“Word of mouth agencies and clients need to start talking money”

April 30, 2010 at 12:21 pm | Posted in Events, Measurement, Research | 1 Comment
Tags: barak libai, CRM, Measurement, roi, social media, social networks, WOM, word of mouth

This week, Professor Barak Libai gave WOM UK members a glimpse into the future of WOM measurement and ROI as he presented his latest research and thinking on the value of consumer conversation.

We were delighted that Professor Libai, Marketing Professor at Recanati Graduate School of Business, Tel Aviv University, and award-winning researcher on the economics of WOM, narrowly escaped ashgate to present to the brands, agencies, fellow academics and students who piled into Grey’s London offices.

He began with establishing the importance of CRM in the past 20 years, and the need to start seeing the value of WOM in CRM terms, focusing on both customer lifetime value (CLV) and social value, and the lifetime and social values of people’s wider networks.

While Professor Libai admitted that there are still big holes in our knowledge of exactly how value creation is achieved through WOM – “we don’t necessarily know how, but we know that before and after, something happened that led to sales” – he also emphasised that the volume of data we now have access to is enormous, and is leading to a revolution in quantifying individual and social contributions.

His own work in simulating social networks to investigate how and why brands WOM spreads, using models from biology and anthropology, prompted questions from a crowd eager to know how accurate these trials could be, and how soon we might see more scientific approaches to measurement.

Professor Libai’s own international perspective also led to a discussion about rates of uptake in different countries, and the session ended with a quick delve into the tricky area of measuring offline WOM before everyone got stuck into the free wine and some relaxed networking.

With Dr Robert East in the audience bringing his perspective to bear on the research, and a real variety of attendees, this was the sort of event we love – challenging, thoughtful and with a real community feel. Big thanks to sponsors Royal Mail and Grey.

Next up, on the 27th May, Richard Anson, Founder and CEO of Reevoo, talks about the value for brands of independent review sites online – make sure you pre-register now.

WOM UK April Thought Leadership event: Professor Barak Libai on ‘Assessing the value of customers’ word of mouth’

April 9, 2010 at 1:05 pm | Posted in Events, Measurement, Research, Uncategorized | Leave a Comment
Tags: barak libai, event, Measurement, Research, roi, social media, WOM

Book now for the first of our great free spring events on Tuesday 27th April, which brings renowned WOM researcher and speaker Professor Barak Libai all the way from Tel Aviv to London to give his latest insights to WOM UK.

The event is being held at Grey, The Johnson Building, 77 Hatton Garden, London EC1N 8JS from 4.30pm, with the presentation at 5-6 and relaxed discussion, drinks and networking extending until 8pm. It’s essential to pre-register with Julian to reserve your place (WOM UK members get priority).

Assessing the ROI that results from customers’ word of mouth is a key challenge many marketers face today, especially given the plethora of word of mouth programs and social media investments by firms. However, most measures used are simplistic and do not necessarily capture the complex way in which social interactions turn into monetary gains. In ‘Assessing the value of customers’ word of mouth’, Prof. Libai will present the basic approaches to value customers’ word of mouth, highlight some major limitations, and discuss new approaches for understanding the “social value” of customers.

Professor Barak Libai , currently on the marketing faculty of  the Recanati Graduate School of Business, Tel Aviv University, was also Visiting Professor at the MIT Sloan School of Management from 2006-2008, and has a Ph.D. in Marketing from The University of North Carolina at Chapel Hill.  Prof. Libai’s research deals with the economic value of customers’ word of mouth, and relevant questions he examines include how different is customer  lifetime value when word of mouth is taken into account; what is the ROI of word of mouth programs; and how advertising effectiveness measurement should take social effects into account.  His research on the economic consequences of customers’ word of mouth has won prizes from The Marketing Science Institute, The American Marketing Association, the International Journal of Research in Marketing, Journal of Service Research, and ESOMAR.

This is bound to be a lively evening of thought leadership and networking, and we look forward to seeing you over a few beers. Big nod to Grey and Royal Mail for generously sponsoring the event.

Has Dr Robert East shown us the future of WOM measurement?

January 28, 2010 at 6:27 pm | Posted in Events, Measurement, Research | 2 Comments
Tags: dr robert east, Measurement, net promoter score, social media, WOM, word of mouth

Wednesday morning’s espresso briefing event certainly drew a big crowd – and a host of questions. It wasn’t surprising, as Dr Robert East’s presentation on the limitations and alternatives to the famous WOM measurement tool Net Promoter Score was provocative and persuasive in equal measure.

As Professor of Consumer Psychology at Kingston University, Dr East has long applied rigorous academic thinking to the contentious world of WOM metrics. He began by looking at the actual impact of positive and negative WOM for brands, something that NPS ignores. His research showed that measuring levels of sentiment is also more complex than it might initially seem, as detractors and promoters may not be as wholeheartedly glowing or derogatory as we assume.

He next moved on to look at the American Customer Satisfaction Index, another popular measure, and questioned the validity of ‘satisfaction’ as determined by the survey – highlighting such important points as the fact that satisfaction is proved to have little correlation with customer retention, and is only one of the causes of WOM.

