PR Practices: WOM Still Wins in the End

These days, there are more ways than ever to publicize a product or service so as to increase its popularity and its sales.

And yet … the type of thing most likely to convince someone to try a new product – or to change a brand – is a reference or endorsement from someone they know and trust.

Omnichannel marketing promotions firm YA conducted research in 2016 with ~1,000 American adults (age 18+) that quantifies what many have long suspected: ~85% of respondents reported that they are more likely to purchase a product or service if it is recommended by someone they know.

A similarly high percentage — 76% — reported that an endorsement from such a person would cause them to choose one brand over another.

Most important of all, ~38% of respondents reported that when researching product or services, a referral from a friend is the source of information they trust the most.  No other source comes close.

This means that online reviews, news reports and advertising – all of which have some impact – aren’t nearly as important as the opinions of friends, colleagues or family members.

… Even if those friends aren’t experts in the topic!

It boils down to this:  The level of trust between people has a greater bearing on purchase decisions because consumers value the opinion of people they know.

Likewise, the survey respondents exhibited a willingness to make referrals of products and services, with more than 90% reporting that they give referrals when they like a product. But a far lower percentage — ~22% — have actually participated in formal refer-a-friend programs.

This seems like it could be an opportunity for brands to create dedicated referral programs, wherein those who participate are rewarded for their involvement.

The key here is harnessing the referrers as “troops” in the campaign, so as to attract a larger share of referral business and where the opportunities are strongest — and tracking the results carefully, of course.

2016 says goodbye to some iconic American brands …

tcAs in every year, 2016 has seen the fall of famous brands; some are young upstarts that flamed out quickly, but others are venerable names that have been with us for decades.

Here are ten of the more notable casualties of the year – albeit a few of them still kicking but for all intents and purposes, going lights-out:

ap-logoA&P – This brand name goes back 150 years … but eventually even venerable A&P couldn’t survive in the cutthroat grocery market.  Actually, this brand’s been on life support for a while now, but has always managed to scrape by.  No longer.  Albertstons Companies – itself facing big competition in the grocery segment – has purchased the remaining 600 A&P outlets and will re-brand those it keeps open under its Acme brand name.  Nevertheless, at a century and a half it’s been quite a run – one that only a very few other brands can match.

american-appAmerican Apparel – When a once high-flying apparel company has its equally high-flying chief executive fending off salacious reports of secretly recorded sex videos – yes, they’re on the Internet – coupled with spiraling debt levels and plummeting sales, can Chapter 11 be far behind?  You already know the answer.

office-maxOffice Max – Sales at the big three U.S. office supply chains have struggled for a number of years, but Office Max was the one to fall victim first.  Its merger in 2013 with Office Depot began the brand’s slide, and now the final nail is in the coffin with the merger of Office Depot and Staples.  What’s the rationale for continuing to have three store brands under one company umbrella?  Answer:  No reason at all … which is why the weakest of the three brands is now becoming history.

ogOlympic Garden – In a development that some might characterize as divine retribution, the Las Vegas “adult” establishment colloquially known as “The OG” couldn’t handle its myriad legal battles even as it continued to attract big crowds.

radioshakRadioShack – OK, we still see RadioShack outlets in certain locations around the country – typically in small- to medium-sized markets.  But they’re co-branded locations with Sprint.  The reality is that this nearly 100-year-old brand is fading away; the only question is whether we’ll cease seeing the name in five years or just one or two.

searsSears – Another iconic brand name has been struggling mightily in the past decade or so, despite its merger with Kmart.  The company has lost more than $1 billion in each of the past three years.  Now it appears that the Sears name is the one that will disappear as its store locations continue to dwindle – nearly 250 in 2015 and close to another 100 this year.  At that rate, there’ll be none left before long.

simplyhiredSimplyHired – An international job search engine with upwards of 30 million active users that once sparred with the likes of Monster.com, ultimately this HR resource was unable to successfully compete in the space, shutting down in mid-year.

sportsSports Authority – A cautionary tale of what happens to a big retailer when it fails to keep its operations and product offerings fresh and appealing.  This retailer has been absorbed into Dick’s Sporting Goods, which has been far more nimble – and successful – in the “big box” sporting goods niche.

us-airways-logoUS Airways – We knew this had to be coming eventually; in 2013, this airlines’ merger with American Airlines was finalized.  Now that its operating systems are fully consolidated, one of the brand names was bound to disappear – and it’s US Airways.  Just like we all knew that Southwest Airlines would eventually consign the AirTran brand name to the dustbin, the same thing is happening with US Airways now.

vineVine – In October, Twitter shut down this video-sharing app so it could refocus on its (also struggling) core business.  Vine was definitely a flash-in-the-pan brand – barely a half-decade old.

