will bring these people to your attention as well.

The bottom line is be helpful, friendly, respectful and compassionate, and you’ll be fine, even if the jerks come knocking (and they always do).

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Companies Encouraging Employees to Use Social Media is Increasingly Popular Heading Into 2016

16034335445_0ba754b746_zA new article from eMarketer sheds light on how popular Social Employee Advocacy Programs are becoming.  These are programs where employees are encouraged to promote their brand via social media.  You can immediately see why it would be popular with many companies.

In crafting such programs, it is important for the company to also create guidelines for any employees that decide to participate.  These include such things as letting the employee know what type of behavior/conduct is expected, identifying themselves as representatives/employees of the brand when they create content that promotes it, etc.

Also, such programs should be offered as an option, not as being mandatory.  Just as you wouldn’t require every employee in your country to deal with customers directly in a retail setting, you shouldn’t ask all of them to do so online.  The last thing you want to do is make employees feel obligated to engage in a task that they don’t want.  Instead, you want to attract the employees that love your brand and who are already singing your praises online.  Their voice is authentic and their ability to attract others to your brand is far greater than the employees that feel ‘forced’ to participate in a program that they feel isn’t worth their time.

Pic via Flickr user MSLGroupGlobal

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Stop Listening to Social Media Experts (Or At Least Be More Careful When You Do)

16224910474_93e761cc3a_zA few years ago I took my Acura to a Honda dealer to have them change the oil and rotate the tires.  About an hour later, the service manager comes out with a clipboard and I ask him “How’s everything look?”

“Ho boy!”, he exclaims.  “You’re going to end up on the side of the road soon if we don’t repair all this as soon as possible!”

Now I’m not a mechanic, but I do know a (very) little about working on cars.  With a skeptical eye, I took a look at his laundry list of items that all needed to be fixed immediately, or according to him I was “going to end up on the side of the road soon”.

I looked at his list, and immediately notice several items that either didn’t need to be fixed or were actually due to be replaced according to the mileage of the car and a ‘suggested maintenance schedule’.  “Ok”, I explained, “I just replaced the distributor cap and the wires, and the plugs were changed 3,000 miles ago so they are fine as well.  So out of what’s left, what needs to be fixed today?”

With a bit of a frown he looked at the list and sighed “Well…I guess the only thing that you need to worry about right now is the rear motor mount, it’s in pretty bad shape.  But everything else can wait at least another 6 months.”

So in 2 mins I had gone from a dozen or so items that all needed to be fixed that day if I wanted to make it home, to there actually only being one item that needed immediate repair.

I was recalling this conversation when I recently sat down with Kerry Gorgone to record Marketing Profs’ year-end episode.  One of the recurring themes that Kerry’s guests mentioned was that they wanted to see less criticism of brands, especially when it comes to digital marketing.  And for brands, don’t take that criticism to heart, and consider the source.

When I say ‘consider the source’, keep in mind that a lot of the criticism that’s being leveled at brands using social is coming from consultants and agencies that have a vested interest in selling these brands social media consulting services.  It can sometimes be a case of “You suck! But that’s ok, because for a low monthly retainer, I can teach you how NOT to suck!”

Not all consultants and agencies that provide digital marketing advisement to companies are like this, in fact most reputable ones are not.  But it’s truth that many of the people that are criticizing your brand have a vested interest in doing so.  Either they are hoping to sell you consulting services, or maybe they are piling on with the latest brand mishap in a race to get out a new post every day.

Use Social Media Experts and Thought Leaders For Advice, Not Instruction

One of the key pieces of advice you will hear as a blogging company is that you need to blog regularly.  That a regular stream of good content that benefits your audience is imperative.

Recently, I was talking to a fellow consultant.  He was telling me about how well his year was going, and I lamented the fact that I needed to find time to start blogging regularly again.  He said “Mack I haven’t written a blog post in 6 months. I just don’t have time.”  Here’s a consultant that’s having an excellent year, yet he is so busy with work that he goes months sometimes without blogging.  But obviously it’s not hurting his business!

The point is that just because everyone says you should do something, doesn’t mean you should.  The best way to leverage the advice of experts is to listen to multiple ones, and look for trends.  And then approach their advice as being a suggestion for you, not an order.  Your business is unique, I can tell you what will work for a business like yours in general, but until I sit down with you and we discuss the unique goals and challenges associated with your business, I cannot give you customized advice on how to improve your efforts.

Listen to the experts, but don’t discount your own intuition and knowledge.

Pic via Flickr user GotCredit

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PBS Tabs @ScottMonty to Live-Tweet Sherlock: The Abominable Bride Premiere Jan 1st

There’s a constant debate when it comes to driving awareness of a brand, product or event over whether it’s better to work with influencers, or fans.  With influencers you’re getting reach, but fans have more passion for your brand and message.

But the best of both worlds is to work with influencers that are also fans.  This is what PBS has done by again having Scott Monty, a huge Sherlock Holmes aficionado, live tweet the premiere of its new Sherlock event which premieres on Jan 1st.  I love what PBS is doing here and have always said that brands, especially in the entertainment industry, should be doing a better job of connecting with its fans to help promote shows, series and events like PBS is doing here.

If you want to follow along on Twitter, follow the hashtag #SherlockPBS from 9:00-10:30 PM Eastern on January 1st.

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Building Your Blog For 2016

23409777699_7332a88c97_zEvery year I use the month of December to do a bit of an audit of how my blogging year went, and then plan out how I want to leverage the blog in the coming year.  I pick December since it’s the last month of the year, plus traffic is typically down the first 2 weeks of the year anyway as we all get knee-deep into Holiday shopping and planning.  So it’s the perfect time to take a step back and examine where you’ve been and re-assess where you are going.

