Getting Started with Word-of-Mouth Marketing

FILED APRIL 20, 2011

Dear Client:

Word of mouth marketing, or WOMM as the hip consultants call it, is all the rage these days as marketers cast about for ways to drive sales as the 30 second TV spot continues to lose efficacy. So BBD sat down with Ted Wright, founder of word of mouth marketing consultancy Fizz, which specializes of WOMM for beverages, to talk about how beer marketers can utilize influencers to tell their story. You, my friends, are a fly on the wall.

TED ON GETTING STARTED WITH WOMM. "The first thing you have to do is get comfortable with the idea that this -- word of mouth -- is the way that marketing is going to go in the United States for the foreseeable future. And that will then allow you to take all your existing marketing and ask yourself, does this marketing create conversation? And you have to be really hard on yourself. If it doesn't create conversation, then you have to commit to chuck it. If it only 'kind of' creates conversation, then you have to ask what more you can do to create more conversation. An example is, Molson created some coasters a few years ago that had questions on it that you could ask the hot but unapproachable chick at the bar. And the idea was that the coaster was making you come up and ask the question, and maybe you could get a laugh..... so there's somebody at Molson who knew, 'I've got to have coasters because we're a beer company.' But then somebody said, 'you know, yes we gotta have coasters, but what can we do to make those coasters a part of the conversation?' So you have to get comfortable with the idea of WOMM, but you have to take an inventory of all your marketing, and run it through the test of, what conversations is it starting?

"The next thing you need to do is to realize that influencers are out there -- they are one in ten of the population -- and they will come and find you if your story has three qualities: It's interesting, relevant, and authentic..... Nobody out there trusts advertising anymore. Eight out of ten North American consumers don't believe what advertisers tell them.... Nine out of ten people say word of mouth is the number one reason to consider a new product, and 19% chose a brand solely on the recommendation of a friend. People are talking frequently. The average person has 112 market relevant conversations a week and talking bout 56 brands. Influencers have half again as many conversations and talk about twice as many brands. Influencers are more effective, and they are talking about brands more often. So we're kind of crazy to not go after that one in ten people who influence the other nine.

"Influencers have three personality traits: They like to try new things because they are new, they like to share stories with their friends, and they are intrinsically motivated. Because of this, they are out there looking for stories. So your job as a brewer is to create beers and marketing that generates a good story. And whether that's, 'I used to be a model and now I make beer by spitting into the bottom of it,' or 'I'm produced by wind power and my beer is so awesome people stand in line for it in Chicago', or 'I'm a guy who made money on blue cheese and washing machines but now I'm resurrecting steam beer in San Francisco'... Those are interesting stories."

WHO IS ALREADY DOING WOMM WELL IN THE BEER INDUSTRY? "I think to a man and a woman, the folks in craft beer who are successful, are successful because they are doing word-of-mouth marketing well. And mostly it is because those people were naturally driven from the mid-1980s forward -- Widmer brothers, Ken Grossman, Jim Koch, Kim Jordan -- all those guys said screw the other guys, we're going to do this a better way. They're like writers, they are driven to write. Like you -- you had other options in your life but you chose to do this because you are compelled to write, and you can tell. Not just in your daily column, but in the fun stuff you do with your blog writing about Lulu and your various mishaps ( life of Harry is something you want to know more about. It's the same with brewers who have a passion for making great beer. When it's there, you can tell, and the influencers out there will take notice and share that passion with others. You've got Flying Dog with their unique labels, and moving to Frederick and making interesting beers, to Pierre Celis that you wrote about yesterday, to Brooklyn, to Jim Koch snorting hops on television....they are doing something that they are passionate about, and that lends itself to sharing....Writers have to write, singers have to sing, and influencers have to share their experiences with their friends. It's what drives them.

On the big brewer side, I like what MillerCoors is doing at Leinenkugel's, using the brothers in the trade so prominently. I think Tom Cardella at Tenth and Blake was genius to lend Terrapin money with little or no strings attached and not making a big deal about it. People at CBC couldn't stop talking about it. It lends credibility to Tenth and Blake."

