Social Media ROI: Advocacy for BMW

April 11, 2011

This is the real “one number you need to grow”.  I’m sure most of you are familiar with Net Promoter Score.  This is the MotiveQuest version of NPS; observed, organic, real.

We measure advocacy, which is the number of people recommending a brand above any others, and have seen strong relationships between the metric and sales in a number of categories including automotive, cellular, CPG, pharma and others.  The underlying concept is similar to NPS – namely that if people are recommending your brand to others, that you will be better off than if they are NOT recommending your brand.

Here is where it is different from NPS.  We are observing naturally occurring recommendations.  There is no suggestion, no survey, no artifice.  People are either recommending your brand to others or they aren’t.  We have tested this extensively (working with a team at Northwestern’s Kellogg School) to validate the correlations between change in advocacy and change in sales or market share.

Example below from the luxury car category showing the correlation between changes in advocacy and changes in share for BMW.

While the scales are different we can see the positive correlation in advocacy and luxury market share for BMW. Looking at the scatter plot and doing the regression confirms the relationship and it’s statistical significance with a p-value of 5% (we’re 95% confident that there is a positive correlation between advocacy and luxury market share). 

Given the complexity of the automotive category and the economic conditions in this time frame it’s amazing that a single factor model can so nicely line up.  With an understanding of incentives to dealers/buyers, advertising spend and supply issues I’m certain the model could be improved but at the end of the day we’re validating that social media does matter. 

Social media clearly has an impact on sales in this category and others.  Many times the relationship will not be this clear or the category may be so complex that a single variable model cannot tease out the results or there could be errors in the metric (source spam/problems, bad language model, etc…)  but if you believe in the 3 tenets, it’s not surprising and quite intuitive that there should be a link between a social media metric and sales.

Of course, to change advocacy you need to know what drives it – but we do that part too!  We have an underlying analytic model to understand in detail what drives advocacy for any category, brand or competitive set.

@tomob

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What if Social Media Doesn’t Matter?

April 7, 2011

Guest Post from MotiveQuest CTO Brook Miller (@brookmiller)

As I’ve worked the last 7 years in building metrics and tools to help companies understand the reasons why people do what they do, 3 facts have become evident:

1) Pretty much everyone is online

2) Online communities are reflective of or an enhancement to traditional social relationships

3) People I know are the best source of product recommendations

The digital trails consumer conversations leave online are a good approximation for the world at large.  The latest pew Internet research report show online population reaching  79% of all Americans.  Furthermore, rather than asking people questions about what they think, we can just observe what they say.  We don’t have to ask people if they do or don’t do something we can observe them.

Online communities are as real and vibrant as any other and are built around long term relationships.  Whether it’s a community like Facebook that looks like friendships I’ve developed throughout life or LinkedIn, the connections I’ve made in business, or on a forum like Rennlist, my boss’s favorite Porsche aficionado site, the community is strong and vibrant, with lots of on-going relationships that grow and fade with new people coming into ask questions from experts or lurkers that keep up with the community without contributing or the occasional visitor that just wants to see what the experts think.  These communities are strong, vibrant and have their analogs in social situations in the offline world.

The impact of person to person recommendations is stronger than advertising or other methods of company sponsored communications, when you want to know what car to buy you ask a car nut, when you want to know how to get the best deals on frequent flyer miles you ask a friend with a passion for travel.  Increasingly, though you’d find your friend saying “go look on flyertalk” there’s a thread for that (can I trademark “there’s a thread for that?”).  I was recently browsing flyertalk to figure out international fares for a 2 year old ( I’ve never booked a child fare before and didn’t want to get screwed) while I was there I saw a new miles promo on United it had been posted and had hundreds of comments before it even reached my inbox from United later that day.

Given that people online are pretty much everyone, the communities represent real social relationships and people I know give the most trusted recommendations we should clearly expect to see that a social media metrics measuring peoples’ recommendations to each other would be reflected in sales.

We measure advocacy, which is the number of people recommending a brand above any others, and have seen strong relationships between the metric and sales in a number of categories. (I’ll post more in the future specific to the nuts and bolts of it)

While the scales are different we can see the positive correlation in advocacy and luxury market share for BMW. Looking at the scatter plot and doing the regression confirms the relationship and it’s statistical significance with a p-value of 5% (we’re 95% confident that there is a positive correlation between advocacy and luxury market share).

Given the complexity of the automotive category and the economic conditions in this time frame it’s amazing that a single factor model can so nicely line up.  With an understanding of incentives to dealers/buyers, advertising spend and supply issues I’m certain the model could be improved but at the end of the day we’re validating that social media does matter.

Social media clearly has an impact on sales in this category and others.  Many times the relationship will not be this clear or the category may be so complex that a single variable model cannot tease out the results or there could be errors in the metric (source spam/problems, bad language model, etc…)  but if you believe in the 3 tenets, it’s not surprising and quite intuitive that there should be a link between a social media metric and sales.


Peet’s Evanston Made My Day

February 19, 2010

As I was walking to work today in a daze I made my usual right turn on Chicago and Davis to head over to Peet’s coffee. (Just walking in the door at Peet’s and inhaling is usually enough to wake me up – no coffee shop smells so much like great coffee!) I wandered up to the counter and placed my usual order

Me: “large coffee please” (no latte’s or frappe’s for me).

