WOM 2006;
Making word of mouth marketing happen
Friday 7th April 2006, One Whitehall Place, London
Rob Barker, Managing Partner at central attended this conference and for your information has summarised the most interesting and relevant points to healthcare marketing.
Increasing WoM importance
The conference kicked-off with some facts about how much information we get bombarded with on a daily basis. For example, The Times contains more data in one edition than a 17th century person would receive in a lifetime! The point being that with all this information we get “information anxiety” and increasingly turn to our friends and colleagues for information we trust.
It's long been established that 'colleague recommendation' has the greatest influence on physician prescribing. Information Anxiety will only accentuate its power. The graph below shows how evidence for this change can even be found in the short time period from 2001 to 2004.
Better word of mouth = increased revenue
Dr Paul Marsden of the London School of Economics talked about the American author Frederick F Reichheld who wrote The Ultimate Question - which is, by the way, “How likely is it that you would recommend this company/product to a friend or colleague?” By asking customers this question he has shown that the profitability of a company/product is directly linked to how much positive word of mouth it gets.
Dr Marsden repeated this research in the UK comparing the results of a telephone survey with a random sample of 1,256 adult consumers in the UK against the 2003 and 2004 sales data from banks, mobile phone networks, supermarkets or car manufacturers.
He found that:
- Companies enjoying higher levels of word of mouth advocacy (higher net-promoter scores), such as HSBC, Asda, Honda and O2, grew faster than their competitors in the period 2003-04.
- Companies suffering from low levels of word of mouth advocacy and high levels of negative word of mouth, such as Lloyds-TSB, Sainsbury's, Fiat and T-Mobile, grew slower than their competitors.
- A 7 per cent increase in word of mouth advocacy unlocks 1 per cent additional company growth.
- In monetary terms, for the average company in the analysis, a 1 per cent increase in word of mouth advocacy equated to £8.82m extra sales
- Companies with above average positive word of mouth and below average negative word of mouth grow four times as fast as those with below average positive word of mouth and above average negative word of mouth
All which is further evidence of the vital role that WoM plays in a brands value
How to generate positive Word of Mouth
Having established the importance of WoM Dr Marsden then gave us his thoughts on how we can encourage positive WoM. He told us that people only pass on something positive when the product surprises them. Just meeting expectations is not enough, as it doesn’t give the customer anything interesting to pass onto others (see graph opposite).
He described how some people are super conductors of WoM (i.e. Opinion Leaders or OLs) and if their expectations are exceeded they will drive rapid product uptake. In order to set their expectations and encourage positive WoM we must involve them in the process. In fact Dr Marsden has even created a formula that describes this involvement process and it’s connection to product success (shown below).
Sneak Peak + VIP Vote + The Scoop = $$
There are a few key points about this equation. Firstly, it only applies to those who value being involved early in the process, typically the opinion leaders. They love the ‘sneak peak’ at a new product and the fact they’ve got the scoop (first usage) ahead of their friends and colleagues.
Secondly, the ‘VIP vote’ (an invitation to hear customers view) must be genuine and sincere. For example, take a look at the P&G run website called Tremor (http://www.tremor.com/). This is aimed at cool kids who are fully aware they are being recruited to help develop products for P&G. However, the kids have to apply to join (they are vetted to ensure they are cool enough) and there’s a huge backlog of applicants. What’s cooler than when the next new thing comes out you can not only say you already know all about it, but that you actually helped in its development?
So what? The relevance to healthcare
All this new information got me thinking about pharmaceutical marketing. Firstly, when we create our positioning statements and disease and brand stories do we put in interesting or surprising facts to make doctors want to talk to their colleagues about it? Often not, they generally play it safe and say what people expect to hear i.e. expectations are at best met and rarely exceeded. This means there is nothing worthwhile to pass on to colleagues.
It also made me think about advisory boards. If we apply Dr Marsden’s ‘secret formula’ to the advisory boards we see that we tend to give a sneak peak, let the OLs get the scoop, but do we ever let them genuinely vote on anything? I don’t mean a literal show of hands but how often have you gone back to the OLs months after the advisory board and shown them a tangible example of how their recommendation shaped what happened to the product?
Reflecting on the congress it made me feel as though we need to look again at a number of things we have taken for granted
- Are our product stories ‘pass-on-able’? They need to be surprising and actually worth talking to a colleague about
- Do we have the ‘cool kids’ on our advisory board? Do the OLs have the right skills to give us the input we need, or are they there because they’ve always been invited?
- How do we show the OLs their input is taken seriously? We need to put more thought into what we really want a view on, focus on that specific point, and show the OLs how that links into real decisions.
By doing this we will build strong brand advocates
Please feel free to contact Rob for any more detail or with any questions / comments; rob.barker@thecentralgroup.com
For WoM to be generated customer expectations must be exceeded