Consumer advisory panelsThe next big thing in word-of-mouth marketing?

There’s nothing new about consumer panels as a marketresearch tool. But the internethas magnified the potential forengaging vast numbers of consumers to create loyalty andadvocacy. Paul Marsden describeshow consumer advisory panelsare used by P&G and others toinvolve their consumers in allaspects of brand development,thereby strengthening loyalty

HOW DO YOU unlock salesrevenue by harnessing word ofmouth? Forget the usual sus-

pects – buzz, viral and stealth market-ing – they are PR stunts on steroidsthat create awareness by getting yourmarketing (but often not your prod-uct) talked about, but rarely have anysignificant impact on sales. Instead,take the lead from consumer goodsgiant Procter & Gamble, and set upyour own online consumer advisorypanel.

Consumer advisory panels harness‘involvement’ to create loyalty andadvocacy among panel members –consumers who buy more and recom-mend more (two variables unequivo-cally linked to sales growth:Reichheld 2003; Marsden 2005).

The idea behind consumer advisorypanels is simple. Instead of marketingat consumers, market with them byinvolving them in what you do, andgiving them a say in how you do it. Byconnecting, collaborating and co-cre-ating with your market through a

consumer advisory panel, you can turnfickle consumers in loyal customersonly too willing to recommend.

A scalable solution to word-of-mouth marketingConsumer advisory panels are notnew, and have long been used to helpmarketers make smart decisions in linewith market demands. What is newabout these panels is that they aremoving online and becoming bigger,much bigger. Procter & Gamble, whoare leading the field, has upwards of750,000 members in its two online USconsumer advisory panels ‘Tremor’(for teens) and ‘Vocalpoint’ (for‘moms’). Panel participants, recruitedby banner ads and word of mouth areregularly invited to participate inonline VIP votes on P&G and ‘part-ner’ brands, allowing them to call theshots on anything from pack design,logos, new flavours, strap-lines, adsor promotional material (see the boxon the next page). This ‘1-clickinvolvement’ is simple, smart andscalable – and creates a loyalty effect

W O R D O F M O U T HPAUL MARSDEN

2 Market Leader Summer 2006

By PAUL MARSDEN

Dr Paul Marsden is a social psychologist and freelance market researcher.

and advocacy effect that, in controlledtests, has been found to boost sales by10–30%.

Why consumer advisory panels drive sales: theHawthorne EffectBut why should setting up an onlineconsumer advisory panel boost sales?The answer is because it is a scalablesolution to harnessing a very powerfulpsychological phenomenon, known asthe Hawthorne Effect, in large num-bers of consumers.

The Hawthorne Effect is namedafter the Hawthorne production plantof Western Electric, just outsideChicago, where it was first discovered,quite by accident back in the 1920s.Researchers from MIT and Harvardfound that by inviting employees togive their views on new working con-ditions in the factory, before they wererolled out, employees would systemat-ically be favourable to them. What’smore, when they trialled these newworking conditions their productivityincreased.

For example, when employees wereengaged in research testing brighterlighting in the factory, feedback waspositive, and productivity increasedwhen they trialled working with thebrighter lighting. However, whenother employees were involved in test-ing subtler lighting conditions, theyliked that too – and productivityincreased. Confused, the investigatorsre-ran the research, progressivelydimming the lighting, but participantsremained loyal to whatever it was theywere asked about, and productivitykept increasing until the light was nobrighter than moonlight!

A second series of tests at theHawthorne plant confirmed the pecu-liar phenomenon – engaging employ-ees in research to test shorter workinghours produced advocacy andincreased productivity. But then so didresearch involving employees inresearch testing longer working hours.

The researchers finally realised thatwhat was happening had absolutely

nothing to do with what was beingresearched, and everything to do withinvolving people in the name ofresearch. They called this effect theHawthorne Effect: the effect of engag-ing people in marketing research oncreating loyalty and advocacy. Whatwas happening was that the partici-pants felt flattered and privileged to beinvolved in research on a new initiative– and this biased their view towardswhatever it was they were testing.

For nearly a century, the HawthorneEffect has been something of a bane tomarket researchers; it systematicallyoccurs and biases market researchfindings towards whatever is beingtested. In focus groups, theHawthorne Effect can be extremelystrong – after 90 minutes of involve-ment in a new product concept, par-ticipants often leave the group pas-sionate advocates of what they havebeen asked their advice on.

