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The Power of C2C Recommendations for the Retail Sector
1. The Power of Consumer-to-Consumer
Recommendations in the Retail Sector
Thursday, September 13, 2012
2. About RewardStream
RewardStream is an emerging leader in consumer-to-
consumer (C2C) marketing solutions for brands targeting
the socially connected customer.
We help clients to energize consumers to recommend &
refer to their trusted networks, and then to evolve them
into loyal, high value relationships.
Since 1999, we have delivered customer referral, loyalty
and engagement solutions for some of the world’s most
esteemed brands.
4. Agenda
• Quick look: Marketing in the retail sector
• Overview of research: Keller Fay & WoM for retailers
• Examples: A look at how several retailers are fueling
growth through referral marketing
• Q&A
5. Have a Question?
• Use the chat window in GoToMeeting
to submit your questions throughout
the session; we have left time for
Q&A at the end of the webinar
• If we don’t get to your question
during the session, please send
questions directly to
amberlie.denny@rewardstream.com
7. Search is Under Siege
“We do on the order of a billion queries a day, and we’re not even
trying. Most of it is people trying to find people, but a bunch does link
to commercial behavior like trying to find brand pages. You get these
search engines where you type in keywords and it runs some magic to
tell you what it thinks you want. But I think search is evolving to
provide specific answers. Facebook is pretty uniquely positioned to
answer most of the questions people want to ask. Like “What
restaurants do my friends like?”
- Mark Zuckerberg
At Techcrunch Disrupt
September 11, 2012
8. “Search isn’t growing as it was for some of
our business because consumers are looking
for us in other places”
- Jessica Koster,
Senior Director eCommerce
The Jones Group
9. More marketers believe
social and mobile will
increase in effectiveness,
as compared to affiliate
marketing and email
11. “Your brand isn’t what you say it is.
It’s what other people say it is.”
1. Give people a reason to talk
about your stuff
2. Make it easier for that
conversation to take place.
12. “Hearing what other people have to say about a
product gives shoppers the satisfaction of
knowing what they purchased is peer-reviewed
and worth their money. Whether it is based on a
conversation with a friend or a customer review
on a website, people put a lot of weight in other
shoppers’ opinions. “
- Mike Gatti,
Executive Director
Retail Advertising and Marketing Association
13. “Marketers spend millions of dollars on elaborately
conceived advertising campaigns, yet often what
really makes up a consumer’s mind is not only
simple but also free: a Word of Mouth
recommendation from a trusted source. A Word of
Mouth recommendation is the primary factor
behind 20 to 50% of all purchasing decisions.“
- McKinsey Quarterly, April 2010
15. Research Goals
• What is the influence of word-of-mouth recommendations in the
retail category?
• Are word-of-mouth recommendations more or less influential at
different points during the consideration and purchase lifecycle?
• Is there a difference in the impact of solicited vs. unsolicited
recommendations?
16. Who is The Keller Fay Group?
• The first research-based marketing consultancy
focused exclusively on word of mouth
• A few nuggets from The Face-to-Face Book:
• It’s an invaluable tool for marketers who want to spread
the word about their products and brands faster than
the speed of Facebook and with far greater impact.
• In-person social networking, not online marketing, is the
secret to soaring revenues.
• 90% of recommendations that lead to consumer action
happen offline.
17. Methodology
• RewardStream commissioned Keller Fay to study how
recommendations affect purchases in banking, vacation travel,
communications, subscription entertainment, and retail categories
• The survey was conducted among a total sample of 1,274 adults
ages 18-59 who had purchased, applied to, or subscribed to a new
product or service in the past 12 months.
