MackCollier.com

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Study: 4.7% of Your Customers Generate 100% of Your Online Word of Mouth

Word of mouthIn 2013, EngageSciences analyzed online interactions with and from over 400 brands and drew a conclusion that’s not that surprising: A small fraction of your customers are driving all of the online word of mouth about your brand.

The startling figure from our research was that typically only 4.7 percent of a brand’s fan base generates 100 percent of the social referrals. So to put it another way, it is 4.7 percente of your social media following that generates all of the word of mouth results, and by results we mean conversions, not just reach. These are the advocates that can actually influence their friends to convert directly onto your campaigns, to connect with you as a brand or take up an offer.

Not that we are ignoring the other 95 percent, there is still plenty of value in this large segment. They’re connecting to you as a brand, the active fans are consuming your content and they are 20-30 percent more likely to buy from you as a result. But if we are looking at social media through the eyes of marketing and we want to improve our acquisition metrics, then it is the top 4.7 percent  that generates all of the earned media results and organic growth

This is exactly why it’s so important to engage with your fans.  So many companies view their marketing campaigns as the chief channel for customer acquisitions, when in fact its your fans that are driving new customer referrals.  The end result is that companies end up spending massive amounts of money on creating marketing messages that are designed to connect with potential new customers.  People that have little to no interest in hearing that marketing message.

The Loyalty Graph

The biggest takeaway for me in writing Think Like a Rock Star was studying how rock stars create fans and learning that they all pretty much have the same marketing strategy guiding their efforts.  While companies create marketing messages designed to acquire new customers, rock stars across the board purposely ignore new customers, instead focusing on their biggest fans with the understanding that those fans will acquire new customers for them.

The problem is most brands don’t know who those 4.7 percent are and don’t have programs in place to work with this elite group of advocates. Marketers are often seduced by trying to pay for access to influencers – celebrities, bloggers and industry analysts. However everyone else is trying to do the same thing, which negates the value of this approach.

I also noticed this when writing my book.  I interviewed dozens of top brands, and asked them about their programs for connecting directly with their fans and advocates.  Every brand told me the exact same thing: We don’t have any program in place to do that.  So much of the marketing focus is on customer acquisition that brands don’t realize that their existing fans are a far more effective mechanism for customer acquisition than any series of commercials they can create.

Your fans are special customer that thrive off interacting with you.  When you connect with them, it simply validates why they love your brand and encourages them to create more positive word of mouth about your brand.

The most positive, long-term impact you can make on your business is to build a program within your brand that allows you to connect with your most passionate customers and they with you.

Period.

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What’s the Difference Between a Brand Ambassador Program and an Outreach Program?

Influencer Marketing and working with Brand Ambassadors are two of the hottest areas in marketing today, but they are completely different tactics often aimed at completely different audiences.  So what’s the difference?

A Brand Ambassador program is where the company and its customers (fans) have a sort of informal and ongoing relationship.  Typically, the participants in a Brand Ambassador program have signed up with the company, so they are raising their hands and telling the brand that they want to work directly with them.  Most Brand Ambassadors are compensated for their involvement.  That compensation could be in the form of cash, or products, or discounts on products, or greater access to the brand, or possibly all of the above.  The benefit to the brand is that it gives them a way to stay connected with its most passionate fans, so they can work with those fans to help them better promote the brand’s products to others, but also the brand can get valuable feedback from its ambassadors and apply that feedback to the business and product cycle.  The Brand Ambassador benefits by having a closer connection to a brand it loves and supports.  Often, Brand Ambassadors will get advance access to upcoming products or projects, and get to go ‘behind the scenes’ at the brand, and are given a level of access that the average customer could never gain.  If the Brand Ambassador program is organized and executed properly, there are clear and obvious benefits to both the brand and its Brand Ambassadors.

