What's the Word (of Mouth)?

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Customer Experience
Customer Experience
When it comes to word of mouth, power lies with the people, and now, with the proliferation of social media, this mode of publicity has the potential to become viral.

During this time of rapid technological development, companies have no choice but to open their ears and their eyes if they hope to absorb and analyze the vast amount of customer sentiment floating around in the ether. Today, word of mouth comes from both the customer's lips and their fingertips, as the written word holds much power in today's social landscape. But, if brands hope to grab hold of the insight resting in the palm of their hands, they must become engaged listeners that work to rectify issues and make consistent improvements along their journey.

From Facebook and Twitter, to Pinterest and LinkedIn, consumers share vast amounts of unsolicited insights every moment of every day. In fact, nearly 2.5 quintillion bytes of data are produced every day, with 80 percent coming from unstructured sources like social media, according to Gartner. But, just as the public's habits continue to evolve alongside today's progressive technologies, companies must begin to reassess their approach to gathering, analyzing, and acting upon word of mouth.

"By definition, marketing is used to help brands identify the customer, satisfy the customer, and keep the customer," says Erick Brethenoux, director, business analytics strategy at IBM. "And, while marketers have always tried to get to know their customers, they did so mainly by profiling them into broad demographics, such as "men 18-34." But today, relying solely on these categorizations can be detrimental to a marketing firm's success, as consumers now expect more from brands: not just good service, but hyper-personalized service. Beyond our ability to gather insight from social media tools, businesses must also begin to recognize the need for an enhanced customer experience and more direct customer engagement for increasing brand loyalty and satisfaction."

Sharing thoughts, opinions, and comments across the Web increases the potential for understanding, as this peek into consumer behavior allows companies to better respond to customer wants and needs. By acting upon this insight, brands can add the element of personalization in order to cultivate deeper customer relationships. While Facebook and Twitter posts often provide insight into the consumer's thought process, social platforms like Pinterest allow retail brands to boil down customer preferences right to the specific product, enabling them to assess what items are popular at a granular level.

For MGM, Facebook allows the brand to gather information from Facebook, taking each individual's "likes" into consideration in order to offer ads for concerts and performances that directly connect with the consumer's musical tastes. However, according to Deb Woods, vice president at Teradata Applications, MGM discovered poor conversions because these advertisements weren't taking consumers directly to the booking page, leaving many to drop off. But, by analyzing and acting upon this behavioral data, MGM saw a 15x return on investment, and more than three times the conversion rate of other campaigns simply by enabling personalized promotions that cater to customers' wants and needs.

However, for many brands, the speed and volume of such consumer data can lead to tricky execution. Now, brands must be aware of what people are saying about them through social and online channels at all times in order to answer questions and address concerns as they arise. The Big Data deluge continues to impact many brands as they seek to hire talented data wranglers who can sift through, analyze, and bring data to action before any potential negative sentiment gets out of control.

Stop, Look, and Listen to Prevent Viral Negative Sentiment

In many instances, negative consumer sentiment arises in the midst of misinformation. Many consumers form their opinion based on limited knowledge. Disconnected channels and siloed information also has the tendency to perpetuate inconsistency, which can lead to an interrupted communication flow and discontent. But, where there's an unhappy customer, there's an opportunity to build brand advocacy.

According to Brethenoux, the best way to recover from viral negative sentiment is to determine one's response on a case-by-case basis, as this is the key step in demonstrating true customer care. "Not only does a brand need to listen to the customer's inquiry or complaint, they must also pay close attention to the full context surrounding the issue at hand," emphasizes Brethenoux. "This entails two things: leveraging analytics solutions to uncover data-driven insights that pinpoint the customer's individual needs, and forming a close partnership with key players within one's own organization-from marketing and sales to customer service and point of purchase-who can help paint the full picture of the challenges the customer might be experiencing and the solution that can deliver satisfaction."

Brands must listen closely and completely, dedicating resources to monitor and interact with critical channels so as to not leave unanswered negative reviews posted on influential sites. As Deepinder Dhingra, head of strategy and planning at Mu Sigma, notes, social media offers an endless platform for communicating that can't be turned off. Therefore, brands must inject their influence by engaging in conversations, even in cases of negative sentiment, in order to bridge the gap and convert potential detractors into advocates.

