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Jim Calhoun is the CEO/Founder of Popular Media and a Silicon Valley veteran. Before founding PopularMedia, Jim was a co-founder of CustomerClick LLC, a multi-million dollar direct marketing firm whose clients include Yahoo!, UnitedHealthGroup, and ABC Television. Previously, Jim served as Vice President of Products at NetObjects, Inc. He is a graduate of the University of Missouri School of Journalism.

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Word-of-Mouth’s Ethical Effect: How Fair and Decent Marketing Can Increase your Initiative’s ROI

Written on
Jan 25, 2007 
Author
Jim Calhoun  |
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Word-of-Mouth’s Ethical Effect: How Fair and Decent Marketing Can Increase your Initiative’s ROI


The importance of influencers

The success of a word-of-mouth initiative depends on this small number of well-connected consumers. No matter how many people are buzzing about an offer or message, it doesn’t become truly viral until one of these people receives it, judges it worth sharing, and passes it along, triggering action and pass-along among their friends and acquaintances.

Often referred to as “influencers,” these people are critical nodes in social networks. They’re leaders, early adopters, and opinion shapers. They may not consider themselves trendsetters, but their message-sharing choices determine which messages get propagated, and which messages fail to take flight.

Just because you can pay someone to promote your product doesn’t mean you’ve got your message in the hand of a true influencers. Self-defined “influencers” usually aren’t. You can’t identify an influencer by counting the number of people in his address book. Metrics like these measure potential reach, but don’t really indicate the power of one person to motivate others to share your message.

The best way to identify the influencers in your market is by building viral word-of-mouth programs, testing your messages, then monitoring and analyzing the viral performance indicators for every person who shares your message.

Don’t burn your nodes

The final key point I’d like to emphasize is that in word-of-mouth, unethical marketing can do long-term damage to your brand. This is because the core connections in social networks represent stable relationships. According to research by the Keller Fay Group, more than 80 percent of conversations about brands are with spouses, family members, personal friends, and co-workers** . These aren’t shifting, amorphous networks that grow around your brand message, but solid, established channels that happen to be carrying your message. Behave badly your first time through, and you may find the channel closed to you for a long time.

The qualities that enable influencers to successfully transmit your message to others also empower them to destroy your chances of converting dozens or hundreds of other consumers. In fact, 74% of consumers who received negative recommendations from personal contacts were influenced to purchase another brand — making negative WOM a more powerful force than company-led efforts, independent reviews and press, or the blogosphere*** .

Bear in mind, too, that it’s not just the influencers you have to treat well — their very nature as connectors means they receive and pass along both positive and negative feedback from their extended social networks. Take advantage of their friends down the line, and they lose credibility — something they’ll take every action to avoid repeating.

Appreciate the fact that by sharing your message, people are putting themselves at stake. In many ways, they risk more than you do: Dr. Carl’s disclosure study also found that when consumers discovered that friends who made recommendations had failed to disclose marketer affiliation, negative backlash towards the recommenders was 70% greater than backlash towards marketers. Individuals who were honest about their affiliation suffered no such backlash.

If an influencer doesn’t trust you, your message stops when it reaches them. If they share your message at first, then realize you’ve taken advantage of them or their friends, they can spread negative word-of-mouth faster and further than positive WOM can travel, stopping its progress as far as several generations of consumers down the line. And once you’ve lost an influencer’s trust, you don’t just lose his business: you lose everyone he or she could have connected you to.

Learn more

Ethical marketing isn’t just a feel-good movement or a trend to be embraced for the sake of publicity — it’s a set of demonstrated best practices that can improve your credibility, message pass-along, and conversion rates, driving higher marketing ROI now and in the long term.

I highly recommend anyone interested in pursuing a viral initiative review the Word of Mouth Marketing Association’s Ethics Code and ethics assessment tools, available at http://www.womma.org/ethics/ — and yes, I’m a dues-paying member of WOMMA.

_______________________________________

* To Tell or Not to Tell? Walter J. Carl, Ph.D. 2006
** TalkTrackâ„¢, Keller Fay Group, 2006
*** WOM Influence Study, Millward Brown, 2005





Reader Comments.

Hello Jim,

I found your article to be well thought, persuasive and informative. Thank you. I have one question: You write that your company’s data supports Dr. Carl’s assertion that disclosure extends pass-along rates by up to 70 percent. Could you share information about how you, too, have arrived independently at similar conclusions?

Kindly,
Joe Chernov
Director of Communications
BzzAgent

Posted by JoeC | 11:12 am on January 26, 2007.

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