“The rewards of pursuing excellence in word of mouth marketing are quite huge, and it can deliver a sustainable and significant competitive edge few other marketing approaches can match.”

“In the mobile phone market…we have observed that the pass-on rates for key positive and negative messages can increase a company’s market share by as much as 10% or reduce it by 20% over a two-year period, all other things being equal.”

“Experiential word of mouth is the most common and powerful form, typically accounting for 50 to 80 percent of word of mouth activity in any given product category.”

Click on the image below to download the fulll article:

During this hour long webinar, Jake Pearce and Cornelis Boertjens from The Village Square will explain how you can use powerful yet simple WOM Marketing strategies to transform your business. You will learn how to implement WOM Marketing using a smart system. This will dramatically increase the efficient use of your marketing resources and dramatically increase your bottom line!

You will also see the results of an interesting poll we did during the webinar

“How to use Word of Mouth Marketing to dramatically increase your profits”

What will you learn?

During this hour long FREE webinar, Jake Pearce and Cornelis Boertjens from The Village Square will explain how you can use powerful yet simple WOM Marketing strategies to transform your business. You will learn how to implement WOM Marketing using a smart system. This will dramatically increase the efficient use of your marketing resources and dramatically increase your bottom line!

When: Tuesday 23 February 9 am – 10 am AEST, 10 am – 11 am AEDST, 12 pm – 1 pm NZT

Registration: Limited spots available by invitation only. Secure your spot now by registering online: https://www1.gotomeeting.com/register/386505512

Oh no; homework:

Choose a branded product or service you want to max out using WOM Marketing before you come on the webinar. It has to be an existing product/service or a new one you would like to market to your existing database. By the end of the call, you’ll have great insights into how to use the WOM Marketing as a system to dramatically increase your bottom line!

And in case you want to chat beforehand:
Get in touch with Damien Stone via damien@thevillagsq.com or +61 404 094205

The intention of this short piece is to communicate the key facts which demonstrate unequivocally that Referral Marketing is a subject corporations should know more about.

We have three objectives:
1. To ensure our Top Referrers have this information readily available first
2. To allow internal champions a simple way of learning about the key issues fast
3. To provide the key facts for Senior Management and place Referral Marketing firmly on the agenda.

It is quite deliberately punchy, fact based and dry – we want to allow the reader to feel the rigour of the business case. We will be providing a full white paper on the subject forthwith where the content will be provided in a more ‘leisurely’ vs ‘soundbite’ style.

Click here to read the full study in PDF format

“Women don’t buy brands, they join them.” Tom Peters

Summary

1. Trust in ‘The Corporate’ is in crisis – corporations are spending more than ever in history saying ‘trust us’ but we don’t.¹
2. There is evidence that a protracted ‘Brand Valuation Bubble’ is likely due to overvaluation of brands as this ‘trust’ erosion makes itself evident.^1,2,3
3. The recent recession has seen all but IBM and Coca-Cola’s brand valuations drop.²
4. Why? Marketing is one contributor to this failure – Marketing is less effective at persuading people in general and specifically around trust.
5. TV advertising, the traditional driver of both trust, awareness and conversion is being asked to do too many things at once and we need to change our approach.^6,7,8,9
6. We need a truly integrated model where traditional channels drive awareness and conversion is driven through other channels, specifically Referral channels from peer groups, the trouble is most marketers don’t know how to do that.⁶
7. The key Referral Channels are Word of Mouth, (WOM) Word of Web, (WOW) Word of E-mail (WOE) and Word of Cell (WOC).
8. 80-90% of all Brand Conversations happen through face to face conversation (WOM) – only 10% through other channels.⁴
9. Most corporates are using the 10% of channels as essentially a ‘push’ medium – pushing messages just as messages were pushed through traditional media – this approach is effectively adding to distrust as it is inauthentic and leading companies to be ‘caught out’.⁹
10. Word of Mouth is the most trusted Communication Channel there is and it is also the most trusted messaging medium there is.⁴
11. Why isn’t “Word of Mouth Marketing” (WOM) higher up the corporate and marketing agenda? We suggest it is a lack of knowledge and education in this area.
12. This issue has entered the agenda of TEC – the largest global CEO organisation for Better Leadership Worldwide.
13. Referral Marketing is a ‘trend’ not a fad according to a) International surveys from the US, NL ¹¹ and b) the recent establishment of Referral Membership organisations globally.^10,11
14. Referral Marketing can be applied in three ways to an organisation – as a WOM pulse, as a marketing approach or at an organisational level.
15. In all cases TVS emphasise introducing it to your organisation through a series of low risk, low investment managed projects to allow your organisation to understand its value and fit.
16. TVS is the only company with a specialist system to magnify Referrals positively – and give you better financial efficiency for your marketing dollar.

