Word of mouth marketing - this is the essence of Sam Decker these days. Sam has spent his career as a marketing leader maximizing technology and online business results. Sam is now bringing his expertise into the market as the VP of Marketing & Products for Bazaarvoice. Many of you may know Sam from his blog (Decker Marketing) that frequents the top 25 blogrolls these days. Others may know his name from being a pioneer of dell.com - or perhaps on of his books (301 Do It Yourself Marketing Ideas). I am proud to disclose that I know of Sam during the time I worked for and with him at Dell.
His new gig, which ventures into the uncharted waters of word of mouth marketing and its impacts on things such as branding and product success, are quite timely. Consumer ratings, blogs, podcasts, and other viral marketing tactics have become quite hot. Recently Sam posted on a new study from Keller Fay that comments on the quantitative nature of word of mouth marketing. But, many in the traditional marketing circles wonder if this is fad or future.
So I decided to ask Sam 3 key questions to help put some perspective on all the hype.
CRAIG: Sam, at Dell we were big believers in “if you can’t measure it, you can’t manage it.” How can companies justify allocating cash to something as soft as word of mouth marketing?
SAM: I started my career in word of mouth and startups and then spent 7 years at Dell. Which means, if I’m going to back to startups you can bet it has to be measurable! We’re in a sweet spot – this is word of mouth that you can measure. There’s no soft stuff. PETCO saw 35% higher conversion and 40% higher average order value with a top rated products path. Burpee saw 43% higher click through on RSS with customer reviews. Golfsmith saw 55% higher revenue per email with rating/review info. Because customer ratings and reviews are part of a web site or RSS or email experience, you can measure this. And the ROI (according to my calculations from actual client results) can be 5000%.
With that said, I’m excited about the future that this is a Trojan Horse strategy to help companies become more customer centric and think more about the “soft stuff”. I’ve come to the conclusion that there are good things to do and decisions to be made that can’t be measured – at least within a week or even a quarter. Balance and moderation are the key to a healthy company…I talk more about this in my recent post on Measurement.
CRAIG: Recently we have seen a resurgence of online media expenditures as a percentage of total marketing budgets in the Fortune 500. Do you see word of mouth marketing becoming a stand alone incremental line item in a budget – or do you see it just stealing dollars from traditional areas such as Direct, Mass, or Online Advertising?
SAM: Unlikely. But I also don’t see Word of Mouth (as an objective) tied exclusively to media budget. In fact, if I was CMO of a large B2C company I’d take money away from media and move it upstream to improve the product and create tools and strategies to enable customers to spread the word. Word of mouth has little to do with placing online ads – unless you want to define word of mouth as viral marketing to spread word of mouth about the advertising. The most successful companies (sustained) are built on word of mouth about their products/services, and they have to spend less on marketing. See my post on the Word of Mouth Company.
In a much smaller scale, even in our B2B startup, that’s what we’re doing here. I’m VP of Marketing and Products…which means I want to spend as little money as possible and make sure our product (and hold our services team accountable) for creating a great solution that every client wants to tell others about. As a VP of Marketing who eats his own advice, I will have accomplished my job if that’s how we grow our business.
CRAIG: Most think of word of mouth marketing programs when you want to build brands or sell products more effectively. Do you think that it has potential as an effective tool to be applied within a company – say employee morale, retention or hiring techniques?
SAM: Craig…you are more insightful than you know! Absolutely. Word of mouth is not advertising and marketing – it’s the likelihood of someone to spread the word regardless of the topic. And it’s as relevant outside the company as it is inside the company. It effects your perception of morale, your personal brand, as well as moving initiatives along. I think political consultants understand this. Unfortunately, I doubt if any HR and organizational development folks will embrace word of mouth as a concept.
Most of my Dell career was spent in change leadership roles. Looking back at launching eBusiness, customer centricity, Hispanic marketing, segmentation, and other projects I now recognize the internal word of mouth made an enormous impact on driving these initiatives. Certain soundbytes or stats I'd talk about would spread, if said the right way to the right people. When certain influencers and connectors in the organization started using the same language I was presenting, others started to pay more attention. Most importantly, when pilot results came out, others wanted to spread the word on what happened - because there was so much built up prior to that point.
I think it is safe to believe the hype. Thanks, Sam.
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