Bureau West

It’s well-known that recommendations from friends are among the top influencers of purchases.  And with various online and social networking applications, there are more ways than ever to encourage word-of-mouth marketing.  Marketers need to avoid the pitfalls, though. In our conversations with consumers, we’ve found they’re open to programs that reward referrals, as long as they don’t look like bribes.  Programs that offer a benefit to both the person making the referral and the person being referred tend to be regarded positively.

For example, Abe’s Market, a Chicago-based online retailer of various natural products, added a Share It feature to its website. The feature offers shoppers 10% off their orders if they agree to tell three friends about the products in their online shopping carts. After a customer enters three e-mail addresses, her buddies get a message that she is “shopping for natural products on AbesMarket.com, and wants to share some great finds.” The e-mail includes a coupon code that lets the friends save 10 percent on any order, too.  So far, the strategy is paying off. About half of Abe’s Market customers use Share It, and those who use it spend about 30 percent more than those who don’t.

Another company that launched a successful refer-a-friend marketing campaign is Roku, maker of devices that stream online media content.  Through market research, the company learned that about a quarter of its one million customers had encouraged friends to buy one. Roku now sends an e-mail to customers 45 days after a purchase, offering them one free month of Netflix service if someone they refer purchases a Roku player. In the first three months, 15,000 customers recommended Roku to their friends and 1,500 customers bought Roku players as a result.  The refer-a-friend marketing campaign has already proved to be more effective than online banner ads or paid search ads. People who were referred by friends were three times more likely to purchase than visitors who clicked on online ads.

To learn how to encourage word-of-mouth referrals among your customers, talk to them!  Give us a call at (818) 752-7210.

Sources: “Tell Your Friends About Us,” Inc., July/August, 2011; Bureau West research

Technology isn’t just for young people any more.  For several  years now, talking to research participants, we’ve been encountering more and more people over 40 who are comfortable with technology and online applications.  Many are over 60.  An article in this month’s Inc. Magazine confirms the trend: age is no longer a barrier to technology adoption.

In the article, John Gerzema, executive chairman of BrandAsset Valuator Consulting, says

“My company polls 16,000 people each quarter in the United States. According to our data, 51 percent of Facebook users are over 40. For YouTube, the number is 49 percent, and for Twitter 45 percent. Moreover, 47 percent of people in that age bracket believe they are innovative, and 49 percent feel they’re ‘up to date on the latest technology.’  In the business-to-business realm, 47 percent of over-40s describe themselves as ‘highly involved in the technology decision-making process’ at their companies.”

There are two important implications to consider:

1. Online advertising can be an effective way to reach prospects over 40.
2. New technological options can be adopted by the mass market more quickly now (rather than just by a small segment of young geeky types).

In our research interactions, we’ve discovered that another age-related maxim is unfounded: young people are not necessarily technology experts.  While they’ve grown up using technology, most just know the basics; they require IT support almost as often as their older brethren.

To learn more about your customers and prospects, talk to them!  Give us a call at (818) 752-7210.

Sources: “The Geeks Are Graying,” Inc, June, 2011; Bureau West research

I read an amusing article in Fortune Magazine a few weeks ago.  In his humorous column, Stanley Bing says he can’t handle the volume of emails he has been receiving from Toyota since he bought his car:

“I have on my desk as I write this a stack of e-mail printouts half an inch high, and that’s from less than six weeks! It’s too much! My in-box is clogged with your importunings, offerings, and requests for validation. Stop! I beg you!”

The column got me thinking about the topic of customer engagement.  Done right, keeping customers engaged can translate to significant profits for businesses.  But if we go too far, customer engagement efforts can be counter-productive.

We frequently ask consumers about companies’ customer engagement efforts in focus groups.  And that’s when something interesting happens.  Initially, consumers say things like “I throw away all junk mail” or “I don’t have time for that kind of email.”  But when we talk to them further, it turns out they remember various communications they received.  And after discussion, when we ask if they’d prefer to receive less communications, many say they would actually be annoyed if the company did not tell them about various promotions.

This is a great example of a situation where focus group discussions are preferable to one-on-one interviews.  In interviews, people tend to give the “politically correct” answers, the things they think they should be saying.  But in group discussions, people hear something someone else says, and it reminds them of things they might not have thought of otherwise.  And once one person “admits” to something, the others feel more comfortable opening up.

Back to customer engagement: how much is too much?  We need to consider not just the frequency of communications, but also their content.  Pay close attention to unsubscribe requests, perhaps including an option for customers to tell you why they unsubscribed.  And of course, ask your customers how they want to engage with you and why.

To learn about your customers’ engagement preferences, give us a call at (818) 752-7210.

Sources: “Toyota, I Love You, Goodbye,” Fortune, May 2, 2011; Bureau West research

It’s great when marketing development works.  An article in Fast Company magazine provides a great example of how research + insight = effective marketing.

Sales of baby carrots were down, and a major producer was looking for ways to reverse the decline.  They contacted ad agency Crispin Porter + Bogusky.  Market research found that people were buying regular carrots instead of baby carrots to save money in the recession, and then forgetting about them in the vegetable drawer.  They also learned that, after customers open a bag of baby carrots, they dry out.  And the agency knew that advertising that tells people to eat their vegetables for health reason tends to be ineffective.

The insight: instead of marketing baby carrots as an antidote to junk food, they decided to portray baby carrots as junk food. The baby carrots were repackaged in individual snack packs made of brightly-colored crinkly plastic that look like a bag of chips.  They launched an ad campaign called “Eat ‘Em Like Junk Food” in two test markets, and even installed baby carrot vending machines in a couple of high schools.  See the website http://www.babycarrots.com/ to get a feel for the campaign.  The result: sales in the test markets were up 10%-12% over the year before, compared to virtually no improvement in other markets.

To learn how your customers and prospects feel, talk to them!  Give us a call at (818) 752-7210.

Sources: “The New Junk Food,” Fast Company, April, 2011; babycarrots.com