For example, Chick-Fil-A has a program where it works with moms, #ChickFilAMoms. It will send them coupons for certain items and also promote certain items to them (especially new menu items). CFA tries to get the moms to try the items, but they also want the moms to tell other moms about the products so they’ll give them coupons but also instructions on messaging, how to promote the items to other people, etc. The customers will also give feedback on the items and brand experience, and Chick Fil-A can then leverage that feedback for change (see Chick Fil-A launching a Mom’s Valet service for moms that bring kids to Chick Fil-A). Customers opt-in to be a part of the program, it’s all about having an ongoing relationship with fans that have raised their hands and told the brand that they want to help them.

Outreach programs are a bit different.  Typically, these inititiatives are designed to raise awareness among a particular group, often a group of influencers.  For example, if Chick-Fil-A wanted to work with influencers, what they might do was identify say 25 moms that were also ‘influencers’, and fly them into Atlanta and let them spend the day with their chefs, see how the food is prepared, maybe learn more about how CFA works with moms, etc.  As Janice Person explained in a recent MarketingSmarts podcast with Kerry Gorgone (Click to listen), Monsanto brings in foodie bloggers to its partner farms to give them a complete look at the process in bringing food from the field to the table, and along the way they also learn more about Monsanto’s role in helping to facilitate that process.  In both examples, the idea of the outreach is to educate the influencers with the hopes that they will then go and tell others about their experience.

And in that regard, both a Brand Ambassador program and an Outreach program are tactics to drive Word of Mouth.  The tactics are simply aimed at different audiences.  With a Brand Ambassador program, you’re working with an audience (your existing customers) that loves your brand and who is already spreading Word of Mouth about your brand.  You want to work with these customers to help them do a better job of this as well as working with them to gain better product feedback from customers they interact with.  With an Outreach program, you’re dealing with an Influencer that has often built a large and (ideally) engaged online following, and you want to expose them to your brand so that they can share their experiences with their networks.  So the Outreach program is a brand awareness tool as well.

Another way to think of the difference is, an Outreach program is a good way to build awareness for a new product line or initiative, whereas a Brand Ambassador program is a good way to increase the marketing efforts of your customers around an established brand.

Is your company looking for a kick-ass Content Marketing Manager? I’m in the market!  Here’s my details, please email me if you have a remote opening! 

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Why You’re Not as Good at Customer Service as You Think You Are

hyh-book-2Note from Mack: This is a guest post by my pal Jay Baer.  Besides being recognized as one of the top experts in digital marketing, Jay also has a new book called Hug Your Haters (check it out on Amazon) and this post is drawn from that book.  Enjoy! 

Whether you work for a mom-and-pop store or a global brand, you do have haters — and you can’t afford to ignore them. By embracing complaints, you put haters to work for you, and turn bad news good.

So few companies hug their haters today that those that make this commitment are almost automatically differentiated and noteworthy when compared to their competitors.

Customer service and customer experience matter. And they’re going to matter even more in the future. The world is inextricably linked now, by transportation and technology that was unthinkable twenty years ago. This global interconnectivity mutes the advantages of price and location that businesses formerly used to create market inefficiencies and gain a disproportionate share of customers.

Why I always order from the same pizza place

Take Bloomington, Indiana, for example. There are more than one dozen banks in this modest-sized college town where I live. All of them offer almost precisely the same core services, at fees that are not appreciably different from one another. From the perspectives of product and price, they are nearly indistinguishable.

There are even more pizza places nearby, and they all offer roughly the same thing at the same cost, partially because they are buying ingredients at the same price from the same global suppliers, and are tapping into the same labor pool, where what you pay a college student to make pizzas is essentially the same for each restaurant. Likewise, my accountant and your accountant and my barber and your barber are doing almost the exact same things for approximately the same fees.

In today’s world, meaningful differences between businesses are rarely rooted in price or product, but instead in customer experience. How does each provider make you feel when you interact with them? It is in the provision of standout, noticeable customer experience (the real-world embodiment of the brand promise) where great companies shine and mediocre companies shrink.

