#ewom

[retailtouchpoints]

Choosing Who To Buy From: Why User Reviews Are More Important Than Just A Low Price in E-Commerce

By Professor Saravana Jaikumar, IIM Calcutta

Consumers today have both more options of goods to buy and more information about those goods than ever before. Now, shopping in an e-marketplace involves the consideration of more products and more sellers at more price points. In such a complex commerce world, how do you develop the right price strategy and increase sales? My findings, recently published in the Journal of Advertising Research (“How Do Consumers Choose Sellers In E-Marketplaces”) show that the cheapest version of a product is not always the one chosen. Products with strong word of mouth may have greater preference.

There are interesting dynamics at hand. Observational and eye tracking research on anchoring (the lead or display priced product) and eWOM (seller review volume, also known as Electronic Word of Mouth) was conducted.

Let’s look at what happens in a highly competitive category like consumer electronics. If you search for Microsoft Xbox One on Newegg, you come up with 17 sellers offering the product. The price displayed in the search results was the lowest price ($249) and appeared on the product detail page in a bold font. But in another instance involving Samsung Galaxy phones, the price listed in bold was not the lowest price. This price, termed as the display price of the product, acts as an anchor price with which all other prices are compared. Anchor prices like these are key, as they create a temporary representation of that number in our short-term memory that influences further evaluation.

So, beyond price and how and where that price appears on the page, what makes the difference? User-generated word of mouth. More so than what those reviews say, even the sheer volume of them has influence. eWOM in product sales can be divided into reviews of the product as well as reviews of the seller, and there are three aspects to reviews: valence (the nature of the content, or whether it is positive or negative), volume and dispersion of reviews.

To investigate the high review volume over price factor, eye tracking research was done with both high and low price points as display prices. Besides the choice of the seller for each product, eye movements and fixations were recorded. Areas of interest (AOIs) were created for all the stimuli (display prices, seller-review volumes, and seller prices). Once again, despite the price in the display unit, review volume had more impact. Display price acted as an anchor and biased further evaluations of the sellers.

When a low price is used as the display price, consumers likely will purchase the product from the low-price seller only if that seller has high review volume. Similarly, when the high price is used as the display price, consumers more likely will purchase the product from the high-price seller if that seller has higher review volume than others. Given this, e-marketplaces that rank on price should consider ranking on the basis of review volume of sellers.

Review volume — positive, negative, modest or glowing — is what makes the sale. To get their customers to write reviews, marketers and sellers should treat their customers with great care and offer incentives to do so. For example, they can make appeals about posting a review in purchase confirmations and any follow-up emails to increase response rate. They also can show examples of reviews that answer factual questions and give detail about the product, rather than purely attitudinal statements that do not add to the general knowledge base.

The key takeaway for e-marketplace sellers and marketers is that many online marketplaces are choosing the featured price from those with high review volume, and therefore, more reviews will ultimately benefit the seller.

Professor Saravana Jaikumar is a Fellow (Ph.D.) of Marketing from IIM Ahmedabad and MBA from Cardiff Business School, UK. He is currently affiliated with Indian Institute of Management Calcutta as Assistant Professor in the Marketing group. His research work has been published in reputed international journals including Journal of Advertising Research, Journal of Business Research, Marketing Letters and Journal of Product and Brand Management. He is interested in research related to pricing, pharmaceutical price regulation and consumer behavior at the ‘bottom of the pyramid’.

[knowmadman]

Turorial: Claves para integrar embajadres de marca en la estrategia de marketing.

Los embajadores de marca tienen el poder de enamorar a tus consumidores.

¿Qué es el embajador de marca?

Entender el escnario digital en el que nos movemos nos ayuda a respoder a esta pregunta.

Internet y en particular las redes sociales han cambiado de forma drastica la manera en la que tenemos de establecer nuestras relaciones.

Los clientes están mucho más expuestos a los mensajes…

View On WordPress

[lucasmccallionmkt-blog]

Word of Mouth

Today’s post topic will be on Social Transmission, derived from the concepts of Jonah Berger’s New York Times Bestseller, Contagious, Why Things Catch On.

