Transcript KellerFay

Unleashing the Power of Word of Mouth
to Understand Markets
40th CMAG Meeting
March 14, 2008
© 2008 Keller Fay Group LLC
Not to be quoted or distributed without written permission
Who We Are
The Keller Fay Group
• The first research-based
marketing consultancy focused
on word of mouth
– Metrics: measuring brands’ word of
mouth and competitive context
– Best practices: understanding the
dynamics of word of mouth
– Implications: analyzing strategic
impact
• TalkTrack®: award winning study
of word of mouth and its impact
2007 ARF INNOVATION GRAND AWARD WINNER
www.kellerfay.com
2
There’s a Lot of WOM Today
3.5 billion word of mouth
conversations each day in
America
Source: Keller Fay Group’s TalkTrack®
www.kellerfay.com
3
Leading Marketers Are Getting on Board
“Marketing is becoming less about
sending a message to consumers and
more about conversing and co-creating
experiences with consumers.”
“Make your consumer an advocate: Shift
marketing objectives from sending a
message to facilitating conversations with
and between consumers.”
-- HD Marketing 2010, a study presented by the
ANA and Booz Allen Hamilton in October 2007
www.kellerfay.com
4
Word of Mouth Is Often Organic
“I make a lot of recommendations.”
“It’s a natural, serendipitous process.”
“Most ideas come out of conversations, with
someone building on what’s just been said.”
“Someone will say they need a [window
washer]. I say I’ve got a great [window washer].”
“Someone will overhear the conversation, then I’m
giving three people the [window washer’s] name.”
-Sophie Glovier, Princeton, NJ
From The Influentials (Free Press, 2003)
www.kellerfay.com
5
Marketing Can Amplify Word of Mouth
Word of mouth marketing:
1. Encouraging word of mouth
within a marketing objective
2. Making it easy for consumers to
spread the word about your brand
Seeded on Wall Street
Users helping users
3. Making sure everything you do that
touches the consumer is “TalkWorthy™”
www.kellerfay.com
6
WOMM: Becoming Big Business
•
•
•
•
•
Topped $1.0 B in 2007
Increasing at 30%+ per year
Forecast to hit $3.7 B in 2011
Fastest growing alternative media segment
One of the most influential ways to connect
with consumers
Source: PQ Media 2007-2011 WOM Marketing Forecast
www.kellerfay.com
7
WOM
Is Gaining
Overover
Advertising
Word
of Mouth
Is Gaining
Advertising
(Effectiveness Through
Time)
(Effectiveness
over Time)
Index to All Communications Contacts
150
WOM
140
130
120
TV Advertising
110
100
2003
2004
2005
Source: SMG/100+ MCA Studies
www.kellerfay.com
8
2006
Marketing Success in a WOM Era
Key Questions
1. What’s your story?
…why should consumers talk about your product?
2. Who will tell it?
…who are your influencers?
3. How can you facilitate the
conversation?
…what tools can you create?
4. What’s the impact?
…does WOM lead to positive outcomes for my brand?
www.kellerfay.com
9
TalkTrack®:
A Unique System for Monitoring WOM
• TalkTrack® is the only system that:
– Measures all WOM: Face to face, phone, online
– Measures both the “talkers” and “listeners” (the WOM audience)
• What “talkers” are saying
• What “listeners” hear and do based on WOM
– Is representative of US population, with demographically
balanced samples
• TalkTrack® monitors the quantity, quality, and drivers of
all WOM
– Consumers report all brands they talk about (open ended)
www.kellerfay.com
10
TalkTrack® Methodology
• TalkTrack® data are collected through an online survey
– Sample drawn from several of largest online consumer panels
– Demographically balanced to US Census for ages 13 to 69
• TalkTrack® counts conversations with assistance of 24hour diary
– Respondents recruited to take notes on conversations in 15 “marketing
relevant” categories over next 24 hours
– Re-contacted a day later to answer standardized questions about
brands/companies talked about during past 24 hours
• Sample sizes to support time series analysis
– 700 respondents per week; 36,000 per year
– Yielding 8,000 conversational brand mentions week; ~ 450,000 per year
www.kellerfay.com
11
America’s WOM Conversation:
Surprising Insights from TalkTrack®
Word of Mouth Is Mostly Face-to-Face
73% of marketing-related conversations
take place in-person
The remainder are:
1. Phone (17%)
2. Email (3%)
3. Instant or text message (3%)
4. Online chatroom or blog (1%)
5. Other (2%)
Base: Conversations (All Categories, n=256,370 conversations)
Source: TalkTrack™, June 2006 through June 2007
www.kellerfay.com
13
Word of Mouth Is Mostly Positive
63% of brand references in word of mouth
conversations are “mostly positive”
…seven times the rate
of “mostly negative”
references (9%)
Implication: Don’t be afraid to engage in the conversation
Base: Brand Mentions (All Categories, n=176,622)
Source: TalkTrack™, June 2006 through June 2007
www.kellerfay.com
14
Word of Mouth Has Impact
(% highly likely to agree/take action, 9/10 on 0-10 scale)
55%
49%
49%
34%
Credibility/Believability of
What Was Heard
Likely to Pass Along to
Others
Base: Brand mentions where someone else provided advice (All Categories, n=110,183)
Figures represent percentage scoring a 9/10 on a 0 to 10 scale.