So, now it’s time say a fond farewell to these brands. For a good many of them, the names may soon disappear, but they won’t be forgotten …

Do you have other 2016 brand casualties you’d add to the list?  Please share your choices with other readers here.

Social media: The biggest casualty of the U.S. presidential election?

smrrOnly one presidential candidate was a winner on election night. But there was more than one loser.

Sure, minor-party candidates lost. But I’d posit that social media itself was a loser as well.

It isn’t an exaggeration to contend that the 18-month long presidential campaign has had a corrosive effect on the social media landscape.

You could even say that the social media landscape became downright “anti-social,” thanks to the 2016 campaign.

For those who might have posted politically-oriented social media posts, they’ve risked receiving strident arguments, flamethrower responses and alienated friends.

Along those lines, a recent Pew Research study found that significant percentages of people have blocked individuals or adjusted their privacy settings on social media to minimize their exposure to all the vitriol.

It’s a far cry from social media’s promise in the “good old days” – not so long ago actually — when these platforms enabled people to stay in touch with friends and make acquaintances across the country and the world that they would never have been able to forge in the days before social platforms.

The easy ability to share information and interests only added to the appeal of social media, as people expanded their horizons along with their network of friends.

Companies and brands got in on the action, too. They found social media a welcoming place – particularly in the case of consumer brands where companies could ride the wave of social interaction and promote all sorts of products, services and worthwhile causes.

Advertising and promotion on social media naturally followed, with many companies allocating as much as 20% or more of their annual marketing budgets to those endeavors.

Until quite recently, that happy scenario seemed to be holding, with brands launching interesting, fun, quirky or cause-oriented shareable content in the hopes that they would “go viral” and pay dividends far in excess of the resource outlay.

What a difference 18 months makes. Suddenly, brands are spending only about half as much on social media marketing as they attempt to stay above the fray.  That also means staying far away from venturing into current topical discussions, lest their prickly digital audiences become instantly polarized.

Unfortunately, for brands who wish to avoid controversy arising from even the most seemingly innocuous of postings, social media is no longer a welcoming meadow of lush green grass and bright flowers. It’s closer to a war-torn field peppered with land mines just waiting to explode.  Hence the hasty retreat.

Unfortunately, just like trying to unscramble an egg, it’s very hard to see social media ever going back to what it used to be.

And for that state of affairs, there’s plenty of blame to go around.

Brands and “cause marketing”: How much is too much?

cmWhen brands conduct attitudinal studies of their customer base, the research often finds that people respond favorably to so-called “positive” or “progressive” causes.

The ALS “Ice-Bucket Challenge” is probably Exhibit A for the potency of such an initiative — including its fantastically successful viral component.

So it’s only natural that brand managers would think in terms of tying their brands to high-profile events such as Earth Day or popular health causes such as efforts to cure cancer or heart disease.

Perhaps the activity is doing a highly publicized community initiative … hosting a well-publicized 5K run or similar event … or donating funds for the cause in a new and attention-grabbing way.

But here’s the rub: With so many national brands doing precisely these sorts of things, it’s become something of an echo chamber.  What once was fresh and novel now seems decidedly ho-hum.

Besides, with so much breathless “cause activity” happening, it’s little wonder that many consumers are seeing through all the hype and attaching near-zero attribution to the brands involved.

The situation is even more problematic when there’s little or no connection between the brand’s products or services and the cause being supported.  The problem is, when brands start vying for attention — especially allying with causes that have nothing at all to do with their core business — “authenticity” goes out the window.

In the process, the brands may telegraph something even worse than irrelevancy; they look desperate for attention.