Jonah defines Social Transmission as “social influence and word of mouth” which has indeed proven to be contagious and gives a deeper meaning as to why things catch on. To paraphrase his conceptualization, Jonah touches on the factors of human interaction and how they allow marketers to tap into their audience once, leaving it to their audience to then spread the word for them. The reason for this is that people love telling stories and people love to hear them. The stories that we hear from colleagues, friends and family etc., have a significant impact on us as the listener because we value our peers’ inputs. This has changed the game of advertising because as Jonah rightfully states, word of mouth is more persuasive than traditional advertising because ads will always argue that their product is better than their competitors, which consequently makes their arguments less credible. But the words from our trusted peers are naturally considered to be more valid because our peers’ opinions are unbiased to the company’s image or products.

Jonah’s second reason for word of mouth being more effective than traditional advertising is that “word of mouth is more targeted”. His example for well placed targeting of ads is for a skis company. Would it be more beneficial to the company if their ads were placed on television during the nightly news, or would it be more productive to place their ads in a ski magazine? It’s a pretty straightforward example but so many companies lose sight of this. 

Today I want to show you two ads from two separate companies that have successfully executed the use of Social Transmission and have given new industry standards in advertising for their industry’s products.

First, Heineken’s 2013 The Voyage ad campaign with the slogan, “Open your World”:

This ad struck me as a great example for this subject matter due to Heineken’s perfect use of story telling about their product and the type of experiences that their product (beer) will bring to the consumer without ever explicitly saying anything. Let’s dig in, the video starts off with what seems to be an interesting guy that has drawn a picture of his taxi driver, has a pet goat for some reason and shows that everyone seems to be interested in him (hinting that interesting people drink Heinekens). He then creatively pays the waiter for two Heinekens with his goat being his crafty accomplice and proceeds to dance through the festival trying to get back to his goat that is holding his two cold beers. 

The video continues to play several scenarios of him trying to catch his goat, one being, an attractive woman gives him a spicy pepper where he then immediately looks at the two beers that are covered in condensation persuading the audience that Heineken pairs well with spicy food due to its refreshing qualities (all without explicitly saying this). The chase continues where he meets a guru of sorts and then conveniently comes across two more attractive women that, of course, show interest in him. The video ends with him ultimately getting his beers in time to meet up with his friend where they happily share the two beers. This video’s main goal is to show all the possibilities a night can have if you choose to “chase” Heineken, concluding that if you drink Heineken, you’re bound to have an epic night. Again, all this was left to interpretation of the viewer by showing an exciting video without mentioning the product’s qualities as a beer or the qualities of the potential night you might have if you choose to drink Heineken.  

The second video is a humor driven clip for Old Spice, the pioneer in thinking out of the box in their content strategies. Other brands like Axe Body Spray have done a decent job in conducting their advertisements in a similar fashion.

This video is without a doubt meant to make the audience laugh but there’s a subtle ingenuity to it when it comes to the two ladies. The “Alpha Dog” itself is hilarious and has nothing to do with deodorant, which shows Old Spice’s content strategy of being outlandish and irreverent to the fundamentals of advertising. The ingenuity shines through when the two ladies deliberately call out Old Spice’s lack of traditional advertising by saying, “That’s suppose to sell deodorant?” and then proceed to say, “Talk about something real, like the smooth sophisticated scent of Old Spice” it mocks the traditions of advertising making them a vigilantly of advertising.

These two ads show that Jonah’s intellection of the significance of word of mouth is more important than simply stating the product’s qualities or uses by creating ads that will generate discussion and sharing, leaving the traits of the product out of the message. Everyone knows that there are plenty of deodorants and beers and that it all comes down to customer preference, so why not aim your content to stand out and be shared virally. I don’t know about you guys, but I am falling victim to their marketing and will be getting a case of Heinekens and Old Spice after I sign off here. Hope this was an informative post that will help you to redefine your content strategies.

[seniorenrico]

Missed oportunities in viral marketing

Missed oportunities in viral marketing

Last night, as part of my new job, I went to an SEO discussion group. I have watched this video a couple of times now, and it’s pretty great.

It’s not that this is not fantastic viral marketing, because it is! Until that last second you don’t really know that it s an advert for Carrie at all and the narrative below says is:

What if…

View On WordPress

[jasonlayne]

[gooibiz]

This Is the End of Facebook as We Know It

http://www.wired.com/2014/04/this-is-the-end-of-facebook-as-we-know-it/f

[digital-marketing-in-the-ai-era]

Definition of Electronic Word-of-Mouth

The most well-defined and extensive definition of electronic word-of-mouth (eWOM) to date is by Hennig-Thurau, Qwinner, Walsh and Gremler (2004), who define the complex term as follows:

"Any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet."