Source: TalkTrack™, June 2006 through June 2007
www.kellerfay.com
15
Likely to Purchase
Likely to Seek Information
Marketing & Media Are Key Part of WOM
Nearly 1 in 2 brand conversations refer to brand marketing or media
No Media/Marketing
Referenced
48%
Advertising
17%
Editorial/Programs
11%
Other*
1%
Direct mail/emailing
3%
Promotion
5%
Websites
(Company/Other)
4%
Point of Sale
6%
Base: 176,428 brand mentions
* Other includes sports arenas, concert arenas and events
www.kellerfay.com
16
Marketing & Media Play Key Role
50% of consumer brand conversations refer
to marketing or media
…led by television (15%)
Internet (12%)
point of sale (8%)
newspapers (7%)
promotions (7%)
Marketing and media are tools for encouraging WOM
Base: Brand Mentions (All Categories, n=175,205)
Source: TalkTrack™, June 2006 through June 2007
www.kellerfay.com
17
America’s Technology Conversation
© 2008 Keller Fay Group LLC
Not to be quoted or distributed without written permission
40% Talk about Technology Daily
(% of respondents having at least 1 conversation in category on given day)
Average Daily
Conversations*
% Respondents Having Conversation in Category
Food & Dining
57%
Media & Entertainment
55%
Beverages
46%
Sports, Recreation & Hobbies
43%
Telecommunications
42%
2.4
2.8
2.3
2.7
2.5
Shopping & Retail
40%
2.5
Technology
40%
2.4
Health & Healthcare
38%
Automotive
36%
Financial Services
32%
The Home
28%
Personal Care & Beauty
27%
Children's Products
Travel Services
Household Products
25%
23%
22%
Base: 36,511 respondents
*Average daily conversations among those who had discussions about each category
Source: TalkTrack®, January through December 2007
www.kellerfay.com
19
2.1
2.0
2.0
2.0
2.2
2.6
1.9
1.8
Computer Hardware & Consumer Electronics
Leading Topics of Tech WOM
(Percentage of Total Technology TalkShare™ for each brand category)
•
Video gaming (20%), computer software (9%), and cameras (3%) make up the remainder of word of
mouth in this category.
Computer
Software
9%
Cameras
3%
Computer
Hardware
38%
Video Gaming
20%
Consumer
Electronics
30%
Base: Branded Technology Mentions (Total, n=23,782)
Note: These mentions are categorized as “technology” by Keller Fay Group, regardless of what category a respondent places them in.
Source: TalkTrack®, January through December 2007
www.kellerfay.com
20
Holiday Peak for Electronics & Gaming WOM
(Percentage of technology brand mentions among all brand mentions)
•
•
Video gaming and consumer electronics WOM peaked during the December holidays.
Recently, electronics WOM is making a modest rebound.
