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The Power of Consumer-to-Consumer Recommendations in the Telecom Sector
About RewardStream
RewardStream is an emerging leader in consumer-to-consumer (C2C) marketing solutions for brands targeting the socially connected customer.
We help clients to energize consumers to recommend & refer to their trusted networks, and then to evolve them into loyal, high value relationships.
Since 1999, we have delivered customer referral, loyalty and engagement solutions for some of the world’s most esteemed brands.
Speakers
Alexandra BestVP Marketing
RewardStream
Agenda
• Quick Look: Marketing in the Telecom Sector• Overview of Research: Keller Fay & WOM for the
Telecom Sector• Fundamentals for Referral Marketing Success• Q&A
Have a Question?
• Use the Chat window in GoToMeeting to submit your questions throughout the session; we have left time for Q&A at the end of the webinar
• If we don’t get to your question during the session, please send questions directly to [email protected]
Dynamics Facing Telecom Marketers
Facebook and Mobile: The New Search?
• Search was once the stalwart of the web marketing world• The growth of social networking sites and non-PC devices
like mobile has encouraged retailers to shift focus• Search is predicted to lose share from 55% to 44% of all
interactive spend in 2016
*Forrester, US Interactive Marketing Forecast 2011 – 2016 (published August 2011)
“We do on the order of a billion queries a day, and we’re not even trying. Most of it is people trying to find people, but a bunch does link to commercial behavior like trying to find brand pages. You get these search engines where you type in keywords and it runs some magic to tell you what it thinks you want. But I think search is evolving to provide specific answers. Facebook is pretty uniquely positioned to answer most of the questions people want to ask. Like “What restaurants do my friends like?”
- Mark ZuckerbergAt Techcrunch Disrupt
September 11, 2012
North Americans Overwhelmingly Trust Impartial Sources
• Consumers trust recommendations from people they know, consumer opinions and editorial content
• They are highly skeptical of brand-sponsored messaging
• Only 52% place trust in brand-sponsored websites and emails
Do You Know Who Your Conversation Catalysts® Are?
Does the value of any one customer reside solely in what that person buys?
“How Valuable is Word of Mouth,” Kumar, Petersen, Leone: Harvard Business Review, 2007
No. The value of any one customer does not reside solely
in what that person buys.
• Ideally, a company that wants to know a customer’s full value will include a measure of that person’s ability to bring in profitable new customers
• Nearest most companies get to establishing the value of a customer’s referral power is some gauge of the individual’s willingness to make referrals (e.g. Bain & Co., Fred Reichheld “Net Promoter” Score)
How Valuable Is Word of Mouth?
Method
• Polled 9900 Telco customers, 6700 Financial Services customers about referral intentions
• Then tracked customers’ actual behavior and behavior of the referred customers over time
Results
“Marketers spend millions of dollars on elaborately conceived advertising campaigns, yet often what
really makes up a consumer’s mind is not only simple but also free: a Word of Mouth
recommendation from a trusted source. A Word of Mouth recommendation is the primary factor behind 20 to 50% of all purchasing decisions.“
- McKinsey Quarterly, April 2010
Word of Mouth: The Keller Fay Report General Findings
Research Goals
• What is the influence of word-of-mouth recommendations in telecommuncations category?
• Are word-of-mouth recommendations more or less influential at different points during the consideration and purchase lifecycle?
• Is there a difference in the impact of solicited vs. unsolicited recommendations?
Who is The Keller Fay Group?
• The first research-based marketing consultancy focused exclusively on word of mouth
• A few nuggets from The Face-to-Face Book: • It’s an invaluable tool for marketers who want to spread
the word about their products and brands faster than the speed of Facebook and with far greater impact.
• In-person social networking, not online marketing, is the secret to soaring revenues.
• 90% of recommendations that lead to consumer action happen offline.
The Methodology
• RewardStream commissioned Keller Fay to study how recommendations affect purchases in Banking, Vacation Travel, Communications, Subscription Entertainment, and Retail Categories
• The survey was conducted among a total sample of 1,274 adults ages 18-59 who had purchased, applied to, or subscribed to a new product or service in the past 12 months.
The Overall Importance OfPersonal Recommendations
Recommendations are Frequent
Very Often16%
Often43%
Some-times33%
Rarely 7%
Never1%
Recommended a product or service to someone
Very Often11%
Often40%
Some-times42%
Rarely 6%
Never1%
Made a purchase based on a rec-ommendation
Recommendations Impact More Purchases Than Any Other Source
A personal recommendation
Past experience
Something I saw in a store/office
Online consumer review websites
An advertisement in a magazine, newspaper, or online
Price comparison websites
A commercial on TV or the radio
Something on a package, flyer, or brochure
An article in a magazine, newspaper, or online
A TV or radio program
Another type of website
Online blog
Another type of ad
Social media site
Something else
40%32%
19%17%17%
15%14%
10%9%
6%5%
4%3%
2%22%
% of purchases influenced at any purchase stage, all categories
Over 20% of responses of “Something Else” include a reference
to price, cost, an offer, or sale.
Other items include convenience or need, or general references to family
and friends.
