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Customer WOM Power Influence by Message Senders and Impact on Message Receivers’ Behavior Michael Lowenstein, PhD CMC Senior Vice President & Senior Consultant Harris Interactive Stakeholder Relationship Consulting Follow the discussion on Twitter at  #WOMPower  during today's webinar. 03/29/10 © Harris Interactive
How Product/Service Experiences Impact Customers’ Downstream Communication and Loyalty Behavior and How Online and Offline Sources of Product/Service Information Influence Customer Decision-Making
First, the Basics Strengthening Bonds and Building Relationships: Our Concept and Model of Stakeholder Commitment
Evolution of the Quality / Satisfaction / Loyalty Movement Stage Two (1985-1993) Focus on Satisfaction Stage One (Pre-1985 ) Focus on  Quality Stage Three (1924-2003) Focus on Competitors Stage Four (Today) Focus on Relationships
How Do Customers Demonstrate Loyalty? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Defining Emotional and Rational Bonds ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Conceptual Framework: Emotional and Rational Bonds are the Basis of Customer Relationships ,[object Object],[object Object],[object Object],[object Object],[object Object],Commitment Map Emotional Connection ROMANCE Contractual Commitment Acquaintance Romance
Conceptual Framework: Harris Interactive Customer Loyalty Model Relationship Diagnostics Relationship Conditions Commitment Dimensions Emotional Connection Commitment Rational Connection PURCHASE ENVIRONMENT Trust Satisfaction Product Satisfaction Price Competitiveness Corporate Reputation Policies Service Satisfaction Contractual Commitment Acquaintance Romance
Loyalty Model for   U.K. Grocery Stores Committed 37% 29% 30% 22% 12% 21% Rationally Connected 40% 34% 26% 16% 7% 3% Emotional Connected 5% 6% 12% 30% 47% 53% Disconnected 18% 31% 32% 32% 34% 23%
Relationship Map: U.S. OTC Pain Relievers Disconnected Rationally Connected Committed Emotionally Connected Rational  Emotional
Customer Behaviors: Committed Customers Will Behave More Profitably Will Pay More Often  Recommend Will Go Out  of Way to Use RATIONALLY  CONNECTED COMMITTED RELATIONSHIP DISCONNECTED EMOTIONALLY CONNECTED 11% 52% 7% 27% RATIONALLY  CONNECTED COMMITTED RELATIONSHIP DISCONNECTED EMOTIONALLY CONNECTED 57% 88% 17% 44% RATIONALLY CONNECTED COMMITTED RELATIONSHIP DISCONNECTED EMOTIONALLY CONNECTED 24% 66% 4% 22%
Committed Shoppers Spend More Per Month: Supermarket Tracking Study Results
Conceptual Framework: WOM and The Role of Advocacy ,[object Object],[object Object],[object Object],[object Object],Committed Strong Strong Weak Emotional Connection Rational Connection Advocates Saboteurs Rationally Connected Commitment Disconnected Emotionally Connected
Definitions of Customer Advocacy and Swing Voter Analysis ,[object Object],[object Object],[object Object],[object Object]
Word of Mouth: Positive & Negative Comments ,[object Object],Q2470. Have you frequently done either of the following: Tell others  positive  things about FinSerVCo?; Tell others  negative  things about FinServCo? Core Preferred High Net Worth Primary Non-Primary Total Positive Negative
Customer Advocacy Level Category Descriptions and Definitions DESCRIPTIONS OF ADVOCACY LEVELS Strong personal involvement with brand  are active advocates/communicators  for that brand Positively disposed towards the brand compared to others in repertoire and consideration sets; strong emotional involvement Relatively well disposed towards a  brand will consider next time around but shallow emotional involvement  Indifferent or passive towards a brand; may not consider the brand next time around; shallow to negative/disaffected emotional involvement Unconnected/Detractors Positive True Advocates Engaged
Advocacy Measures Analysis April 27, 2007
Advocacy Measures Analysis April 27, 2007
Advocacy Method and Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Objectives ,[object Object],[object Object]
$1M - $10M
Functional Diagnostics Gaps $1M - $10M Financial Advisor Team % True Advocates - % Unconnected Top Box (Excellent) % Unconnected - % True Advocates Bottom 3 Box Online Services 1-800 Service Center Account Statement Investment Strategy and Research Handles/ Resolves Concerns Performance Relative to Market Performance Relative to Financial Goals UBS Overall Value Received Contribution UBS Makes to Community Q1.  How would you rate UBS on each of the following…? Like other investor levels, these investors associate the financial advisor team more with the advocate profile than the unconnected profile.  The  1-800 service center is  strongly associated with unconnectedness among these investors.
