Bill Nichols

24 February 2014

013 – 24 February 2014

Back to Basics: 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.

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Bill Nichols

4 January 2014

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.

 

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Bill Nichols

6 September 2013

Telling Tales:  The Narrative Revenue Opportunity   

009 – September 2013

‘Narrative, 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?’

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).

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Bill Nichols

31 July 2013

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). .

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Bill Nichols

1 June 2013

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 clients’ recommendations and referrals.  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).

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Bill Nichols

6 May 2013

Managing Velocity: When You Can’t Do Right for Wrong in Client Relationships

006 (May 2013)

Know the feeling?  Everything is going swimmingly with your ‘significant other’.  Then something flips.  At first you’re barely aware.   Your ‘five minutes late’ meets a surprising chill.  Next come monosyllabic replies to calls and texts.   Then a task not done properly prompts a rant.  Finally jokey remarks kindle major conflagration.

Baffled?  You’re watching relationship dynamics and the power of relationship velocity (‘RV’, direction and speed) as it accelerates.   It’s well founded in psychology and personal relationship studies. And it offers retention-focused agency managers a critical missing link.

Key new research (*) adds the RV measure to established understanding about the value of tracking client relationship levels (the ‘goodwill’ bank account).  In brief it means that inter-firm client-agency actions have no absolute value.  Speed and direction affect their impact.  Payback when clients have positive RV will far exceed the agency’s return when it is already sliding down the slippery slope.

This makes intuitive sense.  Personally flowers may be a happy bonus in good times but rarely a ‘get out of jail’ card.  In business, a sales tip off may score well in positive mode but an expensive client lunch is an unlikely salvation when the brown stuff is flying.

Where We Were

First what we already know.  As I’ve written extensively elsewhere e.g. (http://astrophel.co.uk/wp-content/uploads/2013/01/Making_Most_Loyalty_PSMG_January_2010.pdf), each client relationship is best understood in terms of it its own ‘goodwill’ bank account.  Keep that account positively in the black and you can foster many desirable outcomes. These range from exclusive preference/retention to public word-of-mouth promotion.   It will also allow you to survive a major failure without suffering account loss.

But once let it slip into the red? Then even the simplest error or issue can cause major problems.  Ultimately a parting of the ways.

This ‘bank’ model integrates two major streams of research.  The first confirms the critical role of commitment and trust in securing long-term business outcomes (account renewals, profitability, additional projects).   The second demonstrates that just like personal relationships, our inter-firm liaisons have a developmental cycle over time (honeymoon, growth, conflict etc.).

All fine and helpful.  But, for all that, the ‘goodwill’ bank account is a static concept.  The absolute level or stage of a relationship only helps so far.  We can check when we wish but we won’t necessarily see movement.

Tellingly firms that have worked with the goodwill bank-account tend to find most useful the early-warning indicators that I call ‘empowerment’.  These track, for example, a tendency to growing client micro-management vs. increasing freedom to get the job done.  They may catch the ‘turn of the tide’.

What’s To Do?  

So what’s going on?   According to the research, the power of trust weakens over time.  It may continue to increase but like an over-used drug without the same positive effects. It’s necessary but not sufficient to deliver continued relationship growth.

In personal terms, this is the ‘comfort zone’:  we take the ‘significant other’ for granted.  In account terms likewise. We tick the boxes, do the job (yes probably a good job) and issue the invoices!   In both cases we cease to work at and learn about the relationship.

So what to do?  Every top client-handler I know rightly highlights the importance of frequent client dialogue.  But it is depth and progress – as much as frequency – that really count.  They offset the weakening impact of trust.  To use the techno-speak, we need to recognise that our ‘bilateral communications capability’ actually creates a form of individual account IP.   Accumulated knowledge and established ways of exchanging information serve to create flexibility and adaptability.  They allow us to refresh.  To see growth and new opportunities on both sides. In short to sustain positive relationship velocity.

Sound frustrating? Too much like hard work?  The challenge for agency ceos is to make hard-worked retention just as sexy as winning the next new business pitch. Otherwise ‘sudden chills’ will continue to translate into ‘major conflagrations’.   When you can’t seem to do right for wrong!

-ends-

(*) Palmatier, R., et al (2013), Journal of Marketing 77 (1) 13:30.

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Bill Nichols

4 February 2013

The Likes:  What IS the Brand Value of All Those Faces in Facebook?

003 - January 2013

So do the social media ‘likes’ – all those faces in Facebook – have any real brand or campaign value?  True, with SM in the mainstream, plentiful ‘likes’ are simply-reported.  They’re also superficially reassuring for page-owners.

But, troublingly according to many, actual impact on consumer preference is often negligible. And their monetary value minimal or non-existent.

Is this some limitation in the platform?  Perhaps a subset of the ‘monetisation’ debate?  Or is it a lack of practitioner expertise in manipulating a frontier medium?  Major new research (*) fingers expertise as the problem. Professional management of ‘similarity’ and ‘ambiguity’, it suggests, may transform outcomes for both brand and PR campaign management alike.

How might that work?

Well, traditional social influence theory (SIT) suggests that physical exposure is required to exert, or interpret, a meaningful social impact.  This is a well-trodden, well-researched path.  It aligns multi-sense neuroscience findings with social psychology.  The emphasis on physicality underpins contemporary retail and service experience design. We all apply it intuitively.  For example, when we pop our head cautiously around an unknown pub’s door to check out the clientele.  Or when we retreat from a retail space where the average age or appearance of the ‘actors’ (staff and customers) creates immediate discomfort for us.

But what about all those Facebook or web page images?  Can the physical rendered as ‘mere virtual presence’ (MVP) – the correct academic handle – help or hinder the process?

Yes MVP helps, say the findings.  If we have a clear target segment in mind, showing brand supporter similarity will signal affinity to visitors, facilitate liking and heightens visitor purchase intentions.  (Akin to the nice warm feeling from the friendly pub!).  Intriguingly a mixed (or heterogeneous) page can also function acceptably as the visitor typically anchors on some relevant images.   Even studied ambiguity (via e.g. silhouettes) may help although it is weaker where the visitor is exploring competitive brands.

But dissimilarity repels.  Just as we retreat from the perceived to be unwelcoming pub!

So, to summarise, owners may bask in all those ‘likes’.  But it’s not just insufficient.  The wrong ‘likes’ – casually presented – may sometimes explain the absence of positive outcomes.

To illustrate active planning, a brand entering a new segment will only release target images.  A second, uncertain of available opportunities, may choose studied ambiguity in the early phases.   A third running a major issues campaign will consciously display as heterogeneous a mix as possible to optimise potential support.

Of course this poses hard ethical questions.  Brands must notify selection via e.g. ‘fans of the day’ type features.  Otherwise they may fatally undermine the medium’s presumed transparency.

But, in short, the ‘face’ in Facebook may really count.  And that innocent charm of social media interactivity and inclusiveness – e.g. allowing any non-offensive user-posted image to stay up – may rapidly pall.

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