Face-to-face Communication is the Most Predominant Way to Make a Recommendation
82%
15%
5%
1%
1%
1%
1%
6%
% of purchases influenced by recommendations by mode at any stage, all categories
Face-to-face
Over the phone
Via e-mail
Via SMS/text
Via IM/chat (e.g. AIM, GChat)
Via Facebook or Twitter
Via another social media site (e.g. Google+, Tumblr)
Some other way
Recommendations are Evenly Divided Between Solicited and Unsolicited
While becoming aware of a specific brand
While researching various options
While preparing to purchase
44% 46%
55%
47% 44%37%
Solicited Recommendations Unsolicited Recommendations
% of solicited and unsolicited recommendations for specific purchases by purchase stage, all categories
Across All Stages, Recommendations are Most Influential in Purchases
0%10%20%30%40%
26% 28% 26%23%
17%8%14%
23% 19%17%
18%13%
% of purchases influenced by purchase stage, all cat-egories
Recommendations Advertisements (Net)Online (Net) In a Store (Net)
Recommendations
Online (NET)
In a Store (NET)
Advertisements (NET)
Nets defined as follows:
Online (Net)• Online consumer review websites • Price comparison websites• Another type of website
• Online blog • Social media site
Advertisements (Net)• A commercial on TV or the radio• An ad in a magazine, newspaper, or
online• Another type of ad
In a Store (Net)• Something I saw in a store/office• Something on a package, flyer, or
brochure
Word Of Mouth: Findings For The Telecom Sector
Telecom Sector Highlights
1. Advertisements have more influence on subscription entertainment and TV/Internet services than on any other category.
2. People more often seek advice from informed acquaintances for telecom subscription services than in any other category.
3. Rewards are effective drivers for mobile and cable subscription services, both for customers making the recommendation and for those receiving the recommendation.
Purchase are Influenced by Recommendations Much More Than Advertisements
0%10%20%30%40% 31% 34% 33%
26% 13%5%
Mobile Phone Service
% of purchases influenced by recommendations or advertisements (net) by category
0%10%20%30%40%
20% 21%19%
35%29%
13%
TV/Internet Service
0%10%20%30%40%
27%
33% 31%38%
28% 12%
Entertainment Subscription
Recommendations Advertisements (NET)
Rewards are Effective Drivers for Both Referrers and Referees
Mortgage/Line of Credit
Personal Banking
Personal Care
Apparel
Subscription Entertainment
9%
8%
8%
7%
4%
4%
3%
3%
2%
1%
…Recommender got rewarded
% of purchases influenced by recommendations where the…
Personal Banking
Cable TV/Internet
Wireless Service
Mortgage/Line of Credit
Vacation Travel
Subscription Entertainment
Personal Care
Personal Health
Consumer Electronics
Apparel
17%
15%
8%
7%
5%
4%
3%
3%
2%
1%
…Recommendee got rewarded
More People Seek Advice From Friends and Family for Subscription Services Than Any Other Category
A subscription service (e.g. phone service, TV service)
58%
25%17%
Somebody Close (Family/Friends) Distant Friend with Experience in Category
% of people likely to look for advice from different types of people for specific types of purchases
Percentage of Purchases Influenced by Recommendations
Family/Friends (NET)
Other family member
A sales person/clerk
An acquaintance
77%34%
26%22%
19%14%
3%4%
Chart Title
% of purchases influenced by recommendations given by each
Family/Friends (NET)
A friend
A sales person/clerk
A co-worker
73%38%
30%9%
27%5%4%6%
Chart Title
Family/Friends (NET)A friend
Other family memberSpouse/Partner
A co-workerA sales person/clerk
An acquaintanceSomeone else
85%49%
34%11%
15%3%2%3%
Chart Title
Research Takeaways
• Word-of-mouth recommendations are a strong driver of consumer purchase behavior at all stages of the purchase lifecycle, regardless of purchase category.
• Even though advertising has a high level of influence on consumers in the TV/Internet and subscription entertainment categories, the influence of advertising declines dramatically the closer consumers get to a purchase decision.
• Telecommunications purchases are more highly influenced by recommendations from family and friends rather than industry experts.
• Verbal referrals are significant driver of new customers.
• Your most valuable customers might be ones who refer you. Do you know who they are?
Great programs have good bones
Telecoms Shifting Focus to Retention & Smart Acquisition
2000-2008 GROWTH in wireless, prepaid sectors
2008 - Present SATURATION
Next? DEFEND MARKET POSITION
ACQUIRE THE RIGHT CUSTOMERS
WATCH OUT FOR THE NEWCOMERS!
Confidential & Proprietary Information
This is what we know*
• 5 referrals per referrer• 30 impressions per referral• 1 new customer per active referrer• Verbal referrals convert at the highest rate, followed by
targeted emails
*Aggregate results based on 10 years’ experience in the telecom industry.
“40% of purchases are influenced by a recommendation”
• Be present where your customers are. – Social networks. – Online portals.– Mobile devices.
• Catch verbal referrals.– 90% of recommendations that lead to
purchase are face-to-face.
• Give them a reason to share. – Differentiate with a meaningful and brand-appropriate thank you.
Get All Your Stakeholders Talking
Give customers and employees something to talk about.Commissioned and non-commissioned employees need
different programs.
Confidential & Proprietary Information
Use the Channels That Resonate
VerbalFacebook, TwitterLinkedInEmailPersonal URL …
Tie the Incentive to the Purchase
Incent customers to share with brand-appropriate incentives.
Motivate their friends and family to respond with product/brand-appropriate rewards.
Reward customers for opening up new business opportunities in other product lines
Keep the Fuss to a Minimum
KISS: Reduce the need for IT, Brand, Legal, and
Creative involvement.
Know What’s Going On
• Monitor program KPIs. • Watch for suspicious activity. It happens – be on top of it. • Know who your advocates. • Know the $ value of your social recommendations. • Can you Prove Social ROI? You bet ;)
Have a Question?
• Use the Chat window in GoToMeeting to submit your questions throughout the session; we have left time for Q&A at the end of the webinar
• If we don’t get to your question during the session, please send questions directly to [email protected]
Contact
Alexandra BestVP Marketing [email protected]
Connect with us! Facebook.com/RewardStream Twitter.com/RewardStream