Branch Office Administrative Staff Diagnostics Gaps $1M - $10M Providing Clear and Accurate Answers to Your Questions % True Advocates - % Unconnected Top Box (Excellent) % Unconnected - % True Advocates Bottom 3 Box Completing Requests the First Time Asked Following Up to Resolve Any Issues Being Courteous and Professional Proactive Solutions/Reasons/Alternatives Q4.  How would you rate the branch office administrative staff on the following? For this investment level, performance on all branch office/administrative staff attributes is more associated with advocates than with the Unconnected investors, again showing their close associations with UBS staff.
Local UBS Branch Office Diagnostics Gaps $1M - $10M Physical Appearance of the Office % True Advocates - % Unconnected Top Box (Excellent) % Unconnected - % True Advocates Bottom 3 Box Hours of Operation Answering the Phone Promptly Making You Feel Welcome and Important Q5.  How would you rate your local UBS branch office on the following? This high level investor group shows some indications of dissatisfaction with F eeling important  and  Hours of operation  for UBS.
Service Compared to a Year Ago  $1M - $10M Q11.  Compared to a year ago, has the service you received from UBS and your Financial Advisor improved, stayed the same, or declined? There is little relationship between advocacy segment and perceived UBS improvement among these investors.  The Unconnecteds are the most likely to have felt strong declining performance, however.
Service Compared to a Year Ago  $1M - $10M Q11.  Compared to a year ago, has the service you received from UBS and your Financial Advisor improved, stayed the same, or declined? There is little relationship between advocacy segment and perceived UBS improvement among these investors.  The Unconnecteds are the most likely to have felt strong declining performance, however.
Percentage of Total Savings/Investments With UBS  $1M - $10M Q14.  Approximately what percentage of your total savings and investments (excluding real estate and employer-sponsored savings/retirement plans) are with UBS? Advocates in this segment are most likely to have all their investments with UBS.
Executive Summary and Implications - Overall ,[object Object],[object Object],[object Object],[object Object]
Executive Summary and Implications – Results by Investment Level ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Executive Summary and Implications – Prospective Next Research Steps ,[object Object],[object Object],[object Object],[object Object],[object Object],Not for Public Use
Example Advocacy Metrics Base—All Quarterly Respondents, FY08 Q1 N=355, FY08 Q2 N=390 42% of client customers surveyed are true advocates for the brand. However, 20% of customers surveyed are detractors. True Advocates 42% Positive 25% Engaged  14% Unconnected/Detractors  20% Strong personal involvement with brand , are active advocates/communicators  for that brand Positively disposed towards the brand compared to others in repertoire and consideration sets, strong emotional involvement Relatively well disposed towards a  brand, will consider next time around but shallow emotional involvement  Indifferent or passive towards a brand: may not consider the brand next time  around; shallow to negative/disaffected emotional involvement DESCRIPTIONS OF ADVOCACY LEVELS
Swing Voter Analysis: What Turns  Positive  Customers into  Detractors ? What Turns  Engaged  Customers into  True Advocates ?
Service-Based Customer Advocacy Analysis Phone Support Swing Up (Delighters) Rank order of variables that have the most impact on moving customers from Engaged to True Advocates:  * Dual driver – Variables that are important in “swing up” and “swing down” Advocacy  scores  are based on all contact types  ,[object Object],[object Object],[object Object],[object Object],True Advocates 26% Positive 29% Engaged  32% Unconnected/Detractors 14%
Word-of-Mouth:  A Hot Topic!
One Of This Era’s Key Marketing Trends 2003:   Word-of-mouth valued/trusted far more Word-of-mouth Advertising Editorial 92 50 40 1977:   Word-of-mouth valued/trusted somewhat more Word-of-mouth Advertising Editorial 67 53 47
Why Word of Mouth Matters:  Trust  and  Authenticity   People Don’t Trust Advertising… … People Trust Others 76%  don’t believe that companies tell the truth in advertisements (Yankelovich, 2005) 68%  trust other people “like themselves”. Up from  22%  in 2003 (Edelman Trust Barometer)
Why Word of Mouth Matters Just About Everyone is Talking 76%  of all Americans talk about at least one brand a day (and average 10) (Talk Track™ Keller Fay Group 2006) 15%  of every conversation in America includes something about a  product or service (Northeastern University)
Harris Interactive WOM Research: A Decision-Making Impact Tracking Mechanism for Product/Service Categories and Individual Companies/Consideration Sets
Conventional WOM/Communication Impact Grid: It's Time for Reconsideration [ Occasion ] [ Setting ] [ Medium/Mode ] [ Social Definition/Client Mkt Segment ] [ Motivation ] [ Positive/Negative Message ] ~ ~ ~ ~ ~ Perception/Behavior  Effect* Inside Out : Companies endeavor to influence attitudes and perceptions of customers/consumers, as well as where, how, and when communication occurs Outside In : Customers/consumers informally influence behavior of others on behalf of selected (preferred) companies When does communication take place? How does communication take place? Where does communication take place? Who communicates? What is communicated ? Why does communication take place?
