Where is the Puck?

Emerging e-Marketing Trends in 2011:

1. Online shopping
2. Social Networking
3. Viral marketing / Word of Mouse
4. Social Shopping
5. Web 3.0
6. M-Commerce
7. The rise of App culture
8. e-Commerce Videos
9. Expansion of virtual goods and currencies
10. Internet and Mobile Advertising

The traditonal research suggest that WOM is the primary factor behind 20 to 50 percent of all purchasing decisions. The rise of online communities and communication has dramatically increased the potential of word of mouth (“word of mouse”). As I am doing my reseaerch on Viral Marketing and word of mouth, I have found several descriptions and calculations of customer life time value and his/her referral value, etc. However, I have not found a simple formula to calculate word of mouth equity yet. So, here is my attempt. I hope you fill find this formula useful and easy to use.

Word of Mouth (WOM) equity = C * p * r * i * M

C = actual number of your company’s customers (for any given product, product category or brand)
p = percentage of your customers who talk about company’s product to their friends (“evangelists”)
r = average number of recommendations given by your “evangelist”
i = influence factor: average probability that the potential customer will act on recommendations and buy the product
M = average profit (contribution margin) for any given product, product category or brand during certain period of time

Suppose your company is providing services and it has 2000 customers (C). Ten percent of your customers actually talk to their friends and recommend your services (p). In average , they (your “evangelists”) will talk to three of their friends (r). However, only 20% (i) of those recommendations will result in new profits (margin – M) averaging $5,000 over certain period of time. So your WOM equity is:

WOM equity = C * p * r * i * M = 2000 * 10% * 3 * 20% * $5,000 = $600,000

This is how much additional business you get just based on word of mouth referrals!

The next step would be to try to manage and maximixe your word of mouth by encouraging more customers (“p”) to talk to more of their friends (“r”) in more effective and more enthusiastic way (“i”) . How? The simplest answer: by creating the wow! factor. By GIVING them more value than they EXPECT.

More complex formula for calculating the WOM equity will follow on this blog.. The formula will take into consideration the possible negative effects of word of mouth, as well as the customer life time value.

Do you or any of your friends work in the food and beverage industry (dairy products, meat industry, confectionery industry, alcohol, water, juices, milling industry)? I am working on my PhD thesis (on “Viral Marketing”), and I am looking for people who have business experience in the food industry to answer my survey…

The survey link is below. Answering the survey takes app. 20-30 minutes (note that some questions are optional).

http://www.surveymonkey.com/s/PhDSurvey2

All survey participants will receive my coming e-book on Viral Marketing and up to one hour of marketing / Internet marketing consulting by phone or e-mail at no charge.

Thanks!
Ivan
isurjano@capilanou.ca

Remember my post on digital furniture and Microsoft’s product “Microsoft Surface?” Well, here is another similar technology, it is called “TouchTable”! It works like a giant iPhone…

2011 Consumer Trends Forecast by Trend Hunter:

1. Discrete consumerism (consumers shying away from big brand names)
2. Tweetonomics (more businesses utilizing the power of twitter/social media to steal the customers)
3. Perpetual adaptation (ever-evolving aesthetics without affecting the functionality; consumers in love of change itself)
4. Geriatric Couture (modernizing the grand parents’ fashion style)
5. Luxury lives on (capitalizing on existing upper-class consumer needs)
6. Modern Kidvertising (children’s campaigns appealing to adult interests)
7. Rockstar Self-Expressionism (rebellious product/brand design)
8. Democratic Selling (consumers voting power affecting product design and price)
9. Toddler Touchscreens (interactive film apps, pillow tech and interactive fairytales…)
10. Hyperrealism (rebelling against photoshopped perfection)
11. Tangible Printing (3D printing on shoes, cloting, etc.)
12. Next Besting (consumers pursuit of the next best alternative)
13. Modern Cubism (Cubed lighting, architecture, seating…)
14. Real timing (businesses incorporating Foursquare, Twitter and live streaming to provide instant gratification)
15. On the Spot Style (street/”real” style fashion)
16. Brand reversion (brands going retro to satisfy childhood nostalgia)
17. Wearable Tech (earring telephones, holographic wristwear…)
18. Charitable Deviance (charities using shock tactics)
19. Interactive Retail (interactive shopping bags, iPad menus…)
20. Projected publicity (projected billboards)

Here is one more example of SCENT MARKETING discussed also earlier in this blog: Ford wants every car it makes to look, feel and even SMELL like a Ford!Their goal is to create a scent that “produces a sense of well-being inside a Ford,” says Derrick Kuzak, group vice president for global product development… Read more on Forbes.com

Social Advertising or Social Marketing in the new Web 2.0 era has been one of the major marketing trends during the last few years: more and more companies have been posting on various blogs, creating profile on Facebook, tweeting on Twitter, or posting news on Digg.com ,etc. While this is new to someone, here is another trend, and it is taking the web marketing one step further: it is called Social Appvertising! The leading brands are now starting to create special interactive Facebook applications to maximize consumer involvement. Examples? Coca Cola’s Facial Profiler application finding your twin on Facebook… Or American Express’ contest for creating your own ad through a Facebook application … Read more here

Earlier in this blog I wrote about how nowadays one needs to go extra mile, to excel customers “normal expectations” and delight in three dimensions in order to be successful. In his today’s post, Seth Godin goes even further and states that “All that succeeds is the UNREASONABLE”:

“You can get my attention if your product is unreasonably well designed, if your preparation is unreasonably over the top, if your customer service is unreasonably attentive and generous and honest. You can earn my business or my recommendation if the build quality is unreasonable for the intended use, if the pricing is unreasonably low or if the experience is unreasonably over-the-top irresistible…”

Read more on Godin’s blog.

Here are a few relatively new tools to help you discover and track trends, based on what people tweet, retweet and read on Twitter:

http://tweetmeme.com
http://monitter.com/
http://trendsmap.com
http://trendistic.com

Check out other trend tracking tools described here:
http://whereispuck.com/category/trend-tools/

Twenty reasons why people are willing to spread word about your idea according to Seth Godin http://bit.ly/coR21s