FreshNetworks Blog

I attended a briefing this week by Weber Shandwick on their very interesting European Advocacy Study, hosted by the Word of Mouth Association UK.  Let’s start with a few definitions. Word of mouth (WOM) is simply a form of communication between two people (about brands, products etc.). Whilst this isn’t new, the speed at which information can now spread is what is creating all the excitement. Brand advocacy is described as “the personal recommendation of a brand or idea by an independent third party”.

So why is there so much focus on this at the moment?

There are two reasons. The first is because of the rise of the ‘amateur culture’ – fuelled by the uptake of broadband, the democratization of technology with the arrival of social media and subsequently marketing power. Anyone can contribute and publish their content or opinions online with few barriers. The second reason is because research has found that over 80% of consumers believe that the best source of ideas about information or products or services comes from personal recommendation.

The Holy Grail for business is to harness their brand advocates and to support them to spread the word about their brand. According to Weber Shandwick, “advocates are more than just passionate customers – they are believers, they speak out and they pull others along. They don’t love a brand they live it”.

Research in 2005 by Dr Paul Marsden at LSE into word of mouth advocacy (as measured by net promoter score) and negative word of mouth were significant predictors of sales growth. The new Weber Shandwick research, in conjunction with Paul Marsden, builds on this original work. It found that brand advocacy prompts product purchase in a third of all cases (which is on average five times greater than from advertising) and that of a total customer base, 30% classed themselves as advocates and 30% as detractors. How do advocates tend to spread the word? No surprise to learn that they tell stories, describe their experiences and help people find answers to real needs. They do not talk about advertising.

There is no doubt that there is incredible potential to converse directly with customers online to support advocacy (which should in turn increase sales; lower advertising costs and help protect brand reputation). There are other benefits too – such as turning to customers to gain insight and involving them in product and service innovation. There are countless examples of success in this area including Dell Ideastorm and Threadless.

Brands are experimenting with WOM marketing using a range of different techniques including viral marketing, buzz marketing and building customer communities to support opinion leaders and influential customers. There is a good explanation of the differences on Emmanuel Vivier’s blog here.

But there is a potential conflict with some WOM techniques. I still feel that there are some marketers that see WOM as another ‘push’ model or just another marketing channel to control and measure. This may create some short term benefits but consumers will see through much of this as yet another form of advertising that lacks authenticity. And if your house is not in order, negative WOM can amplify the message to an even greater extent and your customers will have no problem in talking loudly about your shortcomings online.

Creating open, transparent and sustainable conversations with customers is the secret to long term success. Conversations need to be held in straightforward language, not corporate speak for ordinary folk to understand. Accepting that this is a two way process and that people will want to talk about the positive and negative aspects of your business will build trust and long term engagement. One of the key drivers of brand advocacy is ‘surprise’ when a brand exceeds customer expectation. An online customer community is an excellent way to extend this principle as you will be more responsive and more relevant because you’ll be listening.=

A lot of money will be wasted as businesses attempt to trigger WOM advocacy without a community blueprint. A good blueprint will cover mapping your communities across your business, developing a proposition that relates to customer activity and pain points, figuring out how to manage and resource the community, leveraging related social networks in your space and importantly aligning the purpose of the community with your strategic objectives.

Address these and you will be the one of the winners in any economic downturn because you will have invested in building genuine engagement, trust and loyalty with your customer base.

The most exciting thing I heard about at yesterday’s eParticipation and Democracy Symposium was UKVillages. They provide communities and villages with their own website and portal that become online communities. The service is free for every village or community in the country bringing together notice boards, local information, maps, events and people to connect with.

It’s powerful stuff - a huge resource bank for communities, a great store of information (people sharing photos of their village and stories from the past), a useful tool for community empowerment (campaiging about rural post offices) and a potentially powerful market for advertising (although this has to fit in with the ethos of what’s best for the communities).

But, above all, what I like about UKVillages is how they get people to contribute and form communities online. According to Ellie, who spoke at the event, their typical user is a 52 year old woman who is involved in their community. They target people that we found in our own research last year for the Government’s Digital Strategy Review to form half of the digitally excluded in the whole country. People worry about how to engage people online and how to make them take part in a commmunity and UKVilllages are doing it with the some of the most difficult target users. So what’s there secret? I’m sure it’s more complicated and involved but the two great ideas seem to be:

1. Engage people on something they care about and then put it online - get people to talk about their stories from the war or their photos of their village and then show them how they can benefit from sharing this online.

2. Focus on the community not the medium. People want to meet others, share ideas, find information and form bonds. If you make it as easy as possible to do this then they’ll take part.