Because These Issues are Important to Our Clients, We Want to Evaluate and Understand… ,[object Object],[object Object],[object Object]
Overall Objectives ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Contrary to prevailing belief that the overwhelming majority, and behavioral influence, of WOM takes place online, Andy Sernovitz, founder of Word of Mouth Marketing Association and author of  Word of Mouth Marketing ,   has observed: “Only about 20 % of word of mouth happens online.  When it does play a role, it usually sparks the 80% of word of mouth conversations that actually happen face-to-face. Real word of mouth dips in and out of different spaces.”
Study Design and Field Specifics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Communication Recipient Results
Methods of Gathering Information for Choices/Selection of Product or Service for Purchase ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Harris Interactive Customer Wom Power Final
Harris Interactive Customer Wom Power Final
Harris Interactive Customer Wom Power Final
Harris Interactive Customer Wom Power Final
Harris Interactive Customer Wom Power Final
Harris Interactive Customer Wom Power Final
Where and How Do Consumers Get Product/Service Decision-Making Information? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Information Sources for 18-24 Year Olds ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Active and Passive Product/Service Information Received ,[object Object],[object Object],[object Object],[object Object]
Information Sources by Product/Service Category ,[object Object],[object Object],[object Object],[object Object]
Downstream Action by Customers Resulting from Product/Service Experience ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Communication Initiator Results
Harris Interactive Customer Wom Power Final
Harris Interactive Customer Wom Power Final
Harris Interactive Customer Wom Power Final
Harris Interactive Customer Wom Power Final
Methods of Communication to Others ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Correlation Between Method of Communication and Personal Downstream Behavior ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Correlation Between What Was Communicated and Personal Downstream Purchase Behavior ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Inside-Out and Outside-In Customer Advocacy ,[object Object],[object Object]
Inside-Out Customer Advocacy
                                                                                                                           
[object Object],[object Object],[object Object],[object Object],Inside-Out Customer Advocacy
[object Object],[object Object],[object Object],Inside-Out Customer Advocacy
[object Object],[object Object],[object Object],Inside-Out Customer Advocacy
Outside-In Customer Advocacy
Advocacy Extends Understanding of Customer Commitment ,[object Object],[object Object],[object Object]
Staff-Related Diagnostics ,[object Object],[object Object],[object Object],[object Object],[object Object],% True Advocacy Interacting With Getting to Know (14%) Giving Guidance in Reaching Fitness Goals (18%) Showing You How to Use New Equipment (25%) Making You Feel Welcome  (35%) Checking You in Quickly (66%) Being Available to Answer Questions  (37%) Base = 457
Perceptual Levels and Advocacy: Usage Variety and Expectations ,[object Object],[object Object],Fewer  Ways More  Ways Same  Ways A. Usage Variety Fallen Below Exceeded Met B. Expectations Base = 457 % True Advocacy/Unconnected More Ways True Advocacy Detractor/Unconnected Same Ways Fewer Ways % True Advocacy/Unconnected Exceeded Met Fallen Below
Impact of Negatives and Consideration Set on Advocacy:  Problems/Joining Other Health Club Facilities ,[object Object],[object Object],% True Advocacy and Unconnected No Problems (86%) Problems (14%) Non-Consideration of Other HC Facilities  (65%) Consideration of Other Facilities  (35%) Base = 457 True Advocacy Detractor/Unconnected
Leveraging Informal Communication to Optimize Customer Loyalty Behavior
Benefits and Applications of  Text Mining/Analytics and Social Media Monitoring ,[object Object],[object Object],[object Object],[object Object],[object Object]
Broader Stakeholder Inclusion ,[object Object],[object Object],[object Object],[object Object]
Marketing Sea Change: Proactive Dialogue Participation ,[object Object],[object Object],[object Object]
Summary of Insights and Opportunities ,[object Object],[object Object],[object Object],[object Object],[object Object]
Thank you for Attending Contact our Presenter or Follow him on Twitter: Michael Lowenstein [email_address] Follow Michael on Twitter: @ lowen42 Questions?