Bibliography

¹ Yankelovich Report 2006
² The Brand Bubble, Gerzema and Ledbar 2008
³ Interbrand ‘Best Global Brands 2009’
⁴ AC Nielsen – “Trust in Advertising” & Kellar Fay Group
⁵ The 2009 Barkley Cause Survey/PR Week
⁶ McKinsey – Boosting Returns on Marketing Investment 2005
⁷ iCrossing “connected brands scorecard” October 2009
⁸ Seth Godin “Meat Ball Sunday”
⁹ Joseph Jaffe – Join the Conversation
¹⁰ www.womma.org
¹¹ DM Barometer – DDMA The Nethelands

A picture tells a thousand words….

Before we continue we have some “Thankyous” to give out:

Thanks to all our Top Referrers for the opportunity in Holland, the guidance in the UK and the warm welcome back to NZ. As most of you know we’ve been in the UK/Europe for 2 months (Cornelis even 3 months) delivering training and assessing if, how and when to enter European markets.

Firstly thanks so much to all those people who made us feel so welcome in The Netherlands – everyone from Cornelis’ Mum (for putting up with our temporary office) and Dad (for being out Top Referrer), to Vodafone in Amsterdam, to Ebius Organisatieontwikkelaars – specifically Egbert, Bianca and Astrid -, to NIMA, to Rabobank, to Groningen Seaports. Thanks also to all those in the UK – the Brand Gym, Tony Franco, Catherine Armstrong, Brand Learning, Oxford Strategic Group and Glenndinning who took the time to talk to us about the UK market.

We just finished a course last week in NZ with Vodafone, TechNZ and Freeview to name a few – thanks for your welcome back! Thanks also to Sue McCarty and Amy Bullen from the New Zealand Marketing Association for allowing us to work with them.

So with this said; Is WOM just a fad? Are advocates just full of huff and puff?

The Dutch don’t think so….in fact quite the contrary – look at this data. A recent study done on WOM in the Dutch market from the DDMA (the Dutch Direct Marketing Association) one of our partners in The Netherlands, shows that 31% of companies over there are now going allocate marketing budgets to WOM. And 97% of all companies state that WOM is not a hype, here to stay and will be part of the marketing mix. Also interesting to note is that 70% of companies in The Netherlands realise that the power to influence the buying decision now rests with their customers and no longer with the organisation behind the branded product/branded service.

But what do you, our audience think?

Jake has written this article for Marketing Magazine and the full article can be read on the Stoppress website: Continue Reading…

John Travolta once said “it’s taken me 10 years to become an overnight success”

For years the Ivy arguably the most successful restaurant in London was unsuccessful – we spoke to one of the old managers there and found out how they turned it around.

Introduction – Restaurants should have WOM right, right? Wrong?

Restaurants are one of the ultimate Word of Mouth case studies – chefs and owners often pride themselves on their food being so good that they don’t have to advertise. Well Gordon Ramsey, among others have shown that beneath the facade of bright lights and smooth wooden surfaces lie not only profit challenges but a hit and miss approach to word of mouth.

The Manager of the Falls Restaurant (itself a fusion of informal formality with stunning food) gave us the inside track:

Alan Parry told us a story of the Ivy’s original owners, Chris Corban and Jeremy King, and their first famous venture, Le Caprice. Now the official History of the Ivy and Le Caprice can be read on their website – it does not read like the true story…and it isn’t) of this piece but the unofficial story holds the gems:

• The owners refused to advertise for years, they wanted to rely on Word of Mouth – which it expected to ‘just happen’ because the food was good
• For years it remained quiet
• You see if you rely totally on your regular customers to ‘expose’(the first step of our model) ie make people aware of your products and don’t treat them as team players, they won’t help you
• If you have no other ‘exposure’ tools – any form of PR, communication etc – well you are doubly exposed as you can’t do the basic model – Comms – makes people aware and Referrers convert to customers
• Referrers won’t help you if they don’t feel that you need your help – too many companies are afraid to ask or do it in the wrong way with ‘get us a friend’ models
• Generally speaking – 9/10 you can get the vibe if someone is a fan of you or not – they will be only too glad to ‘expose’ your product but they need to know you need it or they assume you are ok
• Le Caprice wallowed for 2 years and nearly went under – it’s ‘the food speaks for itself’ thing was a gamble – it could have worked but it didn’t
• They had no Referral Marketing Plan in place and they weren’t asking for ‘help’ in the right way
• A lame example of this is the sign “if you think we are good tell others” – why would I tell others if you haven’t made me feel important or enrolled, it’s just a sign
• In TVS terms –Chris and Jeremy refused to expose itself using our model and especially through it’s Top Referrers – it had nothing in place to do that
• Furthermore like most ‘jazzy’ restaurants – they focus on the famous as opposed to ordinary fans – and the famous are fickle…luckily however
• One day Mick Jagger’s PA rang up and said to the owner – Mick wants a pumping restaurant is that you?
• The owner pluckily said yes she’s heaving. Sweating he put down the phone, rang all his mates and in a panic said get here I’ll give you food for free
• When Mick and his entourage the restaurant was pumping with his ‘team players’ his mates and Mick was happy
• They never looked back. Soon they started The Ivy then a few years later J. Sheekeys. All three were in Zagat’s 10 most popular restaurants. – it has been a success
• You can’t book a table in The Ivy – there are too many Tom Cruises, Madonna’s, Guy Ritchies (thought not at the same time) and Paris before you