Sounds simple and I’m sure it isn’t. But it’s a great example of building vibrant communities online. Now my next step is to get my mum to use it for her village walking group…

I’m speaking tomorrow at the International eParticipation Symposium in London about citizen empowerment. Joining Diane Downey from Sunderland City Council, Richard Wilson from Involve and Steve Dale of Semantix in a session entitled: Citizen Empowerment: Where do we begin?

Our take on this at FreshNetworks is that you can rush too often to ‘empower’ citizens in a way that neither helps them nor makes the most of the contributions they can make. One learning from the private sector is that you can focus customer interests and efforts to help solve either specific problems (such as is the case with Innocentive) or to help with ongoing insight and innovation into a brand or product. This can be done by market research but is best done through ongoing engagement and conversations with your consumers to build loyalty, gain insight on their terms and allow space and time for innovation. By doing this you can also create real advocacy for your brand.

Tomorrow I’m going to be presenting how some of these learnings and experience have informed our approach to citizen participation: the what, why, where and how of community empowerment. The basic overview of this is below - if you want to chat more about this let me know.

WHAT?
Open up a debate…

WHY?
…on an issue that people care about…

WHERE?
…on a platform that makes it easy for them to contribute when and how they want to…

HOW?
…and let them see the benefits of what they have contributed.

Taking this as a framework you can begin to think about how to empower citizens and how to make sure their contributions are useful to organisations and government. Turning this into a set of activities and processes is a more complex job, but something that can see real benefits. Empowerment lets us get insight into citzens and lets them insight into us. Through effective empowerment we can coproduce or cocreate real innovations in services. And finally empowered citizens become local advocates and can support and further what government is trying to do. Now that’s a situation we’d all like to get to!

I’ll blog more about the event after tomorrow.

It seems that everybody is talking about Facebook today. And not about who they’ve poked or pictures from a party last weekend. They’re talking about Facbook fatigue, a concept first reported in the Times and then picked up across the media and blogs. There is much more about this topic at Social Media Influence, Tamar, WebCommunityForum and others, so I won’t talk about that in much detail here. Rather I think that this reporting is a sign of a bigger trend in the use of online communities, and one that is not completely unexpected - a shift from mass social networks to niche online communities.

Facebook began life as an ultra-niche online community. When I was at university we were each given an A2 poster with a picture of everybody in our year, their name and email, phone extension and course: the Table of Faces as we called it. Facebook was really jsut an online version of this when it was first developped. It then opened up across campuses in the US and slowly across universities in the UK and beyond. The rapid growth reported in 2007 (700% growth in users year-on-year) came when Facebook was opened up for anybody with an email address to join. The nice campus-based online community had grown to become a global social network.

There is a process with any innovation where it becomes adopted first by the people who invent it and then by a small group of people who probably hear about it by word of mouth - these are called ‘early adopters’. Then as the innovation becomes more embedded more people use it, although they still feel part of a niche community - still a relatively small set of people who share a common bond. They are all using a new technology before the majority of people around them. When something reaches a mass market appeal things change. It is no longer a new and exciting product. People who use it are no longer part of a minority - they can no longer define themselves as being part of the product. The community feeling is starting to decline. When this happens it isn’t the end of the innovation - it just means it has reached maturity. Rather what you see in these cases is that the original continues to grow and embed itself in society; but some people leave. The innovators and early adopters look for something new. People who liked the community feel go and look for it elsewhere.

This is exactly what is happening to Facebook. It has matured and become a part of people’s lives - I wouldn’t dream of not posting photos from holidays on facebook, and my friends use it as a collective organiser. It now has mass market appeal and has lost its innovative appeal. Whilst there is no doubt that Facebook will continue to be popular and grow people are looking for the next thing in social media. As NevilleHobson notes, the analyst behind the report that talks about the decline in Facebook usage also predicts what this might be: niche social networks.

Facebook was originally niche - it targetted people based on membership of organisations (universities). The new niche online communities will be more sophisticated, based on interests or lifestyles; solving problems or self help. There is evidence of this already. Innovators and early adopters are now part of online communities especially for expectant mothers (Netmums) and Horsesmouth, a peer support and mentoring online community, launched a couple of weeks ago.

We predict that this year will see the rise of such networks. People want to be part of an online community where they feel they have something to contribute and where they can gain something in return. They want to be in communities where they have something in common with other members. They want to enter into a two-way engagement. If you offer them this opportunity they’ll flock to take part.

This year will see new, niche online communities cropping up at a rate we haven’t seen before in areas and interests we can’t predict.