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Harris Interactive Customer Wom Power Final

  • 1. Customer WOM Power Influence by Message Senders and Impact on Message Receivers’ Behavior Michael Lowenstein, PhD CMC Senior Vice President & Senior Consultant Harris Interactive Stakeholder Relationship Consulting Follow the discussion on Twitter at #WOMPower during today's webinar. 03/29/10 © Harris Interactive
  • 2. How Product/Service Experiences Impact Customers’ Downstream Communication and Loyalty Behavior and How Online and Offline Sources of Product/Service Information Influence Customer Decision-Making
  • 3. First, the Basics Strengthening Bonds and Building Relationships: Our Concept and Model of Stakeholder Commitment
  • 4. Evolution of the Quality / Satisfaction / Loyalty Movement Stage Two (1985-1993) Focus on Satisfaction Stage One (Pre-1985 ) Focus on Quality Stage Three (1924-2003) Focus on Competitors Stage Four (Today) Focus on Relationships
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  • 8. Conceptual Framework: Harris Interactive Customer Loyalty Model Relationship Diagnostics Relationship Conditions Commitment Dimensions Emotional Connection Commitment Rational Connection PURCHASE ENVIRONMENT Trust Satisfaction Product Satisfaction Price Competitiveness Corporate Reputation Policies Service Satisfaction Contractual Commitment Acquaintance Romance
  • 9. Loyalty Model for U.K. Grocery Stores Committed 37% 29% 30% 22% 12% 21% Rationally Connected 40% 34% 26% 16% 7% 3% Emotional Connected 5% 6% 12% 30% 47% 53% Disconnected 18% 31% 32% 32% 34% 23%
  • 10. Relationship Map: U.S. OTC Pain Relievers Disconnected Rationally Connected Committed Emotionally Connected Rational Emotional
  • 11. Customer Behaviors: Committed Customers Will Behave More Profitably Will Pay More Often Recommend Will Go Out of Way to Use RATIONALLY CONNECTED COMMITTED RELATIONSHIP DISCONNECTED EMOTIONALLY CONNECTED 11% 52% 7% 27% RATIONALLY CONNECTED COMMITTED RELATIONSHIP DISCONNECTED EMOTIONALLY CONNECTED 57% 88% 17% 44% RATIONALLY CONNECTED COMMITTED RELATIONSHIP DISCONNECTED EMOTIONALLY CONNECTED 24% 66% 4% 22%
  • 12. Committed Shoppers Spend More Per Month: Supermarket Tracking Study Results
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  • 16. Customer Advocacy Level Category Descriptions and Definitions DESCRIPTIONS OF ADVOCACY LEVELS Strong personal involvement with brand are active advocates/communicators for that brand Positively disposed towards the brand compared to others in repertoire and consideration sets; strong emotional involvement Relatively well disposed towards a brand will consider next time around but shallow emotional involvement Indifferent or passive towards a brand; may not consider the brand next time around; shallow to negative/disaffected emotional involvement Unconnected/Detractors Positive True Advocates Engaged
  • 17. Advocacy Measures Analysis April 27, 2007
  • 18. Advocacy Measures Analysis April 27, 2007
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  • 22. Functional Diagnostics Gaps $1M - $10M Financial Advisor Team % True Advocates - % Unconnected Top Box (Excellent) % Unconnected - % True Advocates Bottom 3 Box Online Services 1-800 Service Center Account Statement Investment Strategy and Research Handles/ Resolves Concerns Performance Relative to Market Performance Relative to Financial Goals UBS Overall Value Received Contribution UBS Makes to Community Q1. How would you rate UBS on each of the following…? Like other investor levels, these investors associate the financial advisor team more with the advocate profile than the unconnected profile. The 1-800 service center is strongly associated with unconnectedness among these investors.
  • 23. Branch Office Administrative Staff Diagnostics Gaps $1M - $10M Providing Clear and Accurate Answers to Your Questions % True Advocates - % Unconnected Top Box (Excellent) % Unconnected - % True Advocates Bottom 3 Box Completing Requests the First Time Asked Following Up to Resolve Any Issues Being Courteous and Professional Proactive Solutions/Reasons/Alternatives Q4. How would you rate the branch office administrative staff on the following? For this investment level, performance on all branch office/administrative staff attributes is more associated with advocates than with the Unconnected investors, again showing their close associations with UBS staff.