Our Conclusion – use ‘Buzz’ with TVS system’s superconductors

In reality a lot of what gets called PR – is buzz, a superficial intense burst of activity with influencers followed by nothing

The mistake is to assume celebrities are the only influencers in the world – they only influence other celebrities – the trick is to use ‘superconductors’ and celebrities. Think of celebrities as ‘awareness’ and superconductors as ‘converters’ of the aspirational people. A superconductor is one of those people who has a wide network in many different worlds. They aren’t just the ‘connectors’ but the ‘connectors’ of the ‘connectors’.

You can only get to superconductors if you map your Top Referrers Social Networks….more of that in Wordvine 2.

Here is an example of a superconductor with his name changed:

Lavoir is a French DJ who lives in NZ but tours in Europe and Tahiti. He is multi talented – he is highly respected in the DJ world by other DJ but his music is far from mainstream. He has a unique mixture of skills and started working in digital TV in the UK right at the start where he learned TV production and how to use design in the right way to pull in audiences. He is a superconductor because he connects:

• The world of top DJ’s
• The world of Entertainment
• The world of Graphic design
• The World of France with the World of NZ

By enrolling Lavoir you suddenly have a key influencer in 3 worlds not just one. He is not fickle and knows what he wants

We’ve told you about Top Referrers – would you like to know the system to identify Superconductors? This is our new love for this weeks blog!

With many thanks to Alan Perry at The Falls restaurant for this story – we refer their environment food and informal, formality.

Dear Jake,

Thanks for getting in touch, and please accept my apologies for the delay in coming back to you. As you might have guessed it’s been a fairly hectic couple of weeks for the business! I also wanted to thank you for giving us a ‘right of reply’, something that not everyone in the media has been prepared to do of late.

I guess the first thing I would like to get across is that we understand that changing something that is as well known, and as well loved, as Cadbury Dairy Milk was never going to be an easy process. However, I do want people out there understand why we did it.

Essentially, we decided to change Cadbury Dairy Milk for two main reasons: firstly, to make our chocolate slightly softer to bite; and secondly, to ensure our chocolate remained affordable. Both of these changes were actions our research showed that consumers clearly wanted.

The reality is also that the price of key ingredients, such as cocoa, has skyrocketed over the last two years. Much of this has been driven by speculative investors looking for short-term financial gains in commodities at a time when established equity markets are not delivering the returns they once did.

For confectionery manufacturers like Cadbury we have to live with the after-effects of this activity. Cocoa is our key ingredient, something we don’t use as financial hedge, rather as the foundation for all the chocolate we make.

For most of the last 2 years, in which cocoa prices have doubled, our business has taken this on the chin. We’ve soaked up the price hikes whilst trying to minimize the cost impact to consumers.

Of course, all good things come to an end. Faced with ongoing price rises of key ingredients, increasing labour costs and regular inflation we reached a point where, despite our best efforts, the price of a block of chocolate was reaching $5 in markets such as New Zealand. For many Kiwi families this took Cadbury Dairy Milk over the threshold of what they regarded was ‘affordable’ for a treat such as chocolate.

So as a business we had to change our approach – you can’t simply ignore the evidence that your flagship product may be going ‘out of reach’ for the everyday shopper.

Now let me tackle one of the central accusations head on: We’ve downsized our product to boost corporate profits and fleece the consumer. Simply untrue!

Like some of our competitors we could have reduced the size of our Cadbury Dairy Milk range without dropping the price. We could have claimed our product downsize was ‘portion control’ designed to respond to concerns around obesity, whilst keeping prices constant. We decided not to because we thought there was a better, more honest way of facing these issues.

As a business we thought it was better to reduce the size of Cadbury Dairy Milk, yes to decrease our exposure to expensive ingredient costs at a time when all business costs are under close scrutiny, but also to ensure that everyday consumers could still afford to buy our product. So we reduced the size of our blocks and the price we charge retailers and in doing so we have tried to do the right thing both as a business and by our consumers.

I am sure that you will understand far better than most that it would be commercial suicide for a company such as Cadbury to make all of these changes without considerable thought; and I can assure you that we tested and re-tested consumers throughout New Zealand and Australia to ensure that the changes we made to Cadbury Dairy Milk would be liked by the vast majority.

Despite the current uproar, I am confident that the overwhelming majority of people out there will continue to love our chocolate and I hope, in time, will better understand and appreciate the reasons why we made these changes.

Regards

Mark

Mark Callaghan
Managing Director – Aust & NZ
636 St. Kilda Road
Melbourne Victoria 3004