I’m speaking next week at the International eParticipation Symposium in London on the subject of Citizen Empowerment: Where do we begin?. I shan’t try to crack this here (you can wait for my write-up of the session next week) but the subject of the conference did make provoke some discussion here at FreshNetworks about how communities online differ from a more traditional use of the work ‘community’ to mean a geographically defined set of individuals.

The simplest definition of a community seems to be that it is a set of people with a similar characteristic of some kind (location being one of these, but it could be a sense of identity or some common interest), but this does not seem to go far enough. Indeed we can think of many sets of people who share characteristics but couldn’t be considered a community. Is everybody who files their Income Tax online a coherent community despite having a shared experience? Do I necessarily form part of a meaningful community with everybody who lives in the same area of London as me? The answer to both of these is ‘probably no’. ‘Probably’ because we need to test whether or not other criteria are met.

In total we think there are five broad criteria that need to be understood when thinking about a community:

1. how does the individual form part of a community and how does the community form part of the individual? I need to talk about myself as being a member of the community as much as the community defines itself as having me as a member.

2. what commonality does the community share? Do we share a common purpose or a common interest?

3. to what extent is the community open or closed? Can others join the community or even know that it exists?

4. is the community built around harmony or difference? Do members have similar or opposing opinions about this commonality?

5. is the community artificial or natural? Was it created by others or did it grow organically?

Only if we can discuss these five aspects of a community can we really begin to talk about it in these terms and when we examine these terms a set of types of communities emerge. I’m currently writing a paper on this so more details on this will be posted at a later stage but for now I thought I’d outline how research communities, like those built and managed by FreshNetworks, can be defined.

Of the five characteristics above it is the bottom two that are of pivotal importance in creating effective research communities.

Communities of harmony have only one voice; they are conformist and conservative and whilst they may share a common purpose of intent they also share common opinions about and reactions to this. These communities do not generate new ideas but norm towards a Leibnizian best of all possible worlds. By contrast, a community of difference (as distinct from dissonance) does not represent the status quo or an idealised state. It raises disagreement and differences where traditional market research techniques has tended to harmony not difference.

Research can only uncover the most insightful and actionable findings when participants enter into a debate amongst themselves. When disagreement forces them to defend their opinions and define how their views and responses vary from other community members, you begin to get real insight and innovations. Ideas are generated and community members work together to resolve problems and differences, rather than not raising these in the first place as too often can be the case with market research. A community of difference provides more fruitful ground for innovation and client insights.

Communities of difference only work if they are natural, or if they are artificial communities which have become natural over time. This is the key to an effective research community – it functions as a community of members brought together by shared interests and aims not as collection of individual respondents who may be brought together in a focus group or panel. Or indeed in some, supposed ‘research communities’. Developing a group of individuals into a natural community is difficult and is where a skilled moderator and qualitative researcher is critical. One who understands how communities function, one who appreciates the different community types and one who has experience of what makes a successful and a less successful community.

However, overall the most successful communities, and those that are of most use from a research perspective, are those where both the researcher (and brand) and community members themselves derive a significant benefit from membership. This is what turns a network of respondents into a community; what makes a community of responses into one of ideas and innovation; and what can help to transform qualitative and market research both in terms of how we do it but also what is possible.

An article in this week’s Economist reports on how for the last eight years Reckitt Benckiser, a household products maker, has bucked the trend both in its own industry (with average year-on-year sales growth of 7% when others’ sales are declining or stagnant) and on the stock market (its share price rising by 356% when the FTSE has dipped by 13%). Such performance cannot be put down just to Barry Scott in the Cillit Bang adverts. Rather Reckitt’s success is due to something that sounds easy but is incredibly difficult for larger companies and brands to do effectively: listening to customers.

Reckitt listens to what customers say and understands their habits; this lets them innovate. And innovation is important to companies like Reckitt: over 40% of their sales come from products that are less than three years old. The new is important.

New products at Reckitt are tested with customers; positioning is tested with customers; ideas are tested with customers. In fact, customers are involved at every stage in the innovation funnel something that is not commonly found but has clearly helped Reckitt. Their R&D spend is lower than their competitors and less than 20% of their brand innovations fail - a figure that may sound high, but actually isn’t! Their CEO, Bart Becht, may have said this week in a Guardian interview that they “make some stupid products”, but they’re clearly products that customers want.

So what can we learn from Reckitt.

1) Involving customers at every stage in the innovation funnel can have real benefits. These are the people who use your product in the end and so getting them to help with ideas, development and testing can be really powerful. This is different from just market research and testing as you can get customers to be inventive and creative, coming up with ‘crazy’ ideas of new products. Some of these crazy ideas will turn out to be quite sensible.

