Bill Nichols

26 February 2015

Bill Nichols

If You Can’t Get No Satisfaction (Ad Astra 022 – 26 February 2015)

For many firms, Satisfaction is an obsession.  They follow Mick Jagger’s  mantra:  “I try and I try and…”  They make it the judge-and-jury.  They blazon it on the corporate balanced scorecard.

But, guess what, customers still defect.  Including 65-85% of the satisfied ones, as marketing guru Fred Reichheld demonstrated nearly 20 years ago.

Many grumbling CEOs probably agree with Mick’s later sentiment in ‘I Can’t Get No..’.  It’s all “some useless information/Supposed to fire my imagination”.

But before you ‘fire’ satisfaction – and try some new fad – here’s a cunning thought (and some new research)…

The Wrong Sort of Satisfaction

….You’re probably measuring the wrong sort of Satisfaction.   (Like the old British railway joke about the ‘wrong sort of snow’).

Last Train to Satisfaction Junction

Last Train to Satisfaction Junction

Your sort, you see, is probably the rational one.  Most Satisfaction measures presume rational, reflective assessments of utility and value.  They apply the ‘disconfirmation paradigm’.   This model subtracts your pre-purchase expectations from your post-purchase perceptions.

The Rational Way

Imagine.  Your new partner invites you out to dinner.  You expect, say, a perfectly acceptable, average French restaurant.  You get:

  • The Ritz.   You are blown away.  On every aspect. This is positive disconfirmation;
  • Greasy ‘Fish-and-Chips’ at the local down-market pub.   Serious problem: negative disconfirmation.
Mine's A Pint of Satisfaction

Mine’s A Pint of  Disconfirmation!

All fine so far as it goes.  Scorecard happy!  Unfortunately, this sort of Satisfaction is only a short-term (weeks) predictor of retention and repurchase.  Like a blip on the chart.  And highly susceptible to competitive advertising (*1).

The Emotional Way

Marketers, of course, focus long-term.  Established research on the emotional side of Satisfaction demonstrates that we connect, enjoy richer experiences and are far more likely to remain loyal if

…If we feel fair treatment, pleasure, ‘belongingness’.

Such feelings take longer to nurture. No scorecard surge.  But they are far more robust.

Imagine:

  • Your partner is really rather fond of that pub. A ‘regular’ for years and usually meets most of his/her friends there.  The conversation is good and the food generally ok.

So the morning after your disaster?  OK your partner is temporarily dissatisfied.   But a few weeks later? They’re just as regular (and happy) as before.  You’re even getting used to it yourself!

What To Do?

The recent research summary (*1) highlights four beneficial emotional engagements.  To:

  1. Adopt and promote customer values e.g. social responsibility (pub charity event?)
  2. Invest in image campaigns which increase prestige and reflect well on customers (pub chains are usually poor here)
  3. Embed customers in networks which consult on products and in special events (darts, music, quiz nights)
  4. Encourage front-line employees to communicate positives and foster company-customer identification. (After all a good barman is worth 1000 pints!).

Caveat:  you may find some texts call this second sort of emotional satisfaction something different.  Don’t worry:  it’s the right sort!

-ends-

Bill Nichols

10 December 2014

Bill Nichols

019 All Headlines and No Narrative: The Obesity ‘Epidemic’ (December 2014)

Obesity headlines? You may have seen the recent attention-grabbing – if depressing – fusillade.

Here’s a quick rehearsal.  Nearly 30% of the global population, or 2.1 billion individuals, is overweight or obese.  (UK = 37%).  Collectively they cost the world economy ~$2 trillion, or 2.8% lost output, annually.  That’s less only than smoking and armed conflict (McKinsey, November 14).

One third of Year 6 UK primary schoolchildren is already overweight or obese (Health and Social Care Information Centre). More than 70% will become obese adults (Association for the Study of Obesity).   And 70% of obese youth also have at least one risk factor for cardiovascular disease (CDC, US).

Enough, you cry!  Your point?

Answer: it’s partly a communications’ challenge.  (And one we’re exploring at the Bucks Centre for Health Communications and Research (CHCR)).  Specifically this week’s visit to govtoday’s excellent London conference, Obesity: A National Epidemic, convinced me.

Under a heavy collateral data bombardment, I learned quite simply: there is no single narrative.  And without one, this epidemic (or pandemic) will always slip quickly off the news-agenda.  Why?

