BrandNew Stores aims to turn fleeting pop-up shops into a chain concept, creating fixed spaces where brands can temporarily present themselves in a regular retail environment. Its first branch opened in the Dutch town of Amstelveen last month, where Alfa Romeo used the shopping mall space to present its new Alfa Mito model. It’s all about experience marketing: companies can use a BrandNew Store for a few weeks to present a product or service, or to reach out to new and existing customers without going for immediate sales.

Targeting premium retail areas where unhurried leisure-shoppers are more likely to explore a client’s offerings, BrandNew Stores will add locations in Groningen, Den Haag and Rotterdam later this year, with more cities to follow in 2010. The stores will be decked out with video screens, interactive floor projectors and other elements that make it easy for brands to present themselves.

Exclusivity has been a major element of the pop-up phenomenon, and brands have mostly limited their temporary attention-seeking abodes to major cities like London and New York. By creating a nationwide network, much of that exclusivity is lost, and the concept becomes more of a regular marketing tool. Which has its benefits: brands can reach a much wider audience, and being able to design once and then move everything to another city significantly brings down the cost per location. Since rents are still down in most malls and high street shopping areas, now’s the time to bring this to other countries.

What can you do with a Pop-Up store?

Lots of things:

How about a purpose-built Nike Tennis pop-up-shop, just 1km from Wimbledon? The store was a hub of tennis activity, featuring vibrant art installations, grass-covered signage and historic memorabilia from Nike’s past Wimbledon champions. As a pop-up shop it only existed for the 2-week duration of the tournament, after which the store returned to its original look and function as a DVD rental store.

How about a water store?

Jewelry:

Sikara & Co. Jewelry Pop-Up Store makes Union Street in San Francisco its new home as a “pop-up” shop.

“This style of store front allows us to open a temporary store in San Francisco and market test our collections as we roll them out nationally; we are very excited to be one of the first pop-up stores in the city,” said Mousumi Shaw, Founder and Creative Director.

The temporary store features globally inspired designs that fall into four collections: Indian, Italian, Mexican and Egyptian.  Limited edition pieces will also be available for the holiday, many of which are exclusive to the Union Street pop-up.  Sikara & Co. has partnered with San Francisco Stylist, Jill Siefert, as she will be helping customers most Mondays in the store with free styling tips.

As the LA Times reports, popup stores are a blessing to landlords in the current economy:

Designed to generate buzz and lure shoppers with a get-in-while-you-can appeal, pop-ups allow merchants to move quickly, opening up shops to test a new product or market, and closing them without much fuss.

Gap Inc. recently opened a pop-up shop on trendy Robertson Boulevard to promote its new premium denim line; celebrities including Halle Berry and Ashlee Simpson-Wentz turned out to the shop’s launch party. Toys R Us Inc. is setting up about 80 temporary toy shops nationwide, including several at upscale malls previously unavailable to the chain. J.C. Penney Co. touted its back-to-school offerings through interactive pop-up displays in half a dozen Southern California malls.

The pop-up phenomenon is not that new. BusinessWeek wrote about it in early 2007, giving a solid business perspective on the experiential marketing possibilities — and providing us with more inspiration along the way:

Four days. That’s how much time New Yorkers had to get a piece of the upscale design line Proenza Schouler at discount prices. On Feb. 2, the über-chic discount retail store Target popped open a store in lower Manhattan, to display this latest high-fashion-at-low-prices design line. The store then closed on Feb. 5.

In a world of BlackBerries and instant messaging, there’s a growing sense of haste in people’s lives. In response, companies trying to get consumers’ attention are trying to create a sense of urgency. For retailers, who need to get people into stores to try out their clothes, their shoes, and any other new products, the store itself is the new limited edition. So limited in fact that it may last a mere 96 hours. “There’s a certain passion about things that shout ‘act now!’ and that has transpired into the way we shop too,” says Claudine Gumbel, co-founder of Think PR, a New York fashion publicity firm.