Technology Brand Mentions as a Percentage of All Brand Mentions
(4 week rolling average of technology brand talk)
4.0%
Computer Hardware
Consumer Electronics
Video Gaming
Computer Software
Cameras
3.0%
2.0%
1.0%
0.0%
2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007
W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E W/E
Jul Jul Jul Aug Aug Sep Sep Oct Oct Nov Nov Dec Dec Dec Jan Jan Feb Feb Mar Mar Apr Apr May May
02 16 30 13 27 10 24 08 22 05 19 03 17 31 14 28 11 25 11 25 08 22 06 20
Base: All Categories Monthly Mentions (June, n=21,760; July, n=27,191; August, n=26,959; September, n=27,180; October, n=21,793;
November, n=28,145; December, n=28,795; January, n=44,367; February, n=32,314; March, n=38,347; April, n=22,133; May, n=25,854)
Source: TalkTrack™, June 5th 2006 through May 27th 2007
www.kellerfay.com
21
Polarity of Word of Mouth by Category
Quality of WOM Varies Widely in Technology
•
Computer software and hardware fall below the average Net Advocacy. Although cameras are low in
terms of quantity of WOM, they earn the highest Net Advocacy.
Negative
Mixed
Positive
Net Advocacy
(positive less mixed and negative talk)
-8% -15%
All Categories
Technology Category
-8%
-17%
65%
42
66%
41
Cameras
-4%-11%
77%
62
Video Gaming
-6% -12%
75%
57
Consumer Electronics
-6% -16%
Computer Hardware
Computer Software
-9%
-16%
68%
-18%
62%
-25%
48%
Base: Branded Conversations (All Categories, n=133,304; Technology Category, n=10,803; Cameras, n=292; Video Gaming, n=1,175;
Consumer Electronics, n=3,396; Computer Hardware, n=4,366; Computer Software, n=942)
NOTE: Technology category results includes conversations/brands that respondents group in this category, whereas cameras,
video gaming, consumer electronics, computer hardware/software may have been mentioned by respondents in any category.
Source: TalkTrack®, January through December 2007)
www.kellerfay.com
22
46
35
7
Even Most Tech Conversations Face-to-Face
(How word of mouth conversation was conducted)
•
Tech WOM and usage seem to go hand-in-hand as online communication modes perform slightly
better than the average for all categories.
76%
All Categories
73%
Technology Category
Online (NET)
All Categories: 6%
Technology: 10%
17% 16%
3%
Face-to-face
Phone
4%
Email
Base: Conversations (All Categories, n=187,790; Technology Category, n=11,876)
Note: Percentages may not sum to 100 due to rounding.
Source: TalkTrack®, January through December 2007
www.kellerfay.com
2%
4%
IM/Text message
23
1%
2%
Online
chatroom/blog
2%
1%
Other
Polarity of Technology Word of Mouth
Online WOM Less Positive Than Offline
Negative
Mixed
Positive
Net Advocacy
(positive less mixed and negative talk)
Consumer Electronics
Offline Conversations
-6% -16%
68%
46
Consumer Electronics
Online Conversations
-7%
-20%
63%
36
Computer Hardware
Offline Conversations
-9%
-18%
62%
35
Computer Hardware
Online Conversations
-8%
Computer Software
Offline Conversations
Computer Software
Online Conversations
-15%
-25%
-20%
59%
-24%
49%
-29%
37%
Base: Branded Conversations – Offline/Online (Consumer Electronics, n=3,024 / 317; Computer Hardware, n=3,927 / 376; Consumer Electronics, n=3,024 / 317)
Source: TalkTrack®, January through December 2007
www.kellerfay.com
24
31
9
-17
Apple’s Online and Offline WOM
Sometimes Similar, Other Times Different
2.0%
Net Offline
Net Online
1.8%
Moving independently
1.6%
1.4%
Moving together
1.2%
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
2
3
5
3
03
24
05
26
17
07
28
06
27
15
18 r 11
05