19. Recommendations are Frequent
Recommended a product or service to Made a purchase based on a
someone recommendation
Never Never
1% 1%
Rarely Rarely
6% Very Often
7% Very Often 11%
16%
Sometimes
33% Sometimes
Often
42%
Often 40%
43%
20. Recommendations Impact More Purchases Than Any Other
Source
% of purchases influenced at any purchase stage, all categories
A personal recommendation 40%
Past experience 32%
Something I saw in a store/office 19%
Online consumer review websites 17%
An advertisement in a magazine, newspaper, or online 17%
Price comparison websites 15%
A commercial on TV or the radio 14%
Something on a package, flyer, or brochure 10%
An article in a magazine, newspaper, or online 9% Over 20% of responses of
“Something Else” include a reference
A TV or radio program 6% to price, cost, an offer, or sale.
Another type of website 5%
Other items include convenience or
Online blog 4%
need, or general references to family
Another type of ad 3% and friends.
Social media site 2%
Something else 22%
21. Face-to-Face Communication is the Most Predominant Way to
Make a Recommendation
% of purchases influenced by recommendations by mode at any stage, all categories
Face-to-face 82%
Over the phone 15%
Via e-mail 5%
Via SMS/text 1%
Via IM/chat
1%
(e.g. AIM, GChat)
Via Facebook or Twitter 1%
Via another social media site
1%
(e.g. Google+, Tumblr)
Some other way 6%
22. Recommendations are Evenly Divided Between
Solicited and Unsolicited
% of solicited and unsolicited recommendations for specific purchases by purchase stage, all categories
Solicited Recommendations Unsolicited Recommendations
55%
47% 46%
44% 44%
37%
While becoming aware of a While researching various options While preparing to purchase
specific brand
23. Across All Stages, Recommendations are
Most Influential in Purchases
% of purchases influenced by purchase stage, all categories
Recommendations Advertisements (Net) Online (Net) In a Store (Net) Nets defined as follows:
40% Online (Net)
• Online consumer review websites
35% • Price comparison websites
28% • Another type of website
30% 26% 26% • Online blog
• Social media site
25% 23%
23% 19% Advertisements (Net)
20% 18% • A commercial on TV or the radio
• An ad in a magazine, newspaper, or
17% 13% online
15% 14% 17% • Another type of ad
10% 8%
In a Store (Net)
• Something I saw in a store/office
5% • Something on a package, flyer, or
brochure
0%
While becoming aware of While researching various While preparing to
a specific brand options purchase
25. Retail Sector Highlights
1. Consumers seek recommendations from family and friends more
often for retail categories than for any other category.
2. Consumers increasingly seek advice from experts and other
informed sources as the value or perceived importance of the
product increases.
26. Respondents Overwhelmingly Identified Friends and Family as
the Source of Recommendations for Retail Products
% of purchases influenced by recommendations given by each
Personal Care Health Products
Family/Friends (NET) 63% Family/Friends (NET) 60%
A friend 38% A friend 29%
Other family member 24% Other family member 24%
Spouse/Partner 1% Spouse/Partner 11%
A sales person/clerk 24% A sales person/clerk 17%
A co-worker 6% A co-worker 8%
An acquaintance 4% An acquaintance 4%
Someone else 20% Someone else 29%
Apparel Consumer Electronics
Family/Friends (NET) 75% Family/Friends (NET) 81%
A friend 42% Other family member 39%
Other family member 29% A friend 34%
Spouse/Partner 10% Spouse/Partner 13%
A sales person/clerk 16% A sales person/clerk 27%
A co-worker 11% A co-worker 13%
An acquaintance 7% An acquaintance 1%
Someone else 5% Someone else 2%
27. Consumers Seek Recommendations from Family and Friends
More Often for Retail Categories Than for Any Other Category.