Yet, while social media does provide much insight into how consumers perceive a brand, including what the company does right and what it needs to improve upon, many have the tendency to fixate on the negative sentiment bouncing around in cyber space, and neglect the overall customer experience. As Larry Freed, CEO of ForeSee, says, marketers shouldn't just pay attention to squeaky wheels.

"Social media is all about speed," Freed notes. "If we didn't have social, we'd be limited to talking to friends and family, thereby slowing our influence." However, today's landscape requires companies to take two steps in particular: prevent and recover. In recovery, brands seek to minimize the public aspect, neutralizing any negative sentiment before it becomes viral. But, in most instances, these steps to recovery have only prompted consumers to yell quicker and louder on said public platforms because they feel this is where they will get their resolution, essentially training consumers to go yell on Facebook or Twitter if they want someone to reach out and solve their problem. The prevention stage, however, seeks to monitor and detect problems before they come to a head instead of chasing the issue later. Otherwise, brands are then forced to react by going back and finding what's driving the experience. "As they say, an ounce of prevention is worth a pound of cure," Freed adds.

Pear Tree Greetings Incorporates ForeSee's Word of Mouth Index

For businesses that exist solely in the e-commerce space, marketers rely heavily on what customers have to say in order to help scale advertising and hone sales strategies. Pear Tree Greetings, the online personalized greeting card company, depends upon word of mouth to generate new business and boost the bottom line. To encourage recommendations, the brand created its referral program to not only increase growth, but to build meaningful customer relationships, as well. Now, when current customers recommend a friend, both parties receive a $20 credit, while Pear Tree Greetings donates another $20 to an area charity, tying the customer's purchase to the greater good.

However, in order to gauge customer satisfaction, Pear Tree Greetings remained strongly reliant on Net Promoter Score. As Stephanie Bottner, general manager, highlights, NPS offers simplicity, but fails to adequately balance true brand detractors from its advocates. Instead, the greeting card company chose to blend NPS with ForeSee's Word of Mouth Index (WoMI). With the WoMI in place, Pear Tree Greetings can assess how likely customers are to recommend the brand and how likely they are to discourage others from doing the same. This technique allows Pear Tree Greetings to go one step further and determine its true detractors, thus enabling the brand to focus its efforts on turning the potentially harmful individuals into promoters, whole boosting its customer satisfaction score in the process. Compared to the 2011 holiday season, word of mouth increased by 30 percent during 2012, and on the customer satisfaction scale, Pear Tree Greetings estimates that each point equals $1 million in added revenue, clearly exemplifying the power of word of mouth in today's competitive markets.

Kraft Australia Feeds Off of Vegemite Fan Feedback

Data flows into organizations as quickly as time passes. But, if brands hope to evolve alongside their target audience, they must adjust their strategies in order to maintain the same pace. For Kraft Australia, change came when the company recognized the need to reevaluate its marketing strategy with regard to its most popular product-Vegemite. To connect with the country's changing demographics Kraft Australia felt it was time to alter its longtime branding campaign to better serve the needs of its current targets. However, to do so, Kraft Australia partnered with IBM to generate deeper insights into how consumers view and use the beloved product in order to understand what market opportunities and potential threats lay ahead. In doing so, the incoming data and sentiment allowed the brand to cultivate proactive and consistent response measures for preserving the product's integrity.

Because the Vegemite brand remains popular and consistent, Kraft Australia wanted to uncover how the item was currently perceived. While Kraft Australia did learn that immigrants were unfamiliar with the product, they also discovered many latent fans that had grown up using the spread, but just needed a reminder to boost their affinity once again. Using IBM's Corporate Brand and Reputation Analysis (COBRA), Kraft Australia was able to monitor online chatter across blogs, message boards, and online news outlets in order to detect and react to comments that may prove detrimental in the future. After scanning nearly 1.5 billion posts of user-generated content across 38 languages, Kraft Australia found that customers were perfectly satisfied with Vegemite as it stands, with no need for flavor variations or varied jar sizes. Instead, these advocates sought to learn different ways to eat Vegemite, establishing the basis for Kraft Australia's new branding campaign.

EXPERT OPINION
EXPERT OPINION