26 p 16 t 07 t 28 v 25 c 16
01 r 22 y 13 n 03 n 24 l 1
l 0 ul 2 g 1
n
n
b
g
g
u
c
c
a
a
ep
ep Oct
ov
ov
ec J an J an
pr
p
e
o
e
u
u
a
a
e
u
u
u
Ju
J
J
J
J
O
O
J
J
S
S
N
N
D
F
M
A
A
S
N
D
A
M
A
A
/E
/E
/E
E
E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
W
W W/E W/E W/E W/
W W/E W/E W/E W/
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
7
06 006 06
06 006 006 006 007 007 007 007 007 007
07 007 200
07 007 007 007 008 008
06 006
07
07 007 007
20
2
20
2
2
20
2
20
2
2
2
20
2
2
2
2
2
2
2
2
2
2
2
20
20
20
2
Base: Total Conversations 4 week average (Offline, n=15,416; Online, n=1,222)
Source: TalkTrack®, July 2006 through December 2007
www.kellerfay.com
25
Relationship Between Online & Offline WOM
Also Varies for Dell
2.0%
1.8%
Net Offline
Moving independently
Net Online
Moving together
1.6%
1.4%
1.2%
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
2
3
5
3
03
24
05
26
17
07
28
06
27
15
18 r 11
05
26 p 16 t 07 t 28 v 25 c 16
01 r 22 y 13 n 03 n 24 l 1
l 0 ul 2 g 1
n
n
b
g
g
u
c
c
a
a
ep
ep Oct
ov
ov
ec J an J an
pr
p
e
o
e
u
u
a
a
e
u
u
u
Ju
J
J
J
J
O
O
J
J
S
S
N
N
D
F
M
A
A
S
N
D
A
M
A
A
/E
/E
/E
E
E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E
/E W/E W/E
W
W W/E W/E W/E W/
W W/E W/E W/E W/
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
6
6
7
6
7
7
7
7
7
7
8
8
6
6
6
6
6
7
7
7
7
7
7
7
0
0
0
6
7
7
7
0
0
20
20 200 200 200 200 200 200 200 200 200 200 200 200 200 200
20 200 200 200 200 200 200 200 200 200
20
20
Base: Total Conversations 4 week average (Offline, n=15,416; Online, n=1,222)
Source: TalkTrack®, July 2006 through December 2007
www.kellerfay.com
26
20
06
W
/E
20
Ju
06
l0
20 W/
2
E
06
Ju
W
/E l 23
20
A
06
ug
W
13
/E
20
S
06
ep
W
03
/E
20
S
06
ep
W
24
/E
20
06
O
c
t1
W
/E
20
5
N
06
ov
W
05
/E
20
N
06
ov
W
26
/E
20
D
07
ec
W
17
/E
20
Ja
07
n
W
07
/E
20
Ja
07
n
W
28
/E
20
Fe
07
b
W
18
/E
20
M
07
W ar 1
/E
20
1
A
07
pr
W
01
/E
20
07
A
p
r2
W
20 /E M 2
07
ay
W
13
/E
20
Ju
07
n
W
0
20 /E J 3
07
un
24
20 W/
E
07
Ju
W
/E l 15
20
A
07
ug
W
05
/E
20
A
07
ug
W
26
/E
20
S
07
ep
W
16
/E
20
O
07
W ct 0
/E
20
7
07
O
c
t2
W
/E
20
8
N
07
ov
W
25
/E
20
D
08
ec
W
16
/E
20
Ja
08
n
W
06
/E
Ja
n
27
Microsoft’s Online WOM Is Far More
Volatile than Its Offline WOM
2.0%
www.kellerfay.com
Net Offline
Base: Total Conversations 4 week average (Offline, n=15,416; Online, n=1,222)
Source: TalkTrack®, July 2006 through December 2007
27
Net Online
1.8%
1.6%
1.4%
1.2%
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
Online vs. Offline WOM
• Much more happens Offline
• Offline and Online WOM are not the same
– Offline is more positive; online more negative
– The two forms often follow different trajectories
• Yet, instinctively, we know the Internet is vital to word of
mouth, particularly in the technology category
• Smart marketers will understand and seek to maximize
WOM in both offline and online channels
www.kellerfay.com
28
The Internet’s Vital Role Is in
Supplying Content to WOM
(% citing marketing or media source in conversation)
All Categories
Technology
WOM
45%
51%
Television
14
11
Internet
11
20
Newspaper
6
6
In Store Display/Video
5
8
Direct Mail/E-Marketing
4
5
Magazine
4
6
Coupon/Circular
5
3
Radio
2
2
Product Package
3
4
Product Sample
3
3
Billboard Ad
1
1
Percent of Brand Mentions Involving
One or More References*
Base: Brand Mentions (All Categories, n=132,421; Technology Category, n=12,395; Offline, n=11,230; Online, n=1,165)
*Respondents are able to select up to two media/marketing references, so percentages do not add to the top summary row.
