For my 7th installment of the Word-of-Mouth Wisdom interview series, I am proud to interview Ed Keller. Ed serves on our Board of Directors and is an industry guru as well as a seasoned operational CEO. He has continuously added value to the Bazaarvoice team and Board, and we are constantly learning from him. He is also the founder and CEO of The Keller Fay Group, which is doing some of the most interesting work in the word of mouth field.
1. As the author of "The Influentials", former CEO of Roper, President of WOMMA, Board Director at Bazaarvoice, and CEO of your new business, why do you think the word of mouth movement is buzzing like never before?
Why now and not five years ago?
Word of mouth has always been an important factor in consumer decision making about products and services. Over the course of many decades, consumer research has shown it to be among the most important factors to consumers. However, over the past several years two major forces have aligned to make word of mouth considerably more important to consumers than it has ever been in the past, and considerably more important than other forms of consumer contact with brands. The first force is declining trust – over the past 5 or 10 years consumer trust in official sources of information has plummeted, replaced instead with rising trust in friends, family, and "people like me." The second force is the rise in technology, which enables consumers to see out peer-to-peer advice and recommendations more easily than ever before. And the more they "try it," the more they "like it." So the trend is accelerating.
2. Do you think the reason trust in official sources is plummeting is the rise of the Web? Or is some other factor, maybe sociological, at work here?
The decline in trust started with the corporate scandals of the 1990s (e.g., ENRON and others). I think the transparency that the Web facilitates provides an additional means for people learn the facts and seek out the truth about matters more quickly and thoroughly than the could in the past.
So it is an enabler and an accelerator, in my view, but not the initial impetus. History then shows that trends in trust (up or down) come in cycles, so once the trust decline starts declining it will generally take a while before it turns around the starts climbing again. The trust must be re-earned. And for some businesses, they are beginning to re-earn the trust through their word of mouth initiatives, showing they are sincerely interested in being enablers of open, honest, and beneficial consumer conversation.
3. Do you view what we do as an effective way for companies to improve trust?
The short answer is, yes. And the reason is that when companies open up and let customers express themselves in their own voice — talking both about what they like and what they don't like in order to help other customers make smart and informed decisions — it sends a message that the company values openness, transparency, and (most importantly) that it respects the consumer. All of those attributes help to build trust.
4. What are other ways that companies can earn trust via word of mouth initiatives? What are some of the best examples you have seen?
There are many ways for companies to engage in word of mouth — some of which take place through online channels while others taking place offline.
Dell's IdeaStorm is proving to be a powerful way for Dell to listen to customers, and act on their suggestions. Companies like Harley and eBay and others are creating customer communities that are very powerful way to cement customer loyalty and create advocacy. Apple earns trust and customer respect through a wide variety of initiatives, including a very powerful experience that takes place in their retail stores which generates a considerable volume of positive word of mouth for Apple (in addition to a considerable sales volume).
5. Let's talk about your new company. What are the some of the exciting word of mouth insights that you have discovered for your current clients?
My company's research involves ongoing survey research with consumers about their word of mouth conversations regarding products, services, and brands.
We monitor this on a continuous basis to help companies understand the dynamics of consumer word of mouth about their category, their brands versus the competition, and among their target consumers. Some important findings:
- By a 7 to 1 margin, consumer word of mouth about brands is positive, rather than negative. As Bazaarvoice has noted in its research about the J-curve, consumers are more interested in sharing advice and recommendations with consumers about "what works" and what they should be doing, rather than knocking down brands. This debunks a major myth about word of mouth, and should encourage companies to be more comfortable with "letting go" and inviting consumers to talk about them and their services.
- Media and marketing play a big role in stimulating consumer word of mouth. About half of all consumer word of mouth conversations about brands include a reference to some type of media or marketing. By channel, TV is the number one medium, but the Internet is very close behind reinforcing the important role that the Internet plays as a channel to drive word of mouth.
- Finally, our study proves just how ubiquitous word of mouth is. The typical American consumer engages in about 125 conversations each week about products and services, and talks about brands over 90 times per week.
That's a lot of word of mouth. In fact, our projections are that there are 3.4 billion word of mouth conversations each day in America about products/services, and 2.3 billion brand-specific conversations.
There are just a few of the many insights we have learned. But the real power of our research is to dig into the data at the category and brand level to help companies understand their strengths, and opportunities for improvement, in a word of mouth era.
6. What do you think about Wal-Mart's decision to launch customer ratings and reviews?
I think Wal-Mart's decision to offer ratings on reviews is a very significant development in the growth and development of word of mouth.
Anytime the industry leader in a category gets actively involved in something new and innovative it sends a very loud signal. And, in this case, the signal is to multiple parties:
(a) to Wal-Mart's consumers: the message is that their voice is important and that Wal-Mart wishes to listen and let them be heard;
(b) to the many manufacturers whose products will be reviewed, letting them know that Wal-Mart is serious about opening up this new and important channel of conversation; and
(c) to other retailers who have been sitting on sideline, wondering if they should engage in word of mouth or not. So this is both an important development for Wal-Mart and it's customer base, as well as for the word of mouth movement.