Of course, all of this evidence doesn’t mean that major brands aren’t continuing to try to attach themselves to the positive vibes of social action. Some recent examples are these:

More problematic than these campaigns was the Starbucks initiative last year in which its baristas were encouraged to start conversations about race relations, interacting with customers waiting in line for their espressos and muffins.

Let’s just say that the idea looked better on paper compared to how it panned out in real life — with more than a few Starbucks customers finding the initiative awkward, intrusive and off-putting (and taking to Twitter to vent their feelings).

Thinking about the good and the not-so-good of “cause marketing,” it appears that the more successful of these initiatives are ones which hew more closely to a brand’s own essence.

Patagonia is a good example of this. Its mission has always been to design and manufacture quality products in an environmentally responsible way, and it promotes proper stewardship of the land and of material possessions through many initiatives that just “feel right” for this particular brand.

And in the realm of apparel and cosmetics, a whole bevy of brands have jumped into conversations about “positive self-image.” While to some people it may seem self-serving for brands like Dove® soap, American Eagle lingerie and Lane Bryant plus-size apparel to become active in such causes, one can also see the logical connection between the products these brands sell and the themes they are spotlighting in these campaigns.

Authenticity and genuineness: Not only are they the hallmark of successful brands, they’re the acid test for successfully grabbing a share of the “social good” pie.  Who’s doing it right … and who’s missing the mark?  Let us know your nominations.

Who are the World’s Most Reputable Companies in 2016?

I’ve blogged before about the international reputation of leading companies and brands as calculated by various survey firms such as Harris Interactive.

RI logoOne of these ratings studies is conducted by market research firm Reputation Institute, which collected nearly 250,000 ratings during the first quarter of 2016 from members of the public in 15 major countries throughout the world.

The nations included in the company reputation evaluation were the United States, Canada, Mexico and Brazil in the Americas … France, Germany, Italy, Spain, the United Kingdom and Russia in Europe … India, China, South Korea and Japan in Asia … as well as Australia.

Approximately 200 leading companies were rated by respondents on a total of seven key dimensions of reputation, including:

  • Products and services
  • Innovation
  • Workplace
  • Governance
  • Citizenship
  • Leadership
  • Performance

In the 2016 evaluation, the top-rated companies scored “excellent” (a rating of 80 or higher on a 100-poinst scale) or “strong” (a rating of 70-79) in all seven reputation categories. 2016’s “Top 10” most reputable firms turned out to be these (ranked in order of their score):

#1 Rolex

#2 The Walt Disney Company

#3 Google

#4 BMW Group

#5 Daimler

#6 LEGO Group

#7 Microsoft

#8 Canon

#9 Sony

#10 Apple

Different companies scored highest on specific attributes, however:

  • Apple: #1 in Innovation and in Leadership
  • Google: #1 in Performance and in Workplace
  • Rolex: #1 in Products & Services
  • The Walt Disney Company: #1 in Citizenship and in Governance

VAt the other end of the scale, which company do you suppose was the one that suffered the worst year-over-year performance?

That dubious honor goes to Volkswagen.  In the wake of an emissions scandal affecting the brand internationally, VW’s reputation score plummeted nearly 14 points, which was enough to drop it out of the Top 100 brand listing altogether.

It’s quite a decline from the VW’s #14 position last year.

The complete list of this year’s Top 100 Reputable Companies can be accessed via this link. You may see some surprises …

For authenticity in advertising … perhaps it’s time to stop making it “advertising.”

AT

Take a look at the interesting data in the chart above, courtesy of Nielsen.

Among the things it tells us is this: If there’s one thing that’s universally consistent across all age ranges – from Gen Z and Millennials to the Silent Generation – it’s that nothing has a more positive impact on buying decisions than the recommendation of a family member, a friend or a colleague.

Not only is it true across all age ranges, it’s equally true in business and consumer segments.

The chart also shows us that, broadly speaking, younger people tend to be more receptive to various advertising formats than older age segments.

this isn’t too surprising because with age comes experience – and that also means a higher degree of cynicism about advertising.

Techniques like the “testimonials” from so-called “real people” (who are nonetheless still actors) can’t get past the jaundiced eye of veteran consumers who’ve been around the track many more times than their younger counterparts.