These days, retailers are adopting the concept of a pop-up store with gusto. A pop-up store opens up at an empty retail location for a few days in a major city, or a mall, with great fanfare. And then, poof! It’s gone. In November [2006], Nike  opened a pop-up store in Soho for just four days for the sole purpose of selling 250 pairs of the Zoom LeBron IV NYC basketball shoes, named after the popular 22-year-old NBA All-Star LeBron James. The special edition shoes were priced at $250 each.

In May and June, Gap kicked off a ’60s style tour, where it used a school bus as a traveling pop-up store that made appearances in Los Angeles and New York and stopped at beaches on both coasts. Instead of seats, the bus sported shelves filled with t-shirts, flip-flops, and beach hats that people bought and paid for at a cash register near the driver’s seat. Even the stodgy giant Wal-Mart adopted the concept last April, when it showed its new fashion line Metro 7 in a Fashion Cabana in Miami’s South Beach district, open for only two days.

BUDGET BUZZ
Retailers use pop-up stores to generate buzz and excitement around a new product launch, as in the case of Target’s Proenza Schouler line. Sometimes, the stores are a great way for stores to check the pulse of consumers and try out new products. Usually, they are less costly than television ads, which can run in the millions of dollars to produce and broadcast, and the stores generate similar buzz and publicity for new brands.

Even nonretailers are giving it a try. The U.S. Potato Board, which represents American potato growers, opened a pop-up store in New York, during the week of Thanksgiving, for less than $200,000. The group, with the help of cartoon character Mr. Potato Head, promoted the message that potatoes contain more potassium than bananas as well as nutrients like folic acid and vitamin C.

Pop-up stores have worked especially well, though, for brands that don’t have a retail outlet store. Currently, the carmaker Lexus is wrapping up its multicity pop-up art gallery tour in Chicago. There, it has rented retail space to showcase three avant-garde artists—a photographer, a video movie maker, and a wood carver—whom the company feels reflect the innovation and design elements of its latest self-parking car.

For much of last year, Ford opened kiosks in several malls around the country to show off its midsize Fusion. The kiosks, labeled Fusion Studio D, were targeted at women, and offered makeovers, fitness training, and health information. The kiosks would pop up in malls in cities around the country, just days before the local Susan G. Komen Foundation’s Race for the Cure, and signed up people who wanted to run to cure breast cancer.

LOOKING FOR KICKS
Of course, it’s not easy to set up a pop-up store [which is why the notion of a store network is so appealing]. Unoccupied stores in hot retail locations aren’t easy to come by [2009 update: more available now]. Moreover, they can backfire, if a retailer doesn’t staff the store with some of the best customer service personnel, who know enough about the brand. “We had to make sure there were people who live and breathe Florida to explain what they were missing,” says Nicki Grossman, chief executive of the Greater Fort Lauderdale Convention & Visitors Bureau, which set up a pop-up store—complete with sandy beaches, a golf putting hole, lifeguards, and beach beauties—in January in New York.

No wonder companies feel the pressure not only to be cool, but to offer visitors an additional kick. For instance, when electronics company JVC opened its pop-up store, it offered karaoke and let people film themselves using its newly launched video camera and make their own DVDs, which folks could then carry home as gifts. And sneaker maker Fila let people draw their own designs on a computer, which they printed on a T-shirt that shoppers could take home with them for free. “You had the sense that you are creating artwork and you are really engaging the consumer, which is the most important part,” says Gumbel of Think PR.

Retailers have clearly discovered that pop-up stores bring brands to life and let people sample products in a great format, without much cost. “Try getting that from a 30-second ad,” says Claudia Strauss, president of Lime PR, in New York.

Uniqlo, the hip Japanese retailer of casual wear, took the pop-up format to a new level late in the runup to the November 2006 opening of its New York store. To announce its arrival, it drove two shipping containers into the city and used them as stores that “popped up” in various locations over eight weeks to show off the company’s apparel:

Pop-up stores — coming to an empty location near you. Are you up for it?