Why do I always order from the same pizza place in Bloomington? Because I live on the outskirts of town, and they cheerfully deliver to my house. Most of the other pizza places give me the terse “outside our service territory” story and refuse to bring me pizza.

Customer experience will be more important than price by 2020

The winning companies of tomorrow will be those that make their customers feel the best, even if those customers are paying more for the privilege. This isn’t just a circumstance that’s true in consumer products, travel, and hospitality either.

The customer intelligence consultancy Walker released a research report that stated that in business-to-business scenarios, customer experience will be more important than price by 2020.

“The B-to-B companies that will win are beginning to prepare now by recognizing the shift that’s taking place, aligning the right resources, and focusing on the right metrics. Enlightened companies must view the customer experience as a strategic initiative. And, in the future, the responsibility of a ‘chief customer champion’ will become more common, serving one purpose-to create an unrelenting focus on the customer,” states the report.

Outlove your competition

John Di]ulius, a well-known customer service consultant and adviser and author of The Customer Service Revolution, describes this differentiating factor as “outloving your competition.” As he writes in his book, ‘”Outlove your competition’ is one of my favorite sayings. Think about it. Nearly everything can be copied: the products or services that you sell, your decor, website functionality, menu, and prices. Can you really outwork your competition? Outthink them? Maybe not, but the one way you can get a distinct competitive advantage is by outloving the businesses you compete against. The only way to do that is to stop the typical squawking that goes on about how difficult customers can be, and just start appreciating them.”

Realize, however, that to truly differentiate your business with customer experience, you have to clearly outpace your competition in this regard. Making a commitment to “be better at customer service” isn’t going to get the job done. Instead, as Walker suggests, you need to “create an unrelenting focus on the customer.”

Embrace complaints

There are many elements of a comprehensive customer experience program. The first step in differentiating your business with customer experience should be to be demonstrably better than each of your competitors in how you embrace complaints.

Start there, and if you can successfully hug your haters, you’ll be on your way to a full-scale customer experience advantage that can literally be the difference between a flourishing business in five years, when price and location are no longer deciding factors, and not existing at all.

Customer service is the new marketing

Dan Gingiss, formerly of Discover, says, “We firmly believe here that customer service is the new marketing. Discover put its flag down on customer service since it started in the 80s. Discover was the first credit card company with 24/7 service. It pays attention to service and it’s good at it. It talks about it on TV—the last two main television campaigns have been about service. And to me a complaint online is an opportunity for us to show off amazing customer service in a public setting that can’t be done on TV and can’t be done in any other channel. If somebody is having an issue with their product or their card that I know can be fixed, to me it’s an opportunity.”

 

 

Drawn from Hug Your Haters: How to Embrace Complaints and Keep Your Customers, about which Guy Kawasaki says: “This is a landmark book in the history of customer service.” Written by Jay Baer, Hug Your Haters is the first customer service and customer experience book written for the modern, mobile era and is based on proprietary research and more than 70 exclusive interviews.

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Patagonia’s Marketing Plan to Keep You From Buying Their Products

For Black Friday in 2011, Patagonia ran an interesting ‘Don’t Buy This Jacket’ ad in the New York Times.  The ad kicked off a campaign by Patagonia to attack ‘consumerism’ head-on, and the brand asked its customers to strongly consider whether or not it was necessary to buy a new piece of clothing, or if an existing article they already owned was still useful enough.  Additionally, Patagonia wanted customers to think about the idea of owning things that have a purpose versus just owning something because you wanted it.

Surprisingly, the campaign actually sparked sales growth for the brand, to the tune of a whopping 33% increase in 2012.  The campaign is part of a consistent message that Patagonia has delivered to its customers:    Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.

Patagonia’s marketing works because it’s not focused on its products, but rather the ideals and beliefs that the company holds that its customers identify with.  I’ve written repeatedly about Patagonia’s marketing efforts and even included the brand as a prominent case study in Think Like a Rock Star.

