The Power of “Free” to Spark Word of Mouth - Ed Keller - MediaBizBloggers

A recent study by the consulting firm of A.T. Kearny stimulated a lot of commentary by people I follow on Twitter, Facebook, etc. Entitled “Socially Awkward Media,” the study finds that despite the growing presence of marketers on Facebook and other social networking sites, most are not yet engaging with consumers very well. “Traditional marketers are so bad at understanding social networks that many have all the confidence of awkward teenagers at their first school dance. They’re just not connecting.”

One statistic that caught my attention is that, “only 5 percent of company-to-consumer posts engaged consumers in discussions, while 71 percent of posts were promotional—offering discount coupons, free prizes or other amenities.” Why should this be, and does it reflect short sightedness (or immaturity, as Kearny might say) on the part of the brands in terms of the way they engage with consumer?

While it is undoubtedly a mistake for brands not to engage in more consumer-to-consumer posts, and to be fearful of open communications and dialogue, it is not a mistake to use social networking for promotional offers. Why? The Kearny study gives one answer—people like promotions and want to share them with others. “Promotional posts are popular, as they received the most “likes”—423,000, or 75 percent of all such posts. Informative posts were the least effective, as we tracked just 283 “likes” for these posts and they tended to draw the fewest comments.”

The power of promotions to drive conversation can be seen clearly in Keller Fay’s TalkTrack® research, which looks not only at posts on Facebook and Twitter, but at all word of mouth, both offline as well as online. We have learned from TalkTrack that media and marketing are a major force in sparking consumer conversation about brands. In fact, nearly half of all conversations consumers have include an explicit reference to some type of marketing activity.

On an aggregate basis across all brands in all categories, promotions (coupons, product samples, etc.) are the fourth biggest driver of consumer word of mouth, following just TV, the internet, and point of sale activity. Almost 1 in 10 conversations include an explicit reference to promotions— which projects to 127 million conversations per day that are sparked by promotional activity.

Digging down deeper, we find that in certain categories promotions are the #1 driver of word of mouth, beating out all other forms of media/marketing, including both TV and the internet. These include conversations about brands in personal care/beauty, food/dining, and household products. For others, such as retail and beverages, promotions are #2.

These conversations that are sparked by promotional activity have a lot to recommend them from a brand perspective. While most brand-related word of mouth tends to be far more positive (66%) than negative (8%), word of mouth that references promotions is the most positive (73%) and the least negative (6%) of any form of media/marketing. And maybe even more importantly, 61% of all conversations that include references to promotions result in people being very likely to buy as a result of that conversation—well above the norm and, once again, #1 in terms of all forms of media/marketing that drive word of mouth.

This should not come as a surprise. For decades consumers have been literally sharing coupons with each other, in “coupon swap clubs” at the local community center or library. We now have the online equivalent with “promo codes” widely available and shared online.

Consumers have always been drawn to “deals.” In today’s difficult economic climate, especially, they want to share information (online and offline) about where to get the best value for their dollar. After all, helping and sharing are big motivations behind word of mouth in the first place. Marketers can have reasonable debates about whether promotions are good or bad for building long-term brand equity, but there’s no question that consumers “like” them, and want to share them throughout their social networks. For the marketer, it’s an opportunity not only to achieve new brand trials from friends and family, but to do so with a personal endorsement attached to it.

Ed Keller, CEO of the Keller Fay Group, has been called "one of the most recognized names in word of mouth." The publication of Keller's book,The Influentials, has been called the "seminal moment in the development of word of mouth." Ed can be contacted at ekeller@kellerfay.com.

Read all Ed’s MediaBizBloggers commentaries at WOM Matters.

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