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According to Pat, these are the five key questions that have been known to pop up in discussion with CEOs/CFOs, often short-circuiting otherwise brilliant marketing careers.

1. What are the specific goals for our marketing spending, and how should we expect to connect that spending to incremental revenue and/or margins?
2. What would be the short and long-term impacts on revenue and margins if we spent 20% more/less on marketing overall in the next 12 months?
3. Compared to relevant benchmarks (historical, competitive, and marketplace), how effective are we at transforming marketing investments into profit growth?
4. What are appropriate targets for improving our marketing leverage ($’s of profit per $ of marketing spend) in the next 1/3/5 year horizons, and what key initiatives are we counting on to get us there?
5. What are the priority questions we need to answer to inform our knowledge of the payback on marketing investments – and what are we doing to close those knowledge gaps?

How you answer these five questions will get you promoted, fired, or worse — marginalized.

So what should you do?

Pat provides specific, actionable, accountable recommendations.

If you’re a marketer, this is a must-read.

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1. Marketing In The Era of Accountability In 1980, the UK’s esteemed Institute of Practitioners in Advertising...

On the not-so-bright side, Australia’s Brisbane Times reports on the aftermath:

The Best Job in the World marketing campaign for Tourism Queensland won the top newspaper advertising award at the weekend, confirming its status as the most awarded ad of the year globally.

Judges at the Caxton Newspaper Awards nominated the ad best in show, handing it the prestigious Quinlivan Black Award for the best newspaper ad of the year.

This brings to almost 40 the number of national and international awards won by the campaign, including three Grands Prix at Cannes, the Oscars of the ad industry, leading the agency behind the idea to claim that it could be the most awarded ad of all time.

The advertising idea of seeking a person to act as caretaker to the islands of the Great Barrier Reef for six months began its journey as a simple classified ad that ran in newspapers around the world. More than 40,000 media stories later it continues to resonate around the world.

Although it put the islands, and arguably Queensland, on the international tourism map, the Brisbane-based agency that came up with the idea, Sapient Nitro, no longer works for Tourism Queensland.

Instead, the state tourism authority handed its multimillion-dollar advertising account to another agency, which has since created a campaign centred on a take-off of the Monkees – complete with a reworked theme tune, Hey Hey It’s Queensland, which has been widely lambasted by the industry.

The irony was not lost on the audience at the Caxtons, who pondered aloud why the same client who bought a campaign that delivered it publicity worth $300 million on a budget of $1.7 million could also commission the latest campaign.

Indeed. Life’s a pitch. Sometimes you win.

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Alas, hard-hearted researchers have poured icy cold water on that romanticised notion. In a very useful article in AdWeek, Harry Balzer, The NPD Group’s vice president and chief industry analyst, observes that:

Americans have been microwaving their way through the recession. Use of the actual stove — i.e., the kitchen instrument that cooks food as opposed to merely thawing it out and warming it up — has fallen to new lows. “Americans are eating in their homes,” he says, “but they’re microwaving, not cooking.” He adds that the increase in microwaving “was entirely in frozen foods” and not in any use that would qualify for the term “cooking.” Microwaving had been flat for the previous 20 years, but it surged last year as the recession prompted consumers to shift from takeout foods to less-expensive microwaveable products — say, frozen pizza rather than pizzeria pizza.

If you were considering developing new products such as baking ingredients, to take advantage of the perceived move back to warm and fuzzy traditional home values, forget it. If it can be reheated, it’s a contender. Otherwise not.

The AdWeek article also notes that:

If Americans were looking to food for comfort in the past year, it was more likely to be in the form of a snack and a beer than a slow-cooked pot roast. A recent Mintel report pointed to potato chips as a category that has performed well in the past year after having been flat earlier in the decade. Mintel senior analyst Bill Patterson notes some other categories that have fared well during the economic downturn. “Comfort-type foods that have benefited include pancake mixes, eggs, butter/margarine, salty snacks, beer, cream and creamers and sweet spreads,” he says.