2) You can over-develop products. Sometimes it’s best to get a product out to market and see what the reaction is rather than endless testing and development. You will quickly see what happens; whether a product is a success or not.

3) But it’s worth testing sooner rather than later. Even though you can just put products straight to market it is good to test. A way to expedite this is to involve consumer testing at the earliest possible stage. Get them involved at ideation; use them to help eliminate ideas they don’t think would work or to spot problems early on.

4) If you ask them, listen to them. Involving customers so closely in product development means you have to listen to what they say and use their opinions to inform your decisions. This isn’t an add-on or a tick-box exercise; you’re involving them and mean it.

5) If you ask them, tell them what you think too. The best information from customers will come if you are involving them in a two-way conversation. Asking them for feedback and then responding to it - telling them what you think back and letting them know what actions you have taken on their feedback.

Using customers in your innovation isn’t something to get into lightly. It takes commitment across the business and is a longer term engagement. But the outputs of such close insight and research can be incredible!

Some people think that the the internet and qualitative research make unlikely bedfellows. But at FreshNetworks, we think that qualitative methods are set to exploit the way we use the internet, and specifically online communities, to share opinions and information. Though later to the table than their quantitative counterparts, applying qualitative principals online opens up exciting possibilities, with benefits for brands and consumers alike. We’re exploring these issues in a new white paper that is out later this month, Online Customer Communities: a new era in qualitative market research. We’ll be posting the white paper on here in a few weeks, but an taster of our thoughts is below and if you want to read the full thing drop me an email.

The recent explosion in public online communities – MySpace and Facebook being prime examples – has been widely documented with a quarter of all Britons visiting social networking sites. Facebook alone has 25 million users and acquires 100,000 new users per day. Surfing, reading buyer reviews, blogging and so on are no longer just for geeks. Recent research conducted for Google reveals that the average Briton now spends around 164 minutes online every day, compared with 148 minutes watching TV. That is equivalent to 41 days a year surfing the web and more than any other activity after sleeping and walking.

Alongside the mass public communities sit an increasing number of niche networks where members focus on shared opinions or interests: they are communities of like-minded people, rather than people with pre-existing relationships. These people identify themselves primarily by their interests, making online networks a natural step forward in the researcher’s repertoire – and a much-needed one given that many research methodologies we use today date from the 1950s.

Both public and private online communities offer opportunities, but many brands are wary of sharing company information openly. Invitation-only, private online communities centred on a single brand or customer segment may be the solution. These private communities can also engage customer groups or target consumers who might be difficult to reach using traditional off-line methodologies. Consumers enjoy this new, more participative research approach and the interaction with other users re-introduces the social context often missing from other research approaches that conceive of the consumer as an isolated individual.

Brands also benefit from online communities by having them on-hand to answer questions, test hypothoses, and observe. Online technology can adapt to almost any research need, be it showing creative stimulus material, gathering ideas for innovation or simply an instant ‘go/no go’ when you need it. The continuity built through online networks brings new possibilities for supporting ideation processes. With a group of people on board, research can keep pace with internal development processes, providing a consumer feedback loop to check new ideas, such as product development, from inception to launch.

Ultimately, however, it is up to the company on whose behalf the private online research community is set up to reassure consumers that they are genuinely interested in hearing customers’ views and closing the feedback loop. As ever, the first rule of engagement is to do it for the right reason, which means listening to the result. If this principle is embraced, and the qualitative research framework understood, then online customer communities not only deliver different and deeper insights than were previously possible, but actually provide clients with the opportunity to enhance loyalty and promote a positive disposition to their brand.

To some, the US primaries, if not the presidential election itself, look like a done deal. The numbers speak for themselves: Clinton trails Obama 101,758 supporters to 428,899; McCain on the other hand has just 50,480 supporters and Huckabee doesn’t have a single one.

I’m not talking about delegates, votes last Super Tuesday or even predictions for this weekend’s ballots. Instead I’m talking about Facebook - the number of people who have said that they are ’supporters’ of each candidate’s page on the social networking site. It’s not that these are particularly large numbers for Facebook (over 143,000 have joined a group about panic-buying carrots in May for instance) but that these ’supporter pages’ are particularly active with high participation rates, moreover thay are a way to tap into a particulaly important demographic for candidates. A report by the Pew Research Center in January showed that 24% of the US public learns about the presidential campaign from the Internet; for those aged between 18 and 29, this figure rises to 42%. In a campaign where every vote really will count, the Internet is as much a battlground as the townhalls of New Hampshire have been and the cable channels and national TV debates will be.