Someone from the Boomer or Silent Generation can smell these things out for the fakery they are like nobody else.

But if friends and colleagues are what move the buy needle the best, how does advertising fit into that scenario? What’s the best way for it to be in the mix?

One way may be “influencer” advertising. This is when industry experts and other respected people are willing to go on record speaking positively about a particular product or service.

Of course, influencers have the best “influence” in the fields where they’re already active, as opposed to endorsements from famous people who don’t have a natural connection to the products they are touting. Such celebrity “testimonials” rarely pass the snicker test.

But if you think about other people like this:

  • An industry thought leader
  • A prominent blogger or social networker in a particular field or on a particular topic
  • A person with a genuine passion for interacting with a particular product or service

… Then you have a person who advocates for your brand in a proactive way.

That’s the most genuine form of persuasion aside from hearing recommendations from those trusted relatives, friends and colleagues.

Of course, none of that will happen without the products and services inspiring passion and advocacy at the outset. If those fundamental factors aren’t part of the mix, we’re back to square one with ineffective faux-testimonials that feel about as genuine as AstroTurf® … and the (lack of) results to match.

In case you’re wondering … consumers don’t really care about brands all that much.

branding“I don’t want a ‘relationship’ with my brands.  I want the best products at the best price.” — Jane Q. Public

In the era of interactive marketing and social media, there’s often a good deal of talk about how certain brands are successfully engaging their customers and creating an environment of “brand love” — or at least “brand stickiness.”

It’s not only consumer brands like Chipotle and Under Armour, but also B-to-B and hybrid brands like Intel, Apple and Uber.

As a person who’s been involved in marketing and advertising for well over a quarter-century, I tend to treat these pronouncements with a little less open-mouthed awe than others.

I get how when a brand is particularly admired, it becomes the “go-to” one when people are in the market for those particular products and services.

But the idea that there’s real “brand love” going on — in a sense similar to people forging close relationships with the people in their lives — to me that’s more far-fetched.

The marketing research I’ve encountered appears to refute the notion as well.

Case in point: In an annual index of “meaningful brands” published by the Havas MarComm agency, the research finds that very few consumers cite brands they “can’t live without.”

The 2015 edition of the Havas Meaningful Brands Index has now been released … and the results are true to form. Among U.S. consumers, only about 5% of the 1,000 brands evaluated by Havas across a dozen industries would be truly missed if they were no longer available.

It’s a big survey, too:  Havas queried ~300,000 people across 34 countries in order to build the 2015 index. Broadly speaking, the strength of brands is higher in countries outside the United States, reflecting the fact that trust levels for leading brands in general are higher elsewhere — very likely because lesser known brands or “generics” have a greater tendency to be subpar in their performance.

But even considering the brand scores globally, three out of four consumers wouldn’t miss any brands if they suddenly disappeared from the market.

What are the exceptions? Looking at the brands that scored highest gives us clues as to what it takes to be a brand that people truly care about in their lives.

Samsung is ranked the #1 brand globally. To me, it makes perfect sense that the manufacturer of the most widely sold mobile device on the planet would generate a strong semblance of “brand love.”

Even in the remotest corners of the world, Samsung has made the lives of countless people easier and better by placing a powerful computer in their pocket. It’s only logical that Samsung is a brand many people would sorely miss if it disappeared tomorrow.

The second strongest brand in the Havis index is Google. No surprise there as well, because Google enables people to research and find answers on pretty much anything that ever crosses their minds. Again, it’s a brand that most people wouldn’t want to do without.

But beyond these, it’s plain to see that nearly all brands just aren’t that consequential to people’s lives.

With this in mind, are companies and brands spending too much energy and resources attempting to get customers to “care” about them more than simply to have a buying preference when the time comes to purchase products and services?

Brand-LoyaltyRelated to that, is adding more “meaning” to a brand the answer to getting more people to express brand love? Or does it have far more to do with having products that meet a need … work better than competitors’ offerings … and are priced within the means of more people to purchase?

Havas — and common sense — suggests it’s the latter.

Do that stuff right, and a company will earn brand loyalty.

All the rest is just froth on the beer … icing on the cake … good for the psychological bennies.