Villains and Heroes

For speedy analysis, I like the ‘villain-hero-conflict-solution-outcome’ tool. Try it on Ebola and you’ll quickly see why it stays so successfully on the agenda.  Its narrative is clear and effective.  But obesity?

First up, find a villain or ‘dark lord’?  Mmm: spoilt for choice.   You could fairly audition food processors, fast-food outlets, regulators, lobbyists, poverty/deprivation, the tax-man and (in the UK) the NHS.  Or try money out of your pocket. Some suggest that obesity and its consequences cost the NHS £10 billion annually.  If so, then this villain ‘robs’ everyone of over £160 per year. As Public Health England points out, revert obesity to 1993 levels and it will save at least £1.2 billion per year. (George Osborne, please note).

Lost already?  What about a hero?   OK there’s ‘Sir Health Of Well-Being’.  He’s a lovely chap. Very well-intentioned.  But lacks charisma.  Too ‘nicey, nicey’.   And be honest, humankind tolerates only so much good behaviour.  An individual, or single front or campaigning body, is required to lead the charge.

Next it gets byzantine: the conflict. This battleground is more complex than the Syrian Civil War or 3D chess!  Obesity, say the experts, is a consequence of: a) genetics, b) environment (we live now in an ‘obesegenic’ world), c) psychology, d) behavioural factors and/or e) some combination of the above.   Try pitching all that in the ‘elevator’!  In the current state-of-knowledge, it’s not even clear which dimension has the strongest weighting!

Solution?   Seriously, who knows?  There are far too many variables in play and issues outstanding.

So outcome?  A super-healthy society would be nice.  And pigs are flying in massed formation over my office.

Sadly, depressingly, we all ‘get’ the question.  But without a narrative, this looks set to drift – and escalate.

So, all joking apart, before you settle down to that Christmas turkey, obesity narrative anyone?

And do please leave a reply below!

-ends-

Bill Nichols

2 May 2014

Bill Nichols

016 – May 2014

Social Influence – Three Key Touch-Points

You know that social media stuff works.  It’s always worth a punt.  But you’re not quite sure when, how or in what combination with other tactics you get ‘influence’.  Should you ‘pension off’ some old tools – like classic direct marketing – completely.

So what exactly do we know?  So far we have: firm principles; clear integration models for the process of exposure, feedback and engagement and exchange; and, from telecoms to pharma and online retailing, mounting evidence.  Research confirms the positive effects of social influence (or, unattractively, ‘social contagion’) on adoption.

As a result, social network marketing is part of the marketer’s canon.

Now new tech-product based research (*) offers more.  More than a direction of travel.  More than a punt. It’s founded on analysis of interactions and influence among relevant consumers.  It suggests three key touch-points to begin to manipulate social influence with some precision.

First Up, Catching Earliest Adopters

In the product cycle, the research finds, it is the earliest customer adopters – properly the pioneers – who exert the greatest social influence.  Further, if stimulated by traditional direct marketing, their incidence and power is augmented.

Tactically, this combination offers maximum early market impact.

It’s like the match to a newly-laid fire.  Early investment in classic MGC (marketer-generated content) kindles UGC’s (user-generated content) influence.   But, it seems, traditional potency flickers and quickly dies.  After launch, marketers should cut spend rapidly.

Second, Extending Online Sharing

But there is no time ‘bar’ on social influence.  Intriguingly, irrespective of time of purchase, each new adopter contributes independent effects.  The quantum of individual power depends not on timing but on:

  • ·         ‘Strength of tie’ – where the unique aspect of virtual communities relates to help asked                        and provided and the desire to meet in person –
  • ·         And homophily (degree of similarity, the ‘birds of a feather’ principle). 

Solely for his or her own close personal connections, each new adopter is like a pioneer.  A new burning ember.  So, long after launch, to continue to stimulate online sharing behaviour with appropriate content and incentives is a viable mid-term strategy.

But important distinction:  simply to rely on cumulative positive adoption effects across a customer’s wider network is unlikely to succeed.  In line with the fading (even negative) effects of simply repeated messages reported in my recent blog, The Power of Three, traction is lost.   Sparks may fly but will not kindle.

Third, Referral Anytime

Finally, by extension, the constant potential of new adoptions indicates that referral campaigns may be effective at any point – even very late in the product cycle.  Rather than general social pressure, it is the one-to-one power of those with strong ties or homophilous contacts which generates results.  And the fire sustained.