Health is out of favor as well

As The NPD Group puts it, healthier eating has been “one of the big casualties” of the recession. Price is an obvious factor, since, as Balzer notes, healthier foods tend to be more expensive. In any case, consumers’ oft-proclaimed intention to pursue a healthier diet could be fragile. “I think they want to eat healthier, but they don’t,” he says, adding an allusion to an Eddie Vedder lyric that says we “change by not changing.” And consumers sometimes make do with a pinched sense of what constitutes healthy eating. “We eat healthier versions of a food we shouldn’t be eating at all,” says Balzer. And even that limited step fell victim to the recession, as supermarket shoppers focused more intently on price.

On a brighter note, market researchers Synovate have found that new products are still important in the food business. “Brands need to stress innovation. With many consumers thinking about price/value, marketers have to create impactful innovation more than ever.” That dovetails with Balzer’s observation that the downturn has not squelched consumers’ interest in innovation in supermarket goods. “I don’t think the recession has stopped us from wanting new and novel things,” says Balzer, even if the bad economy has led marketers to cut back on new-product launches.

Worth reading the full article at AdWeek.

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• A better understanding of the crucial role advertising plays in marketing;
• Closer analysis of advertising effectiveness and improved methods of evaluation;
• A clear demonstration that advertising can be proven to work, against measurable criteria.

More than a quarter of a century later, the IPA has amassed a veritable goldmine of information, more than 1000 case studies of the UK’s most effective advertising over the last 25 years.

One could simply let that information accumulate in dusty cabinets, a legacy for future archaeologists to argue over. However the IPA has instead chosen to conduct a meta-analysis of the results, perhaps the largest of its kind ever undertaken.

The study – whose results are captured in the 128-page publication “Marketing In The Era Of Accountability” by Les Binet and Peter Field (World Advertising Research Center, Henley-on-Thames, 2007) – not only reveals some of the factors that make marketing profitable, but also exposes some common practices and beliefs that lead to waste and inefficiency.

The Executive Summary spells out many of the key findings:

• Contrary to received wisdom, focusing on a single campaign objective does not make marketing more effective. Objectives should be detailed and above all prioritized.
• Marketers pay too much attention to intermediate attitudinal measures and too little to business and behavioural outcomes.
• When marketers do focus on business measures, they focus on the wrong ones: sales rather than market share and volume rather than value.
• Marketers focus on the wrong behavioural outcomes too. Most campaigns aim to increase loyalty, but increasing penetration is far more effective and profitable.
• The drive for accountability leads marketers to focus on a narrow range of intermediate Key Performance Indicators (KPIs), particularly awareness and direct responses. However there is no single measure that reliably predicts effectiveness, and focusing on individual metrics actually reduces effectiveness.
• This raises questions about the reliability of pre-testing. The data suggests that pre-testing may even reduce effectiveness.
• The need for accountability often makes marketers focus on rational product messages. In fact, emotional campaigns are more powerful, even in “rational” categories.
• Marketers often focus on absolute levels of spend or advertising-to-sales ratios when setting budgets. In fact share of voice is a better KPI (and the report outlines a detailed method for setting budget based in this measure).
• There is little evidence to support the widespread assumption that TV is becoming less effective. In fact, TV effectiveness may be increasing.
• On the other hand, the fashion for “surround sound” in media may be less than ideal. Integration is good, but more channels is not always a better idea.
• Marketing needs to focus more on profit and less on Return On Investment (ROI). Much talk of ROI is confused and some of it leads to poor business decisions. The use of ROI as a ratio can be dangerous in the marketing context and so a better alternative is proposed in this publication.

Many of the problems noted in the report can be traced back to a tension between effectiveness (doing the right thing) and accountability (being seen to do the right thing). “Marketing In The Era Of Accountability” investigates this conflict and attempts to reconcile it by making specific recommendations for best practice in marketing.

For a comprehensive study of marketing effectiveness in action, supported by twenty-five years of real-world results, check out “Marketing In The Era Of Accountability”, available from the World Advertising Research Center at www.WARC.com.