[fluidnations]

Siemens feeling the pressure of ewom

This post is part of a series on the book 'Marketing to China's Netizens, Persuaders of the World's Biggest Market'. For a book preview go to fluidnations.com.

A first look at Luo Yonghao and you see an unassuming English teacher, who works very hard to support his middle class lifestyle. So far one of hundreds of million in China. This teacher is upset because he has bought a brand new refrigerator with a malfunctioning door from an expensive international brand. By opting out of a Chinese make, he thought he paid for quality on all levels. German durability and reliability. Jawohl!

Putting myself in Mr Luo's shoes I see his point pretty easily. What good is a refrigerator when it doesn't shut properly. Surely this is an easy one for the complaints department! By the way, this wasn't the first time Mr Luo had had a problem with white goods from the same brand. He was a loyal customer who got disappointed too many times. Lessons from the past (Best Buy) teach us, that a disappointed customer who is then well served, is more likely to remain loyal than a customer who never had a problem in the first place. Siemens had a chance to WOW a customer into loving the brand, but chose a different tactic.

Siemens customer service department in China seemed better at keeping the customers out than dealing with the problems at hand. So when Mr Luo was repeatedly ignored, belittled or at the very least made to feel under-served by the German brand's customer service department, Mr Luo had finally had enough and sent a little tweet into China's Digital Landscape [incidentally, home to a mere 500 million netizens and China's most affluent and best educated consumers - see Chapter 1, Debunking China's Myths].

Now, for context, it helps to know that Luo Yonghao is a special kind of teacher who, through the gift of the gab and his humorous lectures, is wildly popular among his students. His following is no longer limited to a Beijing class room either. Thanks to the passionate re-tweeting of his funny quotes, his students have helped him gain a following of well over 1.3 million fans on China's microblogging platform Weibo (http://www.weibo.com/laoluoyonghao).

So Mr. Luo is what you could call an Efluencer in China, someone who has the power of persuasion through a wide digital social reach [Chapter 2, The Persuasive Powers of Netizens]. Unsurprisingly, China's Electronic World of Mouth did the job for Mr Luo's tweet. The voice of one quickly became the voice of thousands. The painful climax came when Luo Yonghao and 7 other disgruntled customers brought their refrigerators to Siemens China Head Quarters in Beijing and proceeded to smash them to pieces. A refrigerator with a malfunctioning door, from a brand that refuses to listen, might as well be no refrigerator at all!

It may seem a mystery why Siemens was caught off guard by the persuasive power of China's Netizens, but in fact few international brands are savvy participants on China's web. One reason is that the local digital landscape is a complex and quickly changing playing field. Another reason may be that digital marketing is not high enough on the strategic agenda of multinationals in general.

http://www.youtube.com/watch?v=bAW2LPRn0vQ

After the smashing incident, Siemens refused to take responsibility still but when negative sentiment mounted further it had to back turn on its stubborn position. "Siemens Gate" ended on December 5th, when the president of Siemens China himself, Roland Gerke, had to bite the dust and make a public apology, true Chinese style. Gerke said that Siemens will take three measures to address the refrigerator door problems.

1. The German brand will open a Weibo page to resolve customer complaints and handle maintenance request [ed. Weibo is a twitter like platform, which will be used by Siemens as a retention tool; see CMO Guide to China's Digital Landscape in Chapter 3].

2. Siemens will provide door-to-door testing services to purchasers who are experiencing the problem.

3. Siemens will install a device to fix the problem at no cost if the problem persists.

It's hard to stop the bleeding when you've arrived too late on the scene. Siemens China may have learned a painful lesson and smartened up. Or it has introduced a short term solution to address the embarrassing problem at hand. If so, all we have to do is wait for the next public apology, because the power of persuasion remains in the hands of netizens. And Siemens' reputation will remain at peril.

In conclusion, to grow business in China, brands need to design a structure that engages Chinese consumers ongoingly in the domain where they feel most at ease to express themselves; in China's digital landscape. A framework in Chapter 2, China's Dragon of Persuasion explains how brands can go through 7 steps to strategically embrace China's netizens for a more sustainable brand position.