It suggests that careful mapping of prospective customers is a great investment.

Contagious even!

-ends-

(*) Risselada, H., et al (2014), Dynamic Effects of Social Influence and Direct Marketing on the Adoption of High-Technology Products.   Journal of Marketing 78 (2).                                                

 

Bill Nichols

18 April 2014

Bill Nichols

015 – 22 April 2014

Hard-wired consumer responses:  Magic of Three Trumps Four Or More

We are hard-wired: especially our consumer responses.  Often more or less automated.  Up to 80% of the time, according to a top psychologist buddy.  So, in most situations, for communicators, it should be a case of press the button, trigger the receiver’s mental ‘software’ and await the outcome.

Should.  If only we know which buttons. And, not least, how intensively to make claims and to persuade.

On intensity, insightful new research (*), based on a sequence of carefully-controlled experiments, confirms what many might guess.   The answer: it’s three, stupid.

For most message-receivers most of the time, three data-points are sufficient to triangulate and infer meaning.  Whether positive or negative.  So only three assertions per press release or three claims per ad.    Stir gently… It’s enough.  Really.

This is crucial evidence for hard-pressed PR execs, advertising copywriters and online scribes wishing to push back on the client’s demands for ever more positive claims.  And sobering for politicians parroting the exact same answer again (and again!).

The Power of Three

Three of course resonates in our culture. It is, for example, the deep structure of rhetoric.  In medieval numerology and theology, three is God and the Trinity.  And nine (3×3) is the number of miracles.

St. Augustine, that great marketer of the early church, offers perhaps the richest insight.  Three, he suggested, in a passable advance draft of the Theory of Reasoned Action which has dominated consumer behaviour thinking over the past 30 years, speaks to and aligns the three parts of the human being.  That is, mind (attitude), spirit (normative beliefs) and will (motivation).

Selling, Unselling and ‘Persuasion Knowledge’

But if we abuse this magic?  Beyond three positive messages in a marketer-controlled persuasion setting, four or more triggers the receiver’s scepticism.  His defences kick-in.  In the jargon, you run his ‘persuasion knowledge’ software.  Like the anti-virus on your laptop, it functions as a coping strategy.  It mediates, and may negate, initial acceptance.

Make sense?  As every great salesman knows, at a certain point, the more you push, justify and promote, the more you ‘un-sell’.  Or, as every wise consultancy head knows, the more times you re-write that client proposal, the less likely you are to win.

Risks and Rewards of Social Media

Further, in an age in which we increasingly consume news by aggregating narrative across multiple-platforms, simple repetition is high risk. The over-zealous marketer who transmits the same message in the same format across multiple social platforms (say Facebook, LinkedIn and Twitter) triggers defences.  As the research authors note, “small changes in message design can have profound effects on message effectiveness”.

But there is good news too.  Information in a non-persuasion setting (e.g. customer chat, reviews and likes on social media) does not trigger the defence.  It adds authenticity.  That is the reward of social media.

Managing the Message: Beware the Fourth

Over past decades, communicators have learnt much about message management.  They know about the power of source credibility.  The importance of aligning presentation to audience.  The contextual potency of e.g. price signals, message framing and message sequencing.  And the subliminal effects of environment.

Now add, if you like a posh phrase, the ‘theory of inference sufficiency’.  Or if you prefer, the ‘power of three’.

Three only!  Beware the fourth proposition and do not un-sell.  Whether you pitch a story, proposal or new product, close quickly and close early.  Hard wire those consumer responses.

-ends-

(*) Shu, S.B., and Carlson, K.A. (2014), Why Three Charms But Four Alarms: Identifying the Optimal Number of Claims in Persuasion Settings.  Journal of Marketing 78 (1).  

Bill Nichols

18 April 2014

Bill Nichols

014 – 2 April 2014

Practical Social Investment by SMEs – Making CSR Work

My anti-CSR recantation continues.  Here’s a special guest blog on how and why the careful application of the TAAR (trading, adapting, aligning, relating) formula works for SMEs.

A special guest blog on Trading for Good for Tim Grant.

Dr. Bill Nichols

Bill Nichols

24 February 2014

Bill Nichols

013 – 24 February 2014

Back to Basics: PR Product Reviews – Why and How Best

The humble product review is a staple of the PR business.  So ‘humble’, it’s barely mentioned in any standard text -book– even PR for Dummies!