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A group of you are chattering away (in the kitchen, naturally) when someone you don’t know sidles over. He interrupts a fascinating line of discussion to introduce himself – Tom – and within 30 seconds you know that Tom works in real estate. Or maybe he sells used cars or insurance. Thirty seconds more and he’s telling everyone his personal views on the best deals he can get, just for you. You move away quickly, scarcely bothering to remain polite. “Who invited that jerk?” you mutter to anyone who will listen.

Now you know how Facebookers felt when founder Mark Zuckerberg suddenly opened the doors of his magic kingdom to hustlers, peddlers, gypsies, tramps, thieves and admen last November via Facebook Beacon, an ill-conceived application that trampled on users’ right to privacy in the quest for marketing revenues. Cue consumer revolt and hasty corporate backstep.

The Facebook example is noteworthy because the site is one of today’s Web 2.0 poster children, enabling consumers to connect with each other easily – and at no cost. The implicit tradeoff – free services, in return for permission to market to users – turned out to be a one-way transaction. Permission wasn’t to be presumed, after all – and that pretty much sums up the issue with which marketers need to wrestle in this 2.0 world.

The Web 2.0 term itself was coined in late 2004 by one Dale Dougherty, O’Reilly Media executive, to proclaim a fresh new life for the web, arising phoenix-like from the ashes of the dot-com flameout of 2001. That initial label made sense in the context of the times, but the concept was quickly co-opted to define a whole new breed of products and services – bigger, faster, stronger. If Web 1.0 was all about providing information (one to many), Web 2.0 has become defined by interaction (one to one and/or many to many). I am consumer, hear me roar, in numbers too big to ignore.

There are many different views today as to what constitutes Web 2.0. For the purposes of these musings, we’ll confine ourselves to talking about the topic as it pertains to (a) user-to-user connectivity through the likes of social networks, instant messaging and discussion forums; and (b) user-generated content such as blogs, wikis and rating & tagging services (eg product reviews, digg, del.icio.us).

User-To-User Connectivity: Here Be Dragons

Sorry to be the bearer of bad tidings, but when users are talking amongst themselves, they don’t particularly want to hear from you (or from any other marketers). Unfortunately, wherever people gather, the Toms of this world aren’t far behind, shamelessly flogging their wares and looking to make a quick buck. Such blatant opportunism – and appalling manners – has queered the pitch for all of us.

Bob Liodice, CEO of the US Association of National Advertisers, described as last year’s most important marketing transformation that “Marketers will abandon their historic ‘command and control’ model of brand building in favour of a truly interactive dialogue with consumers.”

It’s a good thought, but it’s not quite as easy as that. Consumers don’t often want to dialogue with us marketers, except on their own terms, at times of their own choosing. And they really, really don’t want to be interrupted or ambushed by intrusive advertising. Save it for the old media.

So how should marketers behave in social environments such as Facebook or its competitors?

Same party, different attitude. Tom joins your little group, but this time he listens to the war stories being told. He may venture a comment or two based on what’s just been said, but he stays on topic and doesn’t try to hijack the conversation or flog his particular hobby horse. Eventually someone will ask Tom what he does. Says he’s in real estate, doesn’t go overboard. Those of you who could use some specialist knowledge toss a few questions at Tom, to which he responds graciously, giving out free advice that’s useful and not self-serving. You ask Tom for his card. Whatever business may arise out of the chitchat can be transacted later, in a much more appropriate environment.

The required behaviour for marketers in online discussions is both straightforward and timeless, regardless of the fancy new technologies involved. In fact, it’s difficult to go past the advice offered by the legendary newspaper columnist Emily Post (the Oprah Winfrey of her day) in her 1922 “Etiquette” classic guidebook: “Ideal conversation should be a matter of equal give and take, but too often it is all ‘take’. Above all, stop and think what you are saying! This is really the first, last and only rule. If you ‘stop’ you can’t chatter or expound or flounder ceaselessly, and if you ‘think’, you will find a topic and a manner of presenting your topic so that your neighbour will be interested rather than long-suffering.”