And keep in mind when you read this that I don’t own a stitch of Patagonia clothing.  I just recognize amazing marketing when I see it, and want to celebrate it as such.

Another initiative Patagonia pushes is its Worn Wear program.  Patagonia will take your damaged clothing, and for a ‘reasonable’ fee, repair it for you.  The idea here is to extend the life of an existing garment versus buying a new one.

But this year, Patagonia is kicking it up another notch, and taking the Worn Wear program on the road, literally.  Throughout the year, a specially built Worn Wear wagon has been making its way across the country.  This vehicle is making stops and not only repairing Patagonia clothing for free, but other brands as well.  Additionally, Patagonia is teaching customers at every stop how to repair their own garments.

And if all this hasn’t thoroughly impressed the hell out of you, Patagonia has one more trick up its brand advocacy sleeve.  It has partnered with DIY repair site IFixIt to create a series of custom manuals and even a section for asking questions on how to repair and care for individual garments.

So this begs the question: If such customer-centric marketing and business processes work so well, why aren’t more companies copying what Patagonia is doing? There’s a couple of very important distinctions with Patagonia:

1 – Patagonia’s founder, Yvon Chouinard, is an avid outdoorsman and very concerned about the environment.  That means there is literally buy-in from the top down for Patagonia’s marketing approach to focus on the passions of the customers over the products.  Because Patagonia’s founder shares the same passions as his brand’s customers.

2 – Patagonia is a private company.  In this PBS Newshour feature on Patagonia, PBS played a snippet of a talk that Chouinard gave where he explained that “The problem with a lot of public companies is that they’re forced to grow 15 percent a year. They’re forced to show profits every quarter.”  Chouinard’s implication is that by being private, Patagonia can pursue a marketing strategy that perhaps would be far more difficult or even unattainable if the company was public.

Regardless, the idea of focusing your marketing communications on the larger context that your brand lives in, works.  Apple does it.  Red Bull does it.  Patagonia does it.  More companies should be doing it.

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Understanding the Power of the Conversation Around Your Brand

Every brand, company, product, person, team, etc has a conversation happening around it.  That conversation might be happening by a handful of people, or a few billion people, but for everything and everyone, it’s happening.

Your brand attempts to dominate that conversation with advertising and marketing.  For the average brand, the marketing messages it sends out often tend to clash with the opinions being expressed by current and potential customers.  It can lead to a cluttered conversation around that brand:

DSCN1712Notice all the lines around your brand?  It suggests that the brand can’t clearly communicate with its customers, and that those customers can’t clearly communicate with your brand.  And the key here is, as a customer I have to go THROUGH the conversation happening around your brand, before I can reach your brand.  If that conversation is cluttered, or if I am getting inconsistent messages from your brand and its customers, it makes it more difficult for me to trust your brand, and less likely to want to do business with you.

The above could be called an example of a ‘dirty’ conversation happening around this particular brand.  Dirty conversations aren’t conducive to creating trust.  So the question becomes how does your brand ‘clean’ that conversation.

There’s two key ways.  The first is by participating in that conversation.  By participating in a conversation your brand changes that conversation.  Part of participating in a conversation is listening to the other party.  When you listen to your customers you have a better sense of your customers’ point of view.  So you can apply that better understanding of your customers to your marketing messages.  That alone will clear the conversation around your customers a bit, and make your brand’s messages more in line with what your customers are saying.

The second way to clean a dirty conversation is to have your happy customers participating in that conversation.  Your happy customers have a strong connection with your brand, and a greater level of understanding about your brand. So you want these happy customers to be interacting with other potential customers, and changing the conversation about and around your brand.

Here’s a hypothetical for how this could work: In a few weeks I will be keynoting the Gulf Shores and Orange Beach Tourism’s Annual Tourism Summit in beautiful Gulf Shores, Alabama.  I am going to ask the attendees to raise their hand if they consider the Gulf Shores and Orange Beach area to be one of the best places in the South to visit.  I am betting every hand will go up because like me, I am betting all of the attendees will be big fans of the Gulf Shores and Orange Beach area.  So the conversation about Gulf Shores and Orange Beach with that group would be very ‘clean’.