It is – everyone seems to assume – obvious: one of those ‘good things’.

But does it work?  When, why and how?  A research check to fill this ‘black hole’ finds a surprisingly subtle tool – at its best for weaker brands and with four clear tips for best practice.

So what is it?  Properly it refers to a serious robust bench-test.  Not the re-mixed product news releases which, as the excellent Tom Foremski laments, sadly pass for journalism in so many quarters. And not the rather sexier ‘product placements’ whose merits and ethics garner much ink.

It covers anything and everything.  From cars to laptops, DVD players to smart-watches and heart-rate monitors for joggers. The world-over, junior AEs and press officers engage daily in punting out their wares for various outcomes:  traditional media bench-tests (MBs), online blogger reviews (OBRs) and online customer reviews (OCRs).  (My classification incidentally).  Four- and five-stars on Amazon is the new aspirational frontier.

And the value of reviews? 

Thirty years ago, an early agency boss obsessed about them.  They demanded: constant reviewer contact; great clarity and precision; and total care and attention to every aspect. They helped companies, he argued, ‘punch above their weight’.  And they achieved, he believed, greater PR RoI than any other output.   But that was 30 years ago.  Essentially gut-instinct and without evidence.

Wind forward 20 years.  Our Paris office was fast-disappearing under boxes and boxes of Apple kit.  Soon three of our four-strong account team worked full time to manage it all.  I was increasingly sceptical.  We were preaching to the converted.  Squeezing out far more valuable PR opportunities.   And my shins were badly bruised.  But hey, who argues with Apple?  And that was my gut-instinct…

One for the weak

Now today.  Well, smugly, we were both right (my old boss and I)!  New research (*) confirms that properly-conducted product-reviews deliver greatest benefits to weak brands.   They are the fast-track to stronger positioning.  Positive reviews for the weak create a virtuous circle.  More sales, increased brand equity etc.  Conversely negative reports are far less impactive on weaker brands because less visible.

Meantime, product reviews have minimal impact for stronger brands.  They simply reinforce the perceptions of loyalists and refuseniks alike.  While weaker brands make progress by ‘flipping the funnel’, once you are in the top brand tier with established equity, further major market shifts require high-visibility classic advertising and promotional tools.

Four tips to make reviews work

And the best techniques?

  1. Make comprehensive (non-promotional) information available and easily accessible for reviewers.  As separate confidential Henley research I supervised confirmed, social media will set colour, context and muzak but hard data will create the final shape.
  2. Establish brand communities and early adopter clubs.  Perceived customer privilege will provide ‘seed’ positive feedback and enable rapid modification to address the ‘negative’.
  3. Consciously seek out expert review sites.  They often set the review editorial agenda for others.
  4. Incentivise your evangelists to post early reviews.

And, last but far from least, beware subterfuge!  In the social media age, if you’re found out posting negative reviews for competitors, you can create a tsunami for yourself…

Not so humble after all those product reviews…

-ends-

(*) Ho Dac, N.N, Carson, S.J and Moore, W.L.  Journal of Marketing, November 2013.

Bill Nichols

4 January 2014

Bill Nichols

011 – January 2014

Bye Bye Scepticism: How and Why CSR Communications Works

If the PR world has an equivalent of the UK’s PPI mis-selling scandal, it is surely the CSR-based communications campaign.   .

Note, this isn’t scepticism about underlying policy or philosophy.  Heavyweights on either side – e.g. Forbes (for) and WSJ (against) – continue to debate.  Companies may, or may not, have a social responsibility.  But, motivation aside, behaviour indicates value.  90% of Fortune 500 companies have explicit CSR objectives.  Half issue specific CSR reports1.  Even two-thirds of crusty CFOs see return, says McKinsey.

But it is serious scepticism about the current value of CSR presentation investment.   All too often CSR campaigns appear worthy and unfocused.  Just-in-case insurance policies, they ‘tick’ the politically- correct compliance ‘box’.  Yet how they work – or to what intended hard business outcome (if any) -remains unclear.

But the research case for the value of strategic planned CSR communication really is building.  And, as Keynes supposedly said, “when the facts change…”  Here’s how.

Evidence and Engagement

The B2C research ‘jury’ is already long-term supportive.  Active CSR promotion drives positive brand and product evaluations.  It also increases both satisfaction and loyalty2.

Now new US research3 is surprisingly positive about B2B.  For corporate comms professionals, it offers a practical evidenced prescription.