Say no more.

User-Generated Content: Talking The Walk

If you’re a marketer, what’s worse than not being talked about? Being talked about in a less than flattering manner. And if there’s one thing that Web 2.0 technologies do supremely well, it’s enabling consumers to do as much talking as they want.

Until recently, disgruntled consumers had few outlets to express their grunt. Letters to newspaper editors would make it to the printed page only for truly significant issues. Perhaps chatshow radio would air the issues – until the host cut the discussion short for a commercial break or an upcoming news bulletin. Beyond such resource-limited possibilities, picketing outside the offending company’s premises was about all that was left for the grumpy and dissatisfied.

If your customers want to talk about you today, it’s dead easy. All they have to do is whip over to WordPress.com and set up a blog. Or twitter mercilessly. Or post a rant on YouTube. Or flame you on your own product pages on Amazon. Or just tell all their friends by email, IM or via the social network du jour.

There’s an old saying that happy customers tell two people while unhappy customers tell ten about their woes. That mathematics just got blown out of the water by the exponential power of today’s tattletale-ing tools. Case in point: blogger Jeff Jarvis achieved fame far beyond the blogosphere as a result of a series of blogs (now collectively known as “Dell Hell”) which began on June 21 2005 thus:

“Dell lies. Dell sucks. I just got a new Dell laptop and paid a fortune for the four-year, in-home service. The machine is a lemon and the service is a lie.”

(Read the rest of the original post and prepare to cringe).

Google “Jeff Jarvis” and “Dell Hell” and you’ll note 5,660 results. Google “Dell Hell” on its own and watch the number of mentions climb to 42,500. A few more than ten.

What’s at stake? Not just bad publicity. A 2005 analysis by the London School of Economics and Political Science (LSE) and The Listening Company found that both word of mouth advocacy and negative word of mouth were statistically significant predictors of annual sales growth:

• Companies enjoying higher levels of word of mouth advocacy, 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 more slowly than their competitors.

Overall, the LSE study concluded that 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.

The LSE report identified eight distinct techniques for optimising word of mouth advocacy:

GROWTH BY ADVOCACY TOOL #1: REFERRAL PROGRAMS
The most elementary solution for optimizing customer advocacy levels is to put in place a referral program that rewards existing costumers for recommending new customers. Also known as customer-get-customer, introduce-a-friend or member-get-member schemes, referral programs offer cash or gift incentives to satisfied customers who become word of mouth advocates.

Whilst such initiatives are typically associated with subscription services, such as the original ‘Friends and Family’ referral scheme for US telephone operator MCI in 1991 that generated 10 million new subscribers in less than two years, referral programs can also work for consumer packaged goods. For example, Unilever ran an effective referral program in 1998 for its Dove soap brand. The scheme involved allowing existing Dove users to order a free Dove gift pack of soap and vouchers for a nominated friend, in return for which they too would receive a Dove gift pack.

Psychologically, rewarding both the referrer for referring and the ‘referree’ for being referred was powerful because it gave the referrer an excuse to refer not based on self-interest. In terms of stimulating growth, this ‘Share-a-Secret’ referral program as it was known was a success – contributing to a 10% increase in Dove’s market share.

GROWTH BY ADVOCACY TOOL #2: ‘TRYVERTISING’
A relatively new marketing term, ‘tryvertising’ (a combination of ‘try’ or ‘trial’ and ‘advertising’) is a twist on product sampling. The idea is that rather than provide free samples or trials to anyone in a target market, tryvertising involves sampling on a selective and exclusive basis to lead users – ideally with new products or services before they become widely available. The goal is to both remove the price barrier to trial, and to use exclusivity and scarcity to turn the ‘privileged’ trial participants into advocates who then showcase the innovation to others. In the technology sector, this is the hard-nosed commercial principle behind ‘beta-testing’, turning lead customers into advocates by giving them sneak peeks of new yet-to-belaunched products.