HOW IMPORTANT IS SOCIAL MEDIA TO THIS? "All social media are just tools, and some are more effective than others depending on what you are trying to do. The most effective tools in social media are the ones that most closely mimic the conversations that you would have face-to-face with your friends. Right now only one out of ten conversations happen digitally. The other nine happen face-to-face or on the phone. So the most popular social media tool is Facebook. Technically Facebook is considered asynchronous conversation. But when you go look at it, and eight hours later you can jump into a conversation and say what you thought of Les Miserables last night, it acts in practice more like a one-on-one conversation. It mimics conversation. Twitter is also somewhat effective, but it doesn't mimic conversations as well. Now, they are trying to get better at it ... recently they've tweaked it where you can now more easily follow the conversation by seeing whose responded. So in general, the more widely adopted a social media tool is, the more effective it is at mimicking a conversation, and Facebook and Twitter are the most widely adopted."

DOES WOMM WORK FOR BIG BEER BRANDS? "Size does not matter. What matters is the quality of the story that people will tell. Because word-of-mouth is analogous to a great cocktail party guest. The story has to be interesting, quick, and know when to shut your mouth. You can't dominate the conversation and talk over people, you can't be boorish. Big brands can be successful as long as they focus on the things that are true to the brand. If your brand doesn't have that, if it doesn't ring true to anybody outside of the four walls of the brewery, then consumers won't buy it.... You have to find what is interesting, relevant, and authentic about the brand, and then drive that home with focus. If you don't have that, then you need to dominate a property, [like A-B has done with the NFL]; or innovate, [like MillerCoors has done with Coors Light packaging].

"We know that 76% of Americans talk about at least one brand a day, and the average number of brand-specific conversations they have is ten. And 15% of every conversation in America mentions a product or service. Wow. Talk is happening. Word of mouth conversation is like a river that is wide, deep, and it's always flowing. The question you have to ask yourself is whether you're ready to build a very small damn and a very small canal and take some of that water of word of mouth and make some money out of it. People are talking about your product all the time, 24/7, 365 days a year. The question is, are you going to channel that word of mouth, that's already happening, and change it into word-of-mouth marketing. And organize and point it in a direction that's going to make you the most profit.

"Commercials are like that sound that you hear, white noise. You don't notice it in your daily life unless you sit down and pay attention. But with Tivo and the remote and Hulu and reading the New York Times on your iPad, you're not even paying attention to it anymore. Ad Age ad critic Bob Garfield says he's glad he's not 30 because he'd have to be out looking for a new career, because the job of TV ad critic won't be around much longer. It's be like being the buggy whip critic....

"We did a study of TV ad campaigns....and if you put all ad campaigns in the denominator, and how many ads actually moved the needle and sold more in the numerator, across all consumer good categories, it's only 8 to 12%...... I would say that the effectiveness of broadcast advertising is declining, and that many emerging brands are opting not to do it."

Thanks for your time, Ted.


STANDARD AND POORS raised the investment-grade credit ratings on Anheuser-Busch InBev one notch thanks to reduced debt and good performance. S&P said the outlook on the A- rating--four notches above junk--is stable on expectations that the company's financial discipline will allow it to keep its credit quality in line with the rating.

FORMER A-B CHIEF AUGUST BUSCH IV has agreed to pay $1.5 million to settle the wrongful-death lawsuit over the accidental drug overdose death of his girlfriend, Adrienne Martin, according to court records. The proposed settlement, which is subject to judicial review next month, is a negotiated agreement between attorneys for August and Dr. Kevin Martin, the ex-husband of Adrienne Martin and father of her 8-year-old son.

BREWPIC: St. Pauli Girl has announced that Jennifer England has been named the 2011 St. Pauli Girl spokesmodel, becoming the 27th girl to don the barmaid outfit.

Until tomorrow, Harry

"My great mistake, the fault for which I can't forgive myself, is that one day I ceased my obstinate pursuit of my own individuality."
-Oscar Wilde

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