As a necessary preliminary, the new work distinguishes two forms of CSR engagement for B2B:

  • Business practice (BP) CSR focuses on e.g. employees and customers: think brand     sponsorship or cause-related product marketing.
  • Philanthropic (PH) CSR addresses e.g. community and third-sector: think community volunteering, social marketing or corporate charitable contributions.

BP CSR and Trust

In the B2B context, BP delivers trust and (ultimately) enhanced loyalty.  The BP toolkit is particularly powerful, the research finds, in three specific scenarios:

  • Compensating high market uncertainty or turbulence
  • Supporting/shifting product perceptions
  • Offsetting infrequent customer engagement and shallow relationships.

How and why does it work?   BP is practical or ‘instrumental.  Grounded in classic social exchange theory, it’s based on competitive ‘survival’ drivers and highlights concrete actions. This is active stakeholder marketing in which something is clearly ‘traded’.  And the acquired strong CSR reputation signals trustworthiness.

PH CSR and Belonging

But now posit situations where trust is necessary but not sufficient.  Where, say:

  • Competitive market intensity is high
  • Or the customer itself reveals a strong CSR orientation.

If your task is to create a strong association – or ‘belongingness’ – then, prompts the research, switch to the PH toolkit.

How and why?  PH activities are soft: expressive, emotional, even ‘warm and fuzzy’.  They  signal the societal or ethical.  Their outcomes are human welfare and goodwill.  They drive measurable customer identification.

So let’s leave philosophy and political correctness to others.  Even this long-term sceptic concurs: as a communications toolkit, it seems to work.  Embrace it!

-ends-

Hope you enjoyed the latest blog.  Thanks for reading and do please comment.  For earlier and regular updates join me on Astrophel for publications and blog or on Linkedin and Twitter.  

(1) Luo and Bhattacharya (2009), Journal of Marketing, 73 (6) 198-213.  (2) Bhattacharya and Sen (2003), Journal of Marketing, 67 (2) 76-88. (3) Homburg, Stierl and Bornemann (2013), Journal of Marketing, 77 (6) 54-72.

 

Bill Nichols

6 September 2013

Bill Nichols

Telling Tales:  The PR Narrative Revenue Opportunity   

009 – September 2013

‘Narrative, narrative, PR narrative’ everywhere.  It’s a staple of consultancy creds.  Every PR campaign and every brand, apparently, should have one.

But how exactly do you sell it?  Make money? And, as a client, what are you buying?

Cynics say 20 years of narrative chat is just consultant re-packaging – backstories and news agendas remixed.  A case of: ‘the sun shone down, having no alternative, on the nothing new’ – to quote a favourite narrative opening!  (‘A’)

Maybe.  But my own research review is surprisingly positive. It comes with two caveats.  That: (1) PR folks really are the great storytellers; and (2) PR consultancy management teams really want to exit their traditional comfort zone and exploit their intellectual assets (e.g. storytelling).

So what are the prospects?  This little narrative is a ‘will-they-do-it?   And like ‘whodunnits’, we need means, motive and first…

Opportunity Knocks

No question, storytelling is fundamental to effective PR.   It’s the ultimate human way to learn and persuade. But, as content consumption fragments across multiple formats and platforms, it’s ever more challenging.  So, agencies that deliver a clearly-defined service offering in this environment should command premium fees.

And those fees are likely dwarfed by the wider marketing opportunity.  Especially the bridge from research.   From NPD and market planning to brand personality, the skilled storyteller is in demand.

Here’s why. Today serious marketers get much input from advanced quant analytics.  It’s marvellous, necessary but insufficient.  By definition, quant analytics structures, reduces and limits – often using predetermined models.  However detailed, for example, a segmentation grid lacks intimacy. To paraphrase: analytics quantifies everything but teaches the human value of very little.   This is – popularly – red-light thinking (‘B’).

So marketers want more.  To capture, and apply, active market learning.  To be inside the room.  Watching, listening and participating.  They want the human stories.  Stories with time-lines which are granular and richly revealing.  Stories, not least, which are suffused with an emotional texture as we hear, see and feel what actually matters (‘C’).

This is the province of  the storyteller (PR as bridge or translator).  As the philosopher-linguist, Roland Barthes wrote:  “narrative does not show, does not imitate…. (It is) a higher order of relation which has its emotions, its hopes, its dangers, its triumphs.” (D).