Fashion brands also use tryvertising initiatives to drive growth by inviting trendsetters to participate in exclusive trials. For example, the BCBG fashion brand recently ran a successful tryvertising campaign to launch their new fragrance BCBGirl. The campaign involved sending teen trendsetters a pre-launch bottle of the perfume, along with 100 samples each to share with their friends. In cities where this advocacy-by-tryvertising initiative was run, BCBGirl shot to the bestselling spot on the week of its launch.

GROWTH BY ADVOCACY TOOL #3: EMPOWERERED INVOLVEMENT
Empowering clients, customers and consumers to call the shots on new packaging, advertising, or even new products and services, is an advocacy generating tool that harnesses a powerful psychological phenomenon known as the Hawthorne Effect. The Hawthorne Effect, named after Western Electric’s production facility in Hawthorne, near Chicago, where the effect was first identified by researchers at Harvard in the 1930s, turns market research participants into advocates by making them feel they have had a say in how a product, service or initiative is rolled out. In plain English, the Hawthorne Effect is simply the “I did that” effect, the consequence of being asked one’s opinion and seeing it acted upon. Think Big Brother/American Idol where audience participation empowers viewers to vote participants off the show.

The Hollywood studio DreamworksSKG uses empowered involvement to create word of mouth advocates, and recently doubled teen attendance for a movie by allowing its target audience to vote on and choose the title of the movie in a web poll. Web polls, SMS votes and other innovations in personal communications technology mean that empowered involvement has become a fast, scalable and cost-effective solution for creating advocacy – and thereby stimulating growth. For example, Procter & Gamble use online voting to give consumers the final say in which new product variants should be launched, such as new flavours in the Crest toothpaste range.

The impact on growth of such advocacy-by-empowerment initiatives appears to be impressive: Crayola, the crayon brand, reported a jump in sales when they allowed consumers to vote on the name of new crayon colours, whilst Tremor, an online US-wide customer empowerment panel with some 250,000 members set up in 2001 and working with brands such as Sony, AOL, Toyota estimates the sales uplift effect of empowered involvement initiatives to be 10-30%.

GROWTH BY ADVOCACY TOOL #4: BRAND AMBASSADOR PROGRAMS
A fourth way of transforming customers into advocates is to invite highly valued and satisfied customers to become brand ambassadors. Brand Ambassador Programs work by giving chosen customers special privileges both for themselves and to share with their friends. These privileges may include exclusive offers, special invites, and sneak peeks of new products or inside scoops of brand news. The idea is to give the Brand Ambassador materials that help them promote the brand. For example, L’Oreal, O’Neill, Siemens and Unilever all run Brand Ambassador Programs that involve providing brand fans with their own sets of personal contact cards featuring brand artwork on one side and personal contact details on the other. As well as making Brand Ambassadors feel like privileged ‘insiders’, part of the brand family, the cards can contain a special privilege code – allowing them to share exclusive promotions with their friends and colleagues.

GROWTH BY ADVOCACY TOOL #5: CAUSAL CAMPAIGNS
A fifth tool for unlocking growth by customer advocacy is to adopt a good cause as a strategic positioning and marketing tool that appeals to existing and target buyers. Adopting a good cause not only increases sales directly by providing an additional ‘reason to choose’, such as Nike’s sponsorship in 2004 of the Lance Armstrong Foundation for cancer research and education, but also gives existing buyers a compelling ‘reason to recommend’. The impact on sales can be dramatic.

For example, when Persil paired with Comic Relief, sales increased by 13%, and when BT partnered ChildLine, signups for its new voicemail service increased 25%. In the US, when American Express pledged to donate a penny to the restoration of the Statue of Liberty for every transaction made by its cardholders, use of American Express cards in the US increased by 28% and new users increased by 17%. By sponsoring a good cause, businesses can mobilize their customers and create a volunteer sales force with a compelling motive to evangelize.