Source: TalkTrack™, January through December 2007
www.kellerfay.com
29
Company Websites, Online Ads, Online
Reviews Important in Driving Tech WOM
(% citing specific media element in conversation)
All Categories
Technology
45%
51%
Television Ad
9%
8
Television Program
6
3
Company Website
4
6
Internet Ad
3
6
Internet Blog or Chatroom
1
2
Online Consumer Reviews
1
4
Other Website
2
3
Newspaper Ad
4
4
Newspaper Article
2
2
Magazine Ad
2
4
Magazine Article
2
3
Radio Ad
1
1
Radio Program
1
1
Percent of Brand Mentions Involving
One or More References*
Television
Internet
Newspaper
Magazine
Radio
Base: Brand Mentions (All Categories, n=132,421; Technology Category, n=12,395; Offline, n=11,230; Online, n=1,165)
*This table only includes media channels (e.g. excludes POS, promo, etc.). Media sums will not always add to the totals on the
previous slide because respondents sometimes select more than 1 item in the same media group (radio ad & program).
Source: TalkTrack®, January through December 2007
www.kellerfay.com
30
Who Are the WOM Leaders in Tech?
© 2008 Keller Fay Group LLC
Not to be quoted or distributed without written permission
Quantity of Word of Mouth
Dell Leads in Terms of WOM Volume
(Technology brands with most mentions in TalkTrack® for 2007)
•
Consumer electronics, computer hardware, and gaming are equally represented with three brands
each in the Top 10.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Dell Computers
Sony
Microsoft
Apple Computer
iPod
HP
Nintendo
PlayStation
Samsung
Xbox
Base: Technology Brand Mentions (Total, n=28,503)
Note: Brands are color coded to indicate which technology brand category they belong to.
Source: TalkTrack®, January through December 2007
www.kellerfay.com
32
Quality of Word of Mouth
Cicso & Nintendo Lead in WOM Quality
(Based on Net Advocacy: Positive less negative/mixed word of mouth for 2007)
•
Camera brands, which do not even make it on the top 10 list in terms of quantity of word of mouth
(previous slide) appear when looking at WOM Quality (as measured by Net Advocacy).
1. Cisco/Linksys
2. Nintendo
3. Halo
4. Kodak
5. Canon
6. Intel
7. Creative Labs
8. Xbox
9. PlayStation
10.iPod
Base: Branded Technology Conversations (Total, n=12,12,689)* (* Brands with 50 or more mentions)
Note: Brands are color coded to indicate which technology brand category they belong to.
Source: TalkTrack™, January through December 2007
www.kellerfay.com
33
In Summary
• WOM is a powerful driver of consumer technology
• WOM works differently than you might expect
– Mostly offline
– Mostly positive
– Often driven by advertising and other marketing
• The Internet is key, but not the way you expected
– Provides content to offline WOM
– Must align offline and online marketing strategies
– Need measurement approaches to capture both offline & online
• Your brand can be a WOM leader
– Use marketing to drive higher levels of talk
– Product quality and best customers key to high quality talk
www.kellerfay.com
34
Thank you!
[email protected]
© 2008 Keller Fay Group LLC
Not to be quoted or distributed without written permission
Ed Keller, CEO
•
•
•
•
•
•
•
President of Word of Mouth Marketing Association (WOMMA)
Has been called “the godfather of word of mouth marketing research”
Former CEO of RoperASW, a top 20 market research firm
Co-author of business bestseller The Influentials, a 2004 Berry-AMA Award
finalist for most important marketing book of the year
Two decades working with Influentials™ segment
25-year veteran of market research industry; board member Advertising
Research Foundation (ARF); 2005-06 President of the Market Research
Council
Visiting Lecturer at University of Pennsylvania’s Annenberg School of
Communication, Spring 2006
www.kellerfay.com
36
Keller Fay Group
Keller Fay Group
65 Church Street
3rd Floor
New Brunswick, NJ 08901
732.846.6800 (Tel)
732.846.6900 (Fax)
Ed Keller, CEO, [email protected]
Brad Fay, COO, [email protected]
www.kellerfay.com
37
The Keller Fay Group
Bringing best-in-class tools to word of
mouth strategy and measurement