Why and How – Motive and Means

Sounds like fun?  But there’s far more motive than good fees.   For PR storytellers, this is a way up the food-chain to that mystical top table.  Buyers want new thinking and possibilities for innovation.  Per Coca Cola VP, Stan Sthanunathan, they want: ‘inspiration and provocation’ .  (http://www.slideshare.net/TheARF/research-must-change-11257698).  In short, they want the green-light stuff.  Real value-added.

Now, you’re thinking, the tough part: the means.   Can PR deliver?

Relax.  If you really want to get into narrative, there are endless options for classy models and frameworks.  You’ll be on solid ground, centuries old.  Up there with the old pros like lawyers and doctors.  There’s literary theory, narratology, linguistics and one more…

Ethnography (out of anthropology) is one of the oldest research forms.  It’s about immersion (‘ethno-dunking’ as some practitioners delightfully call it).  It’s become a major tool for blue-chip market research teams from Xerox and Wells Fargo to Procter & Gamble.

And ethnographic storytelling has emerged a major way of transforming viewpoints and disrupting old modes of thinking (C).

And not just for marketers.   It is, researchers suggest, capable of driving a new ‘storytelling organisation’.

What About PR?

So a massive opportunity for in-house and agency teams alike; strong motive; and really powerful means.    But ‘will-they-do-it?’ Will they embrace ‘PR narrative’?

Mmm.  Would love to see it.  But the PR industry seems to hesitate when offered the chance to move off home base.  Fear? Lack of confidence?  Purism?

Watch this space. Another chapter? Maybe…

(A)  Beckett, S, Murphy (1938); (B) Green A, Creativity in PR (2010); (C) Cayla, J and Arnould E, Journal of Marketing (2013, No.4 – July); (D) Barthes, R, Image, Music, Text (1977).

Bill Nichols

31 July 2013

Bill Nichols

After the Crisis: What Price Recovery?

008 – Jul-August 2013

Picture the scene:  negative coverage fading; bloggers sand-blasting someone else; a desultory tweet or two; and the press office phones silent(ish).  The CEO has cut the decibels.  And, yes, stock is trickling back onto the shelves after the recall.

Crisis over? Job done?  You’d forgive exhausted comms and marketing chiefs for thinking so.

But they’re less than halfway there.  After containment, how next to recover on share, volume and margin?  The crisis recovery task is (at least) to restore – and (better) to exceed – the ‘status quo ante’.

Now, at this point, many a company tosses a coin.  Heads,  it’s the expensive advertising accelerator.  Tails, the price-discounting brake.  Or maybe both – and the kitchen sink.  But which choice is preferable? When and why? Surprisingly, and unlike containment, little robust recovery research evidence is on offer.

Until now.  A new study, which reviewed the aftermath of some 60 UK and Dutch product recalls (*), highlights two key influencing factors.  They are (i) the acknowledgement of blame (if/how) and (ii) the extent/volume of negative publicity.

To own up or not?

For many senior managers, ‘owning up’ (admitting blame) generates almost atavistic fear.  But it’s a powerful and cathartic PR move. It draws a line on the crisis and begins to restore trust.  If implemented (the study finds), it tends short-term to halt sales decline and sustain market share. Competitors, too, may quietly applaud since the entire product category may benefit.

But, medium-term?  Typically, advertising effectiveness decreases. So less bangs per buck and harder to grow the brand.  Conversely price sensitivity increases.  So far tougher to recover costs.

Any publicity may be good?

So what about negative coverage?  Not helpful you’d imagine.   True, on the downside, large-scale negativity associates with increased price sensitivity.  And the blight affects both the crisis firm and the whole category.  (No competitor applause on this scenario!).

But there is an upside.  It partly validates the old ‘any publicity is good publicity’ mantra.  Because, typically the raw power of large-scale heightened awareness outweighs its negative direction.  So it actually supports increased advertising efficiency.  On this tack, counter-intuitively, the greater the volume of negativity the faster the recovery!

Now, speculatively, throw in sustained PR (not a study variable) to further minimise the residual negative.  This may explain the rapid ‘bounceback-ability’ witnessed in some product recall scenarios.

Which way?

These, then, are complex effects.   Far from a toss of the coin (hit the advertising, crash the price), the  study pairs the factors to identify and support a much more nuanced four-way response:

  1. Low coverage/blame not accepted: focus on advertising, leave price alone
  2. Low coverage/blame acknowledged:  discount, withdraw from advertising
  3. High coverage/blame not accepted: go heavy on advertising, leave price untouched
  4. High coverage/blame acknowledged: the one case in which increased advertising may go hand-in-hand successfully with price discounting.