By proposing a new methodology that takes into account these discrepancies and subtleties, Dr East showed that there could be a way of producing a much more reliable and effective measurement. This was very well received, and prompted a lively debate, with most of the questions circling the perennial problem of measuring essentially emotional and complex data quantitavely, and how to incorporate the differing value of different types of WOM. The issue of offline monitoring was also raised, with Dr East suggesting that examining individual industries and passion groups was the best starting point for gaining deeper insight. Check out the full presentation below.

What is certain is that this is an area that will be central to the growth and strength of the WOM industry in the next few years – and that an injection of funding is badly needed to investigate new systems large-scale. If you have any questions, comments, or suggestions for Dr East in securing further funding, leave a comment below or get in touch.

The latest WOM issues and insights from WOMMA Summit 09

November 23, 2009 at 4:03 pm | Posted in Events, Research | 3 Comments
Tags: Measurement, Research, roi, social media, wom uk, womma summit, word of mouth

WOM UK President Molly Flatt hit Vegas last week for the annual conference of our US sister organisation, WOMMA…

Having arrived back in Heathrow at midnight, I’m still dogged by jetlag and trying to assimilate the great eclectic beast that was WOMMA’s 2009 Summit in Vegas, no less. With three days of keynotes, panels and case studies from some of the biggest US brands active in the WOM space such as Ford, HP and Coca-Cola, as well as research from the likes of Forrester Research, Nielsen and The Keller Fay Group, it was a mindblast of the latest theories and commercial applications of WOM.

Measurement was predictably high on the agenda. Clients are crying out for industry-wide standards, but there was an acknowledgment that meaningful metrics will be be different according to client objectives (visibility, sales, loyalty etc) and therefore project-specific education is still essential. Conversation relies on context, while most ad metrics are stand-alone and focused on scale alone. Consequently, the most successful examples of effective measurement involved a brand combining insights and figures from other departments (sales, eyeballs, customer services calls etc) with a broad range of qual and quant WOM data.

Internal ownership was also a massive issue, with some great sessions from IBM & Newell Rubbermaid and Mars on how they’ve integrated WOM listening and advocacy programmes into their existing structures and processes. This was related to an ongoing conversation about how Customer Services links with WOM. A panel including Pete Blackshaw from Nielsen, Frank Eliason from Comcast, Tom Asher from Levi Strauss, Denise Morrissey from Toyota and John Bernier from Best Buy looked at examples such as @TWELPFORCE and @comcastcares which fully integrate Twitter into CS. The main takeaway was: just try, keep communicating, and help employees learn and progress from their mistakes. Take the risk, and as long as your approach has integrity and strategy behind it, the benefits will be enormous.

Another highlight was Steve Knox from P&G’s Tremor using cognitive psychology to explain why customers talk – apparently if you disrupt their schema (the model in their head of how the world works and their assumptions about a brand) it’s WOM gold. And the panel of WOM academics tackling the toughest questions in the industry had some powerful messages, in particular the importance of overlooked visual, aural and offline WOM triggers; the need for research into geographical and cultural differences in behaviour; and the use of future visioning to sell in the value of WOM to brands: if we do or don’t engage this talkative customer, what will the impact be?

Steve Knox from Tremor on cognitive psychology. Spot me earnestly taking notes on my Mac…

On the flipside, some of the examples I saw were still too based around an old-school marketing approach. Isn’t a moderated, branded page or forum in an independent community (such as Tropicana for BlogHer) really just a microsite dressed up in social clothing? From a WOM UK perspective, it was interesting to observe the differences in approach between the US and UK. I’m not sure that some of the more gung-ho, blatantly branded adovacy groups such as the Feld Family Activators at Mom Central would gain much traction in a nation that tends to be highly sceptical of associating itself so strongly with commerce. And some agencies were even stipulating time limits whereby participants were ‘expected’ to talk in return for goods or experiences – where’s the spontaneous, independent and heartfelt advocacy in that?

Overall it was a rich and stimulating event and I’m sure more thoughts and observations will trickle through across the next few weeks. For more, check out my live tweets from the Summit @WOMUK, as well as video highlights here and photos here. And if you want a more detailed lowdown on insights and issues raised, just drop me a line and I’d be happy to take you through it over a coffee… or indeed a Vegas-themed cocktail.

Introducing The Brand Race Quadrant

April 14, 2009 at 9:54 am | Posted in Events | Leave a Comment
Tags: freedata labs, Measurement, social media monitoring, the brand race quadrant

For our next morning Espresso Breifing event at 8.30am, Tuesday 21st April, Alex Giorgi and Valeria Severini from Freedata Labs will be presenting Gauging your popularity against the competition: The Brand Race Quadrant®

quadrant

A European member of WOM UK, Freedata Labs specialise in the measurement of social media marketing. The Brand Race Quadrant® is their latest development, a web monitoring tool for analysing and extracting information from Web 2.0 data flows – essential in making sense of word of mouth online.

Join us at at One Alfred Place, London WC1E 7EB, until 10am. Members £20, Non-members & invited guests £25, and to register contact Julian Ferguson at [email protected], 0203 286 4145 or 07921051282.

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