But let’s say that next month I spoke at the Utah Governor’s Conference on Tourism in Salt Lake City.  And let’s say I asked those attendees to tell me how many of them felt that Gulf Shores was one of the best places in the South to visit.  My guess is that few, if any, hands would go up.  And that’s likely not because the tourism professionals in Utah dislike the Gulf Shores area, it’s probably because they have never been there.  So the conversation around Gulf Shores in that room in Utah would be a bit ‘dirty’.

However, if I could take the tourism professionals I’ll speak to next week in Gulf Shores to Utah and have them, as a group, talk to the tourism professionals in Utah about the Gulf Shores area, the conversation in that room in Utah about the Gulf Shores area would change.  The tourism professionals in Utah would get a better understanding of the Gulf Shores area, and they would likely be more willing to consider visiting Gulf Shores.

In fact, science has proven this.  Scientists at Rensselaer Polytechnic Institute concluded that it only takes 10 percent of a population holding an unshakable belief in order to convince the majority to adopt that same belief.  In fact, the scientists found that this will always be the case.

“When the number of committed  holders is below 10 percent, there is no visible progress in the spread of ideas. It would literally take the amount of time comparable to the age of the universe for this size group to reach the majority,” said SCNARC Director Boleslaw Szymanski, the Claire and Roland Schmitt Distinguished Professor at Rensselaer. “Once that number grows above 10 percent, the idea spreads like flame.”

What that means is that if 10 tourism professionals from Gulf Shores that knew that Gulf Shores was an amazing place to visit interacted with 90 tourism professionals from Utah that weren’t familiar with Gulf Shores, that eventually the tourism professionals from Gulf Shores could convince over 40 of the tourism professionals from Utah to also believe as they do.  That Gulf Shores is a great place to visit.

Think about that, for a second.  Take 90 people that have no strong opinion for or against your brand, and have them interact with 10 happy customers that LOVE your brand, and eventually those 10 fans will convince at least 41 of those 90 people to also LOVE your brand.  So while a brand has limited ability in most cases to affect and change a conversation about and around its brand, that brand’s happy customers can much more easily change the conversation about and around a brand.

DSCN1713Notice here that it’s much easier for the brand to send out marketing messages, and its much easier for the brand to connect with its customers.  There’s far less ‘clutter’ and the conversation around this brand isn’t ‘dirty’.  That’s because the conversation around this brand has been ‘cleaned’ by having happy customers take an active role in that conversation.  It’s also because the brand’s marketing messages have been changed and shaped by input and interactions with its happy customers.  So the brand is sending out messages that are more in line with what those happy customers want and need to hear.

How clean is the conversation around your brand?

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The Fan-Damn-Tastic Marketing Show Episode 23: Your Fans Are the Cool Kids

Hey y’all! In this episode of #FanDamnShow, I talk about how your fans drive sales by encouraging non-committed customers to try your brand.  I also reference a study done by a Princeton professor who wanted to learn if a product’s popularity was driven more by quality or positive WOM.  The results might surprise you, and I talk about the study and what was uncovered in this episode.

Here’s the NPR episode that talks about the study and interviews the Princeton professor that conducted it.  Just fascinating!

Here’s where you can download and listen to the episode directly.  And if you can, please subscribe to The Fan-Damn-Tastic Marketing Show on iTunes, and I would *love* it if you could review the podcast on iTunes as well.  Also, #FanDamnShow is now available on Stitcher as well!

Also, don’t forget that sponsorships are now available for The Fan-Damn-Tastic Marketing Show. This page that has all the information on how your brand can sponsor #FanDamnShow and the rates. Please note that the sponsorship slots for May and June are on hold.  All available sponsor slots (starting with July) will be filled on a first-come, first-served basis, so please email me if you are interested in sponsoring #FanDamnShow.

We’ll talk again next week!