GROWTH BY ADVOCACY TOOL #6: INFLUENCER OUTREACH
Not so much a tool per se as a strategic approach to targeting, where instead of targeting the mass majority directly, the focus is on influencing the influencers – who then influence the majority by word of mouth.

Influencers, the preferred label today for ‘opinion leaders’, are the 10% of any target market who frequently offer and are elicited for category-related advice by friends and colleagues. They are the friends and colleagues we turn to for advice when choosing a new product or service.

As a group, influencers/opinion leaders were first identified in the 1940s in a landmark study by Columbia University on media influence. The study found that most people were relatively immune to direct mass media influence, but were influenced indirectly by people they knew and whose opinion they trusted. These influencers were dubbed ‘opinion leaders’ – and it was subsequently found that these opinion leaders, unlike the mass majority, were influenced by the mass media and other marketing initiatives. Thus was coined the term ‘two-step flow’ of influence – influence the influencers who then influence the masses by word of mouth.

Influencer outreach programs involve identifying influencers in a target market (using influencer screeners), and then engaging them with tools from the advocacy toolbox to transform them into word of mouth advocates. For example, 3M targeted influencers for its Post-It Notes brand; 3M invited secretaries to CEOs to have a say in how the product should be commercialized, and in doing so created an army of influential word of mouth advocates. After a failed mass market launch, 3M’s influencer outreach program turned around a doomed product with languishing sales, and through word of mouth advocacy made it America’s 5th largest selling office-supply product.

GROWTH BY ADVOCACY TOOL #7: ADVOCACY TRACKING
By monitoring advocacy levels through the Net Promoter Score [a measure of those who would recommend your product to their friends] for products, services and customer-facing departments, businesses can identify what they are doing right and where there is room for improvement.

For instance, Enterprise Rent-A-Car tracks net-promoter scores across its 5,000 plus branch network in the US. Using a simple customer feedback form, the business identifies high performing and high improvement outlets, learns from what they are doing right, and can focus resources on problem branches. To underline its commitment to customer advocacy, Enterprise Rent-A-Car links compensation and staff promotion to advocacy rates. Other brands, including the Siemens Mobile, run online advocacy trackers to track word of mouth, positive and negative, in forums, blogs, and consumer review sites, using the tracker as a diagnostic tool for product enhancement, innovation and as a planning tool for future marketing campaigns.

Apple, tracking early word of mouth for its iPod digital music player, picked up negative buzz around the product’s battery that was difficult and costly to replace. The problem was quickly amplified when a couple of disgruntled iPod owners made a video clip called ‘iPod’s Dirty Secret’ and posted it on the Internet where it was seen 1.4 million times. By listening to the bad buzz and by acting upon it – correcting the product weakness through innovation – Apple was able to avert a major PR disaster.

GROWTH BY ADVOCACY TOOL #8: INNOVATION
Ultimately, clients, customers and consumers will recommend a product or service when it is worth recommending. No amount of advertising hype or spin is likely to generate sustainable advocacy; Just as advertising works when you have something worth advertising, advocacy will drive growth when you have something worth advocating. This means that the key to driving growth through advocacy is innovation.

Using the psychology of word of mouth provides a useful handle on how to innovate advocacy-worthy products and services. The key here is to have a product or service that delivers an experience that exceeds expectations because we only tend talk about things that are at odds with our expectations. In other words, product-talk is triggered when the product either exceeds or falls short of expectations.

In practice, what this means is that driving growth through advocacy means identifying the expectation-priorities of a target market – as opposed to needs or satisfaction – and delivering experiences that exceed those expectations.

By identifying where customer expectations can be profitably exceeded, and then by focusing new product or service development in these areas, businesses have the opportunity to hardwire customer advocacy into innovation.

Making Web 2.0 Work For You

You can’t stop people talking. But you can listen. And you can respond thoughtfully, taking note of their concerns. And move to fix the problem, fast. Because if the situation has reached the point that people are blogging negatively about you, it’s not just your marketers who are behaving badly.

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