Now granted none of this is likely to set the adrenalin pumping.  It’s hard to match the buzz of fire-fighting.  Even prevention strategy development can seem more attractive than picking forensically through the ruins!

But there is a massive challenge here.  For recovery to succeed and deliver business benefits, both forensic style and careful manipulation of the key variables are crucial.

For some, crisis recovery could be just as structured as crisis management – and perhaps just as much fun!

-ends-

(*) Cleeren, van Heerde and Dekimpe (2013). .

Bill Nichols

1 June 2013

Bill Nichols

Beyond Magic: Making Your Client Referrals and Testimonials Work Harder

007 – June 2013

Most agency and B2B-firm bosses appreciate fully the power of their client referrals and recommendations.  Such positive ‘advocacy’ often delivers warmed-up prospects – half-inclined to buy.   In some cases, it contributes up to 50% of converted new business.

And it certainly beats the hard slog.  All those cold-calls.   Expensive pitches.  And, worst of all, those bible-size procurement tenders.

So wise managers work on advocacy.   They apply popular techniques such as the ‘net promoter score’.  They cultivate loyalty and goodwill (http://therightthingtodo.co.uk/index.php/2012/07/hunters-got-us-into-this-mess-will-farmers-get-us-out/).  They cherish their advocates’ willingness to encourage friends and contacts privately over a drink or two.  But, best and most powerful of all, they seek to achieve open public advocacy.  That is published testimonials delivered via print, website, conference or collateral.

Now stir in the ripple effect of social media distribution.  And settle back…

Magic or Model?

But (interesting but) how and why exactly does this testimonial ‘magic’ work?   Which carefully-crafted testimonial has greatest resonance and works hardest?   What, if anything, could deliver more?

Is it just a case of ‘any reference is a good reference’? Or is there a secret ingredient:  personality or brand; client size or value; intrinsic newsworthiness; or the techniques and results reported?

The answers come in a new concept: ‘Business Reference Value’ (BRV).   A new study (*), founded on some serious number-crunching, will help you unpack the magic.  And compute, analyse and apply the hard cash value of your testimonials.

The study tracked the BRV mechanism over a six year cycle.  It explored its impact on conversions and profitability.  And it found four major drivers of BRV.  They are the:

  1. Size of the client firm (generally the larger the stronger the impact)
  2. Length of relationship reported (the longer the stronger)
  3. Media format employed (generally the richer the better e.g. video over audio over written case-study) and
  4. Congruency or relevance to the prospect (generally the closer the better).

Typically size and relationship longevity lead.  But they do not dominate.  They add up to about 31% of the impact while media format delivers a potentially amplifying 14%.   Interaction effects between drivers chip in 9%.  Meanwhile congruency – the largest single effect – contributes 17%.

For many this last finding will be intuitive.  No matter how fabulous the brand, washing machines (say) will simply have less resonance for a fashion prospect than another fashion brand.

True, but the relationship is more subtle.  Within congruence, matching prospects to (1) a similar service or product client certainly has the largest individual impact.  But it is enriched (2) by industry association and, further, (3) by role alignment with the advocate.  As a prospect, as social influence theory predicts, we want to hear from someone like us.  Someone just like us.  So, for example, the mid-ranking marketing manager will – by far – prefer his own industry/own product peer to the glamorous if alien global VP from another sector.

Increasing Power

Perhaps most intriguingly the study indicates that BRV is playing a steadily growing role in a prospect’s decision to adopt and buy.   Speculatively, it’s a case perhaps of an increasingly virtual social community re-imposing itself over complexity and distance.

The lesson?   Construct, maintain and constantly build a comprehensive portfolio of references.  Recognise that – for someone somewhere – even the dullest sounding reference may count.  And count significantly. Deploy and target them carefully in each case.  Seek total congruence on the ‘less is more’ principle.

Next start to build up a tracking mechanism for your referrals.  What works, when and how. What yields most.

So, yes, referral (BRV) is the major asset wise managers always knew it was.  But it doesn’t just happen.  And it’s certainly not magic.  You can deploy it and target it actively and precisely in your business development toolkit.

-ends-

(*) Kumar, Petersen and Leone (2013).