  • 24. Local UBS Branch Office Diagnostics Gaps $1M - $10M Physical Appearance of the Office % True Advocates - % Unconnected Top Box (Excellent) % Unconnected - % True Advocates Bottom 3 Box Hours of Operation Answering the Phone Promptly Making You Feel Welcome and Important Q5. How would you rate your local UBS branch office on the following? This high level investor group shows some indications of dissatisfaction with F eeling important and Hours of operation for UBS.
  • 25. Service Compared to a Year Ago $1M - $10M Q11. Compared to a year ago, has the service you received from UBS and your Financial Advisor improved, stayed the same, or declined? There is little relationship between advocacy segment and perceived UBS improvement among these investors. The Unconnecteds are the most likely to have felt strong declining performance, however.
  • 26. Service Compared to a Year Ago $1M - $10M Q11. Compared to a year ago, has the service you received from UBS and your Financial Advisor improved, stayed the same, or declined? There is little relationship between advocacy segment and perceived UBS improvement among these investors. The Unconnecteds are the most likely to have felt strong declining performance, however.
  • 27. Percentage of Total Savings/Investments With UBS $1M - $10M Q14. Approximately what percentage of your total savings and investments (excluding real estate and employer-sponsored savings/retirement plans) are with UBS? Advocates in this segment are most likely to have all their investments with UBS.
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  • 31. Example Advocacy Metrics Base—All Quarterly Respondents, FY08 Q1 N=355, FY08 Q2 N=390 42% of client customers surveyed are true advocates for the brand. However, 20% of customers surveyed are detractors. True Advocates 42% Positive 25% Engaged 14% Unconnected/Detractors 20% Strong personal involvement with brand , are active advocates/communicators for that brand Positively disposed towards the brand compared to others in repertoire and consideration sets, strong emotional involvement Relatively well disposed towards a brand, will consider next time around but shallow emotional involvement Indifferent or passive towards a brand: may not consider the brand next time around; shallow to negative/disaffected emotional involvement DESCRIPTIONS OF ADVOCACY LEVELS
  • 32. Swing Voter Analysis: What Turns Positive Customers into Detractors ? What Turns Engaged Customers into True Advocates ?
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  • 34. Word-of-Mouth: A Hot Topic!
  • 35. One Of This Era’s Key Marketing Trends 2003: Word-of-mouth valued/trusted far more Word-of-mouth Advertising Editorial 92 50 40 1977: Word-of-mouth valued/trusted somewhat more Word-of-mouth Advertising Editorial 67 53 47
  • 36. Why Word of Mouth Matters: Trust and Authenticity People Don’t Trust Advertising… … People Trust Others 76% don’t believe that companies tell the truth in advertisements (Yankelovich, 2005) 68% trust other people “like themselves”. Up from 22% in 2003 (Edelman Trust Barometer)
  • 37. Why Word of Mouth Matters Just About Everyone is Talking 76% of all Americans talk about at least one brand a day (and average 10) (Talk Track™ Keller Fay Group 2006) 15% of every conversation in America includes something about a product or service (Northeastern University)
  • 38. Harris Interactive WOM Research: A Decision-Making Impact Tracking Mechanism for Product/Service Categories and Individual Companies/Consideration Sets
  • 39. Conventional WOM/Communication Impact Grid: It's Time for Reconsideration [ Occasion ] [ Setting ] [ Medium/Mode ] [ Social Definition/Client Mkt Segment ] [ Motivation ] [ Positive/Negative Message ] ~ ~ ~ ~ ~ Perception/Behavior Effect* Inside Out : Companies endeavor to influence attitudes and perceptions of customers/consumers, as well as where, how, and when communication occurs Outside In : Customers/consumers informally influence behavior of others on behalf of selected (preferred) companies When does communication take place? How does communication take place? Where does communication take place? Who communicates? What is communicated ? Why does communication take place?
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  • 42. Contrary to prevailing belief that the overwhelming majority, and behavioral influence, of WOM takes place online, Andy Sernovitz, founder of Word of Mouth Marketing Association and author of Word of Mouth Marketing , has observed: “Only about 20 % of word of mouth happens online. When it does play a role, it usually sparks the 80% of word of mouth conversations that actually happen face-to-face. Real word of mouth dips in and out of different spaces.”
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  • 76. Leveraging Informal Communication to Optimize Customer Loyalty Behavior
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  • 81. Thank you for Attending Contact our Presenter or Follow him on Twitter: Michael Lowenstein [email_address] Follow Michael on Twitter: @ lowen42 Questions?