• June 17, 2009
  • By Jeff Zabin, vice president and research fellow, Aberdeen Group

The Network Effect of Word of Mouth

Twentieth Century Fox, the studio that owns the blockbuster "X-Men" film franchise, was alarmed to discover in early April 2009 that someone had stolen and posted onto the Internet a rough cut of the latest installment, X-Men Origins: Wolverine. [The film's official Web site is here.] The pirated digital file spread rapidly and was soon available for free (and illegal) download from hundreds of Web sites.

Of course, Hollywood's most-effective marketing tool — albeit one over which it has never had direct control — has always consisted of one simple question: "Seen any good movies lately?"

Reviews can have an enormous impact on how well a movie performs. Movie producers (along with their marketing peers in other industries) refer to this phenomenon as word of mouth — much of which today takes place online: in blogs, discussion forums, and peer-to-peer social networks.

So what happens to potential box-office earnings if people see a movie leaked to the Internet in an unfinished form? Negative buzz based solely on technical shortcomings — a lack of finished special effects, an incomplete sound mix — could doom the movie's prospects before it even has a chance to leave the starting gate. Fortunately for Twentieth Century Fox, the online buzz over the pirated edition was mostly positive, and actually helped spur theatrical viewings upon the movie's official release. (According to BoxOfficeMojo.com, the film booked $85 million in ticket sales in its opening weekend, and had topped $175 million by early June.)

With the rise of social media, the speed and reach of word of mouth — with respect not just to movies but to every consumer product and service under the sun — is increasing by orders of magnitude. At the same time, a growing number of companies are deploying technology-enabled solutions for leveraging word of mouth as a way to increase return on marketing investment. It's no wonder that, according to recent Aberdeen research, more than two-thirds of best-in-class companies are increasing their spending on social media marketing.

Building brand visibility and market awareness by turning consumers into advocates is certainly one good reason to launch a social media marketing program. The "network effect" of word of mouth can deliver ever-increasing value at little or no incremental cost.

That, at least, is the thinking at Symantec, which now ranks as one of the 10 largest software companies in the world. Like many other major companies, Symantec has begun to dabble in social media — and, in fact, its corporate Web site now boasts a section called the Social Media Center, which includes links to dozens of company blogs, podcasts, and videos. While rich in content, the section provides no indication of the innovative approach that Symantec has recently adopted to influence the consumer-generated content that resides on other Web sites. "The idea of ‘build it and they shall come' doesn't work," says Diane Beaudet, Symantec's senior director of user-engagement programs. "You need to take your message to the people."

That's exactly what Symantec started to do early last year when it adopted an on-demand platform from San Carlos, Calif.–based Zuberance that enables satisfied customers to automate the process of disseminating product reviews. In essence, the platform allows people to insert their reviews contextually in the exact Web pages where Symantec product descriptions and user ratings reside on e-commerce and other Web sites.

Symantec uses a "likelihood to recommend" survey to identify loyal customers who might be interested in serving as word-of-mouth evangelists. The company invites those who qualify to join a new program, dubbed Norton Brand Advocates (NBA). Today the NBA program boasts 7,000 customer advocates, with an additional 28,000 waiting in the wings.

"You have to provide for brands a high level of analytics, management, and reporting in order to turn advocacy into a real business tool," says Rob Fuggetta, chief executive officer of Zuberance. For its part, Zuberance provides an executive dashboard that tracks how many advocates have joined the community, how many have created content, and how many have chosen to push that content for publication to Web sites.

The initial goals for the NBA program centered on mobilizing a certain number of customer advocates, with specific metrics tied to the number of reviews that were published. The larger goal was to move average review ratings up a notch or two even in advance of this year's new-product releases. According to Beaudet, the goals were easily attained. Within the first two months, she says, the program improved "star" ratings of the company's products on Amazon.com by more than one star.

What's the value of a higher recommendation? While there seems to be a strong correlation between star ratings and sales volume, the specifics of the correlation are still being figured out. Symantec is working with the sales team that manages its Amazon.com and CNET relationships to get an answer. Meanwhile, the company understands the value of advocacy in terms of new-customer acquisition, revenues, and profitability, and, according to Beaudet, has adopted an approach of "let's refine it as we go."

About the Author
Jeff Zabin is a vice president and research fellow at Aberdeen Group. He can be reached at jeff.zabin@aberdeen.com.

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For the rest of the June 2009 issue of CRM magazine — The Social Media Issue — please click here.

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