That the Internet is a campaigning tool and source of information for voters is not new and not particularly surprising. What is interesting is to look at how the candidates are using their presence online and where they are going. Rather than just using their own websites to broadcast information in the hope that people will visit, the campaigns are being taken to places where voters hang out online - most notably Facebook and YouTube. Candidates are identifying supporters or potential supporters in these places and then harnessing them in groups or networks. This is a great example of the oft-cited shift in marketing theory from an age of ‘interruption’ (think traditional TV advertising) to onw of ‘engagement’ (think tailored ads online or word of mouth campaigns). The candidates are proving to be very good at using new tools; better in some cases than large brands are.

So what is the benefit of using Facebook or YouTube in the way that Clinton and Obama, McCain and Huckabee are? Well natural preexisting communities of people are easier to tap into and easier to seed with information and ideas than are communities of people you have to build yourself. You can use these communities as a place to share all your information - no need to have seen a particular campaign ad when it aired as you can watch it in your own time on YouTube. But what is more exciting is the opportunity to use groups such as those on Facebook to test new ideas - get feedback on campaign slogans and positioning with a sample of a few thousand people before you release it on the whole country. This is more people than you could reach with traditional methods such as Focus Groups, and because you are tapping into a community with social bonds and networks you are able to watch how a community (rather than set of individuals) respond. You can see how the influencers in the group react, and how they pass your message onto others. If you use it properly, you have created a microcosm; a test lab for your ideas and messages. And all for relative little outlay.

The candidates in the US primaries appear to be ahead of the game in terms of marketing and using online communities for innovation. They could teach brands a lot, but have a significant advantage in being able to easily identify where their target audience hangs out and are happy to engage them publicly for all to see. Brands often need some help with this.

I’m at the Retail Business Show today, meeting people and attending talks and presentations on social media and online branding. I love events like this - they are great sources of inspiration and new ideas and also help to reinforce things you think yourself. Today has helped with the latter - Matthew Yeomans from Custom Communication said something that we truly believe at FreshNetworks: that customers have really good ideas.

His talk on social media and brand reputation online showed ways that brands can interact online and also some successful (and less successful) uses of social media and other new ways of doing things. Two great examples that show good and bad use of the online space by brands come from different sectors and different countries: Nokia and Sony. Both thought it would be great to increase their presence online and thought that it would be powerful if they could leverage their brand advocates to help with this. In fact they both had a very similar idea - get their brand advocates to use blogs and diaries to show positive interactions with their product. The problem is one did it well and another less so.

Nokia’s idea was to find the most active Nokia bloggers online, give them the newest Nokia phone and send them on a round-the-world trip on condition that they blog daily and send back photos and videos sent with the phone. The site (Urbanista Diaries) has the blogs and photos and is using these in marketing - running ‘where was this photo taken’ competitions as a second wave word of mouth campaign. It works - Nokia is upfront about what they’re doing. They use real customers to blog and produce content and have an engagement strategy that continues the campaign.

Sony was less successful. The launch of the PSP was accompanied by a blog that purported to be from users of the product. It wasn’t; the blog was actually being run by journalists who were blogging as if they were the PSP’s target consumer group. This was discovered and spread rapidly online. To their credit Sony took down the site and after just a day and all they were doing was running what could have been a powerful word of mouth marketing campaign. Perhaps they were nervous of letting their actual customers do the blogging and so they wanted to control what was said, and how their brand was portrayed online.

These examples show both that customers have good ideas but that firms can sometimes be nervous about harnessing customers online. The Nokia blog enabled Nokia and other consumers to see how an expert interacted with their product, the kind of photos and videos they could take and other advantages of the product that may not have been discovered without this. The Sony experience shows that firms can be reluctant to actively harness their own consumers online; perhaps nervous about what they might say (remember: customer opinions can be bad as well as good) and about launching something they had little or no control over.

There is a need to provide a means by which customers can share their ideas but also in a way that’s harnessed by the brand. Some are happy to let their customer ideas feed directly into marketing campaigns and activities online (as in the Nokia example) whereas others might want to keep the ideas private, in a way that the brands can control and harness but without the risk that their image may be tarnished externally. This is where private social networks are powerful - the ability to create an innovations lab that is invitation only and that firms can use to test their ideas, getting and responding to feedback (good or bad!). These can be strong communities - you recruit your most active online commentators from a broad or specific consumer segment and tell them that what they are saying and commenting on is feeding directly into your brand’s innovation process. The results are incredible!

We’re actually talking about private social networks later this afternoon at the Retail Business Show and I’ll be posting the slides here another time.