When you’re planning for the coming year, it’s best to start with this question: Who is our desired blogging audience?  In other words, what type of person do you want to read your blog?  For your business blog, you’ll have answers like:

  • We want readers who are current or potential customers
  • We want readers who are current or potential donors or partners
  • We want readers who are current or potential clients

This is a good start, but the more specific your answers, the better your results.  And it’s a process, you want to drill down with your answer because the more specific your focus, the more efficient your content creation efforts.  Here’s how I would drill down if I were deciding exactly who I wanted to reach with my blog in 2016:

Q – Who is your desired audience?

A – Potential clients.

Q – Potential clients for what service(s)?

A – Potential clients for my speaking and consulting services, as well as companies looking for sponsorship opportunities.

Q – Which area; speaking, consulting or sponsorships is most important to you?

A – Hmmmm…probably speaking first, consulting close behind, then sponsorships.

Q – So it looks like potential clients for speaking and consulting are where you want to devote most of your energy.  Will you be focused on speaking on the same areas where you would like to consult?

A – For the most part, yes.  I want to speak on topics related to brand advocacy, customer engagement, and helping companies create more customer-centric content and marketing.  These are also the same areas where I want to focus my consulting.

 

Notice how just by asking a couple of more specific questions that I’m already narrowing down my focus a bit.  At first I was just thinking about wanting readers who are potential clients, now I know I need to focus more on potential clients who need speakers and consulting services, moreso than sponsorship opportunities.  Additionally, I know that I typically will be speaking on the same topics that I want to consult on, so there’s a lot of overlapping there.  This is already helping me better define my blogging focus in 2016.

A Hypothetical Example of How This Could Work For Your Company

Let’s do this exercise for you.  Let’s say you blog for a company that sells website security services.  You charge customers a monthly fee to manage their basic website security.  You’ve noticed that customers will typically contact you when they have an existing issue with their website (it’s been hacked, there’s a malware issue, etc), and they will continue to buy your services for 2-3 months after the problem has been solved, then they will typically stop buying and won’t contact you again until there’s another issue that they need help with.  So there seems to be a lot of churn starting at the 3-4 month mark, so one of the focus points for the entire company is trying to reduce that churn rate and increase the time that customers stay on.  Let’s go through the same Q&A process for this example company:

Q – Who is your desired audience?

A – Current and potential customers.

Q – Which one is more important to you in 2016?

A – Well we need both, but a business focus in 2016 will be ensuring that current customers stay with us for a longer period of time.

Q – What would typically be reasons why customers would leave?

A – Typically, companies will contact us when they’ve encountered a security issue with their website that requires immediate attention.  They will sign up for our service and then after we’ve fixed the issue, they will typically stay with us for a few months and if the issue doesn’t flare up again, often they will discontinue the service and only come back if something else happens in the future.

 

With just 3 questions, we now have a much clearer sense of the direction of our content in 2016.  We know we need to focus more on connecting with current customers and giving them a reason to stay with us longer.  This helps drive our content strategy for 2016, and gives us an idea of the types of content we need to create, such as:

  • Blog posts that talk about how customers do more business with companies that have a secure website.
  • Blog posts that talk about the potential damage to a brand’s reputation if their website is repeatedly down due to poor website security.

Blog posts such as this help make the case to current customers that it’s better for their business to stay with your company and let them continue to handle their website security.  By taking a few minutes to think through your content goals for 2016, it not only helps you better connect with your exact target audience, but it means you will spend less time on your content and that it will be more efficient.

Pic via Flickr user Giuseppe Milo

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Observation or Word of Mouth; Which is Better For Driving Sales?

Recently I came across an interesting article from the Harvard Business Review.  It was based on a study that suggests that customers are far more likely to buy what another customer buys by simply observing the purchase action vs hearing that customer say they buy the product (Word of Mouth):

“we found that observing other customers wasn’t only very common, it was also strikingly important in shaping consumers’ views of a brand: equally important as word-of-mouth recommendations for mobile handsets and soft drinks, and even more important than word of mouth for technology products and electrical goods. Overall, peer observation was equal in importance to the brand advertising on which companies spend billions.”

This does make sense, although I think there’s an important clarification to this idea that customer observation drives sales at a rate equal to or superior to verbal endorsement from that same customer (Word of Mouth).  Mere observation only works if the customer is undecided on which product to purchase.  For example, let’s say I am looking for a cake mix, and can’t decide if I want the one from Duncan Hines, or the one from Betty Crocker.  Both seem to be about the same as far as quality and price.  But if, while I am standing there trying to decide which cake mix to buy, a customer comes up and grabs the Duncan Hines mix, that might persuade me to buy the Duncan Hines mix.  If a second customer immediately came up and grabbed the Duncan Hines mix as well, that might cinch the sale for me.

On the other hand, let’s say I am a Duncan Hines fan.  I always buy their cake mix because it creates a very moist cake.  If my mind is already made up, then it really doesn’t matter how many customers I observe buying the Betty Crocker mix, I will still prefer the Duncan Hines cake mix, because I love how moist it is.  But let’s say my cousin comes by, and she notices I am buying the Duncan Hines cake mix.  If she says that I should try the Betty Crocker mix, I would be more open to considering that since she’s my cousin and I know and trust her.  If she added that I should buy the Better Crocker cake mix because it is more moist than the Duncan Hines cake mix, that might very well convince me to buy the Betty Crocker cake mix.

At any rate, regardless of which cake mix you like (or whether observation or Word of Mouth helped decide your purchase), it should be noted that this underlies the value of customer acquisition flowing through existing customers.  We are increasingly placing less trust in advertising that comes from brands, and more trust in messages that come from fellow customers. Even if those messages are shared via simple observation.