But for marketers the HawthorneEffect represents a real opportunity;engage target consumers in researchand by listening to what they have to sayyou create an instant market of loyaladvocates hungry to buy your product.Do this online, through simple onlinevoting, and you can reach tens of

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In focus groups, theHawthorne Effect canbe extremely strong –after 90 minutes ofinvolvement in a newproduct concept, participants often leavethe group passionateadvocates of what theyhave been asked theiradvice on

PAUL MARSDENW O R D O F M O U T H

P&G’s Tremor & VocalpointCreating loyal advocates through consumer advisory panels

! Helping develop Vanilla Coke’s ‘Nothing Else Like It’ billboard campaignand come up with intriguing messages to appear on promotional heat-sensitive cans

! Voting on launching Snoop Dogg’s new line of shoes ! Advising on the trailer for the movie Biker Boyz! Choosing which Herbal Essences commercial to air for promoting Fruit

Fusions Tropical Showers range ! Recommending which fashion model to use in a Pantene commercial ! Selecting backing music for a Pringles advertisement ! Picking models for a body-spray calendar ! Helping design the new Crest Spinbrush ! Voting on a T-shirt design for Vans ‘Warped Tour’ concert ! Naming the DreamWorks SKG movie Eurotrip ! Choosing the logo for the teen movie Win a Date with Tad Hamilton!

thousands of consumers, instantly cre-ating a sizable market that is ready tobuy and recommend. This is preciselywhat P&G’s consumer advisory pan-els, Tremor and Vocalpoint, do: createready-made markets that not only buythe products, but act as a volunteersalesforce.

A new way of selling to consumersP&G is not alone in using theHawthorne Effect with consumeradvisory panels designed to drive salesby creating loyalty and advocacy.Other brands investing in this newway of selling to consumers includeConverse, Cadillac, Mercedes, SixtCar Rentals, BMW, Boeing, Crayola,Google, Napster, Macromedia,Microsoft, Audi, Nike, New LineCinemas, MTV and Sears (see the boxabove).

Conclusion: the future as co-creation?Online consumer advisory panels are anew way of selling to consumers thatuse the Hawthorne Effect to createloyalty (purchase frequency) andadvocacy (referral value) among pan-ellists. But they represent a win–winfor both business and consumers. Byallowing consumers to call the shotson marketing and innovation, con-sumers are empowered and get whatthey want – not what the businessthinks they want. And by treating con-sumers as partners rather than targets,and engaging markets in dialoguerather than interruptive monologue,consumer advisory panels walk themarketing talk – putting the con-sumer, not the marketer, at the heartof marketing.

Indeed, consumer advisory boardsrepresent a radical departure fromthe old ‘command and control’

model of marketing, and embracethe new ‘connect and collaborate’zeitgeist, where marketing is donewith consumers rather than at them.By connecting, collaborating and co-creating with markets throughconsumer advisory boards, market-ing is learning to respect the verypeople it depends upon for its sur-vival: consumers. "

paul@viralculture.com www.viralculture.com

ReferencesMarsden, P. (2005) ‘Connected mar-

keting’, in Kirby, J. & Marsden, P.(eds) Connected Marketing: the Viral,Buzz and Word of Mouth Revolution.London: Butterworth.

Reichheld, F. (2003) ‘The one numberyou need to grow’, Harvard BusinessReview, December, pp. 1–11.

W O R D O F M O U T HPAUL MARSDEN

4 Market Leader Summer 2006

Using consumer advisory panels to drive sales

! Converse, Cadillac, Mercedes and Sixt Car Rentals all use research to create word-of-mouth advocates by giving target buyers and brand fansa say in their advertising campaigns.

! BMW, Audi and Boeing create loyal word-of-mouth advocates throughtheir virtual innovation labs, which give car enthusiasts and aviation fans asay in new product development.

! Crayola drives demand with VIP Votes that let consumers decide on thenames of new crayon colours (the four crayon shades on the right werenamed by consumers for Crayola’s 100th birthday).

! Google, Microsoft, Napster and Macromedia all use research to createloyal advocates through beta-testing research programmes.

! The Tate Gallery in London builds loyalty and advocacy by inviting visitors to call the shots on how exhibits are labelled.

! New Line Cinema stimulates box office sales with word of mouth by giving fans a say in movie production decisions (e.g. The Lord of theRings).

! Brewtopia, the Australian beer company, and Kaiser beer in Brazil drivesales by inviting consumers to vote on product packaging and marketing.

! Staples, the office supplies retailer, and home furnishings giant IKEA drivedemand by engaging customers with research on innovation ideas.

! Sears department stores create word-of-mouth advocates for their Portrait Photo Studios by inviting opinion-leading mothers to shape theirmarketing.