Peet’s: “That’ll be $2.15” (I reach into my pockets – no money, left wallet at home)

Me: “sorry, I don’t have any money – so nevermind”

Peet’s: “doesn’t matter, you need your coffee and you can pay us tomorrow”

Me: “no, no I couldn’t”

Peet’s: “take the coffee, you need it”

Me: “OK, thanks a lot”

I know that free coffee doesn’t cost them much, but this gesture still makes me feel really good. I am a huge Peet’s fan and advocate, but now I will recommend them even more. That’s good word of mouth!

TO’B

@tomob


9 Things About Social Media

November 2, 2009

Two weeks ago I was on a panel for the AC Nielsen Center for Marketing Research at UW talking about social media and market research to executives from Wal-Mart, General Mills, Kraft, Microsoft, Johnson & Johnson and 50 or so others. I was asked to share some lessons learned about SM – from the perspective of a brand marketer.

Here are my lessons learned personally and professionally over the last 10 years working in this space.

  1. What people say to each other is more important than what we say to them.
  2. People no longer rely on brands for information.
  3. Advocates are more important than influencers.
  4. Brand mentions are just the tip of the iceberg – somewhere between 5% and 30% of the relevant category conversation. You should listen to the whole conversation.
  5. If you want to participate be helpful, human and humble.
  6. When you participate, put the community’s interests & motivations first.
  7. Connect to existing passion, don’t just make stuff up.
  8. If you want new ideas, look beyond your category.
  9. Brand advocacy is the most important metric today – are people recommending your brand to others.

I could elaborate – for a long time on each of these, but  you get the gist.

TO’B


Will Obama’s Approval Ratings Dive?

October 13, 2009

We (MotiveQuest LLC) have just completed the third report in our series on the Health Care Reform debate. Because we think brand advocacy is the most important metric for brand health, (we used this to predict the outcome of the 2008 Presidential Election) we decided to take a look at Obama’s advocacy over the course of this very rancorous HC reform debate.

What we see is that the overall level of conversation is down, and some topics have faded (rationing) while others have continued to increase (insuring the uninsured).

Regarding advocacy, we thought that perhaps Obama’s HC Reform related advocacy would be lower than his overall advocacy – but when we compared the two, we found that they are both dropping at similar rates. Since

we have proven the link between changes in advocacy and changes in

sales in a number of categories (Cars, Cellphones) we decided to compare Obama’s advocacy to his approval ratings – the lines are a pretty close match, with advocacy seeming to lead approval ratings by a few weeks. If so, watch out below.

What do you think? Will Obama’s approval ratings plummet further in the next few weeks?

TO’B


Healthcare debate analysis

September 9, 2009

We (MotiveQuest LLC) have decided to start tracking & analyzing the healthcare debate using our online anthropology tools and techniques.  The first report in this series can be found here:  The Raging Debate

For this series we will be monitoring & analyzing the online conversation around healthcare and providing weekly updates as to what is driving the conversation, advocacy for different options and the emotional tenor of the chatter.Healthcare Topics

Here is one chart from the report showing the key topics and drivers of concern – you can see the landscape has changed significantly from June through August.

You can see that rationing shows the biggest increase from June through August.

We will be posting a follow-up report next week which will reflect today’s speech by President Obama.

If you are interested in more information you can contact me at tobrien at motivequest dot com.

Thanks – TO’B


Advocates are more important than influencers

August 18, 2009

For some time I have been arguing that what brands need is advocates not influencers.  Somehow this meme has recently gathered steam in the marketing discussion (see great post here from Jeremy Epstein – influencers vs. fans)

I don’t think fans is quite the right word for what brands or movements need, what they need is advocates.  Advocates are different than fans because they will do something.  They will recommend you to a friend, they will tell someone else to buy your car.  They are taking positive action.   Moreover, they don’t do this because they are “influential” or because they are being paid by the post or enticed to write nice things b/c they are getting free stuff.  They are telling their friends (online and off) to do something, because they believe.

I have studied Brand Advocacy in some detail and I am confident in saying that increasing levels of advocacy (online and off) are correlated to increasing sales or share.  We have studied this in automotive, food, cellular, spirits and other markets with some variability (how much of the change in share or sales are explained by the change in advocacy; time lag) but always with a strong positive correlation.

When we work with brands, key questions are how many advocates do you have (compared to your competition) is the number increasing or decreasing and why?  Also, we examine what your advocates love about you most, and figure out how to leverage these things to grow advocacy.

Contrast this approach with Influencer marketing.  With adovocacy research and marketing we are trying to discover why your authentic brand fans love y0u most and how to make more advocates.  With influencer marketing you are trying to find those few people who will influence lots of other to do something.   Now like most things this works great if you get the right influencer, on the right topic.  Clearly Oprah Winfrey recommending a book to her audience is a guarantee of a NYT best seller.  Every other influencer works less well than that.

The other day I had a tweet with Guy Kawasaki about this very subject.  Guy has somehow Corvettewrangled a Corvette from GM to drive and tweet about as an “influencer”.  I respect Guy for lots of things, but is opinion is irrelevant to me as a car guy.   (Though Guy did confirm that it is fun for him!)  This is but one of many, many influencer strategies being deployed by big companies, and some of them will work.  But to me it feels more like Viral Marketing than anything else.  Rather than engaging your REAL brand users on the level of their personal brand experience, you are looking for a few influencers who will tell the rest of us sheep what to do.

What if instead of giving Guy (and I’m assuming a bunch of other “influencers”) a Corvette GM spent the resources engaging with the people over at the non-GM owned Corvette Forums which has 30 million posts from some 223,000 members?  Those are the Corvette advocates, and the care and feeding of the Corvette advocates (even if they aren’t famous) should be the #1 job of the Corvette PR and Marketing teams.

<RANT OFF>

TO’B