% of people likely to look for advice from different types of people for specific types of purchases
Somebody Close (Family/Friends) Distant Friend with Experience in Category An Expert/Professional in Category
78%
40% 42%
18%
13%
9%
A purchase related to fashion or personal appearance A technology purchase (e.g. a computer, TV, phone)
28. Recommendations vs. Advertisements for Select Retail
Categories
% of purchases influenced by recommendations or advertisements (net) by category
Recommendations Advertisements (NET)
Personal Care Health Products
40% 40% 33% 31% 33%
28%
23% 23%
17% 15%
20% 11% 20% 10%
20% 21%
0% 0%
While becoming While While preparing While becoming While While preparing
aware of a researching to purchase aware of a researching to purchase
specific brand various options specific brand various options
40% Apparel 40% Consumer Electronics
24% 26% 23%
20% 18% 21%
20% 20% 13%
6% 7%
15% 14%
0% 0%
While becoming While While preparing While becoming While While preparing
aware of a researching to purchase aware of a researching to purchase
specific brand various options specific brand various options
30. Getting Customers Talking: A Top 100 eTailer Turns to WoM
They wanted to know….
• How could they capitalize on the
good will of their happy customers?
• How could they get their existing
happy customers sharing their
brand?
• What customer insights would they
be able to glean?
• What efficiencies could they achieve
in their marketing?
31. Happy Customers Share Offers with New Customers
• Launched Refer-A-Friend using their already loyal,
enthusiastic customer-base as a springboard for new
customer acquisitions through referrals
• Customers can share coupons with friends via Facebook,
Gmail, Twitter, email and personal URL
• When their friend uses the coupon to make a qualifying
first purchase, the referrer receives a coupon they can
use against a future purchase
32. "… new customers up 44%
driven by strong results from the
Company's marketing initiatives
and the continued success of its
Refer-A-Friend program."
33. Nurturing New Members:
A Beloved Family Of Brands Pilots WoM
• Family of brands created an exclusive
program to be a resource on baby and
toddler nutrition, while offering
exclusive savings, samples, offers and
resources to members
• They were looking to use customer and
member recommendations to expand
their online community, increase
awareness for their program, and grow
their member-base
34. Getting Members Sharing!
• For a limited time, members can share the program
with friends/family and moms to be in their social
circles using email, Facebook, Twitter, and
personalized URL
• When the friend becomes a member of the program,
they receive a $10 gift card to Amazon for the NEW
amazon baby store, or anything else they’d like to
purchase from Amazon
35. Early Impressions
“With each wall post made we have the ability to
reach a wider audience through impressions, thus
increasing program awareness through word of
mouth, all while helping to drive acquisition.”
36. Early Impressions
“Because everything is tracked at both aggregate
and individual member levels, this really provides
us with valuable insights on who some of our key
influencers might be. Think of the possibilities and
targeting we can do moving forward, knowing who
these high value members are.”
38. Customer Takeaways
1. Customers are happy to share with friends and family -
especially when your product, service, brand or
program makes them happy!
2. Making it easy to share means more sharing will
happen.
3. A referral program that capitalizes on social
recommendations – both online AND offline – can
boost acquisition, deliver actionable insights into who
your most valuable customers are, and drive awareness
… not mention ROI.
39. Research Takeaways
• Word-of-mouth recommendations are a strong driver of
consumer purchase behavior at all stages of the purchase
lifecycle, regardless of purchase category.
• Consumers seek recommendations from family and friends more
often for retail categories than for any other category, but they
increasingly seek advice from experts and other informed sources
as the value or perceived importance of the product increases.
• In general, the importance of recommendations increases the
nearer consumers are to making a purchase.
• The influence of advertisements decreases as consumers progress
along the stages of the purchase lifecycle in all of the retail
categories.
40. Have a Question?
• Use the chat window in GoToMeeting
to submit your questions throughout
the session; we have left time for
Q&A at the end of the webinar
• If we don’t get to your question
during the session, please send
questions directly to
amberlie.denny@rewardstream.com
41. Contact
Alexandra Best Richard Robins
VP Marketing VP Client Success
RewardStream RewardStream
alexandra.best@rewardstream.com richard.robins@rewardstream.com
604.282.7549 604.282.7544
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Twitter.com/RewardStream
