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

Great Comments in relation to why has trust in corporate gone down?

Thanks so much for the comments. Richard is saying that WOM is working precisely because companies are not wanting to connect with society and from what JR is saying a lot of that is to do with being too busy making money – pressure.

Yet that pressure comes from where society so – the conclusion is that corporate aren’t engaging with society because society wants them to make money. Circular?

Let’s see how this plays out with Cadbury shall we? We can test the hypothesis.

Cadbury

67% of you thought that companies, in general, no longer nurture relationships with society. That is why trust is dropping. So let’s look at how Cadbury responded – we were coming from a place of wanting to give a right of reply – as we are on the side of corporates clearly!!! (well most…)!!!

We have sent an e-mail to Mark Callaghan – Managing Director of Cadbury. Having struggled to find their details (their website avoids individual head office people’s details http://www.cadbury.com.au/About-Cadbury/Contact-Us.aspx) we decided to call and we got through to Andrea his PA. She did what a good PA should do – “I won’t give his work e-mail but send it to me”. This (‘privacy’) issue is tricky now – should she have done so (?) – her job is ‘protect him’. However should this policy change (?) – especially since – one minute later on linked-in we had it figured (and we wouldn’t be alone) since linked-in is the second fastest growing social network site.

So for those of you who attended our course – where the ‘involvement’ pillar was key – what impression of ‘making it easy to hear from the consumer does this convey?’

Twitter – should we be on it?

One of our community has been asked by her CEO “Should we be on Twitter? It’s a risk because they might say bad things about us” says her CEO. (No we won’t be naming who even if you pester us drunk ok?)

Well we will continue this next week – but first up we need to be clear as to the motivation for being on twitter before we answer the question:

Some examples:

For 1 – Media Companies like CNN, BBC and others are using it as a channel for awareness/traffic

For 1 – High Profile Individuals http://twittercounter.com/pages/100/0

For 2 – Companies are being ‘forced to’ in the US – locally Telecom has a formal twitter team and Vodafone has an informal one (http://twitter.com/telecomNZ)

For 3 – Sales Generation – mainly independent ‘mini-preneurs’ – connecting with individuals in corporate or selling DIY products/IP

For 4 – The big question – there is little data on this – we’ll let you know next week – we are digging.

See you next week!

Jake and Cornelis

Let’s give Cadbury a chance shall we – we thought we’d give Cadbury the right of reply so we will be e-mailing this link to them – specifically the Marketing Director of Australia & NZ.

It seems that the first majority of us think that Cadbury are up to some sort of mischief. Over 90% of voters think that Cadbury are sneaking in a way to make more money and getting it under the radar.

Consumer trust in corporate(s) plummeted in the 90’s at the same time as corporate spending on ‘being good citizens ’ went exponential – for the first time marketing had truly failed.

In judging Cadbury – We are being like consumers – viewing corporate(s) as self serving and evil:

• Are you evil?
• Is your company evil?

We suspect you would say no – and yet when looking at another organisation we seem to judge them differently to ourselves. Why is this – it’s very important – it undermines the importance of Referral Marketing of course but you’d guessed that already. When advertising first started – advertisers were genuinely viewed as great citizens – allowing consumers to navigate away from ‘rip-off’ merchants to companies who were successful enough to advertise. (Source Permission Marketing – Seth Godin). It was P&G’s mastery of this evolving medium in the 40’s that gave birth to the current model as we know it.

The Yankelovich report of 2006 shows that as corporate spending on being ‘seen to be good’ went exponential so too:

• Consumer trust in corporate (s) plummeted to an all time low at the same time as advertising spend on ‘being good’ went exponential
• In fact the University of Chicago showed that we trusted religions, governments – in fact everyone less.
• In other words we didn’t believe the million dollars in advertising telling us how nice corporate(s) were.

Marketing – for the first time in history had truly failed. We, the marketing community could not persuade people anymore. The reason? Well the one cited in the Yankelovich report is that essentially we spent more time on interactive media than broadcast media so messages didn’t get through. That explanation just seems too simple, too superficial and ultimately it leaves us (marketers) feeling powerless – doesn’t it?

Why has trust in corporate(s) dropped off – have marketers failed or are corporate(s) more evil?

What has changed, really, really, really? Take out the it’s harder to reach people argument – Let’s pose another hypothesis – has trust dropped off because

corporates are inherently less trustworthy? Less responsive? Less caring? So in fact all the spending in the world could not mask the ‘evil corporate’ because their day to day behavior was at odds with their claimed values.

That argument doesn’t work either. The motive of most companies has not changed in this century or the last – to make money for their shareholders. Of course some companies will take more risks than others and some are more greedy than others – but really nothing has changed.

It will be interesting to find out where we sit on this – and for you to reflect on the importance of Referrals more than ever. At the risk of ‘jumping the square’ – we’d like to get a broader feel on this for the community – so please forward it to a friend who might benefit from the answer.

Many thanks

The Anglo-Dutch TVS

Best

Jake & Cornelis

How do you mange it then?

Rounding off the GM Conversation:

So first up the GM poll:

• 80% say they will go under
• and 20% say they will float and survive

Either way – what is clear – for those who have been on The Village Square Wordvine Level 1 Course that a key issue for GM, as underlined by the US President was that they lost touch with their market. What we are keen to impress upon marketers is that the true value of setting up a Referral Marketing Network is not just about Referring but more accurate, cheaper and deeper research.

How much do you spend on Market Research? Well take all the qual budget and use it to set up a Referral Marketing Network – that’s one way to fund it.

Cadbury sneaking or putting the consumer first? Here are some facts for you to consider:

Cadbury:

• reduced the size of the 250g Dairy Milk bar by 20%
• reduced the cocoa from 26 to 21% in Australia and NZ
• they have also increased the oil content
• Cadbury were most recently voted most trusted brand in NZ

If you heard about this via WOM with nothing else
Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

Cadbury claims that:

• Consumers want chocolate that is easier to eat ie less crumbly
• Hence the chocolate chunks are smaller
• And the oil added makes it easier on the mouth

Whether this is true or untrue is not the key learning here. The key learning is that most people will hear about this via the increasingly adverse consumer reactions to the change. In fact a website has been set up to put pressure on Cadbury to change it back – in addition to a twitter feed.

It will be interesting to see how Cadbury manages this situation and to see what the impact will be on their perception of trust.

We look forward to seeing your votes.

Jake & Cornelis