Jan Van den Bergh - The Recommender Revolution

Jan Van den Bergh – Holaba – Sanoma Mediaparade 2014 – jevedebe@holaba.comThe Recommender Revolution -
6 Takeaways for those who don’t stay the whole session
1. Your brand recommenders are the most important asset in your database.
Chances are you haven’t identified them yet.
2. If you identify them and win them all … you win plenty of battles.
3. You can identify them while benchmarking your recommendation power.
Maybe you already benchmark. Good.
4. Move on from RFM to RRFM
5. Go for a non-customer centric approach.
Stop navel-gazing. Your customers are promiscuous
6. Join the “Media Influencers Index” Hype.

Recommenders directly influence 20-50% of all purchase decisions.
“
“

Their oral interactions however are not in your Big Data!
Over 90% of the influential recommendations take place off line.
Face2Face …or whatever you might call it.

http://www.youtube.com/watch?v=erZ2YidTZp4. Minute 06:45
“If you know the enemy and know yourself, you need not fear
the result of a hundred battles. If you know yourself but not
the enemy, for every victory gained you will also suffer a
defeat. If you know neither the enemy nor yourself, you will
succumb in every battle”
Sun Tzu, The Art of War,
Open your windows, benchmark your enemies continuously and spot
the brand recommenders.

In fairy tales asking the Magic Mirror about “the most beautiful brand in the
world” takes 7 years to get an answer. IRL you have to move faster.
Research
Brand
aka SnowWhite’s mother

Look through the window and discover who your toughest competitors are
and why even your best clients are attracted to them too.

And then: attack. But don’t kill. Marketing is a war without weapons no?

If you don’t attack, you will end up being only a winner in your wet dreams.
Too bad.
The reality
The dream

“Customers’ satisfaction levels explain less than 1% of the variation in changes in their
share of category spending. Yes, the relationship is statistically significant, but it is not
very managerially relevant.”
There is not a strong relationship between satisfaction and marketshare. Being “satisfied”
doesn’t mean that you also recommend actively or when asked your opinion. The
more “mass market” you’re in the less customers are satisfied.
Don’t ask about satisfaction. Ask about recommendation. Only when when
you measure recommendation power, you measure influential activity.
Don’t be sad about clients being less loyal
than before. Face the reality and move on.

Benchmarking is measuring recommendation power.
“I am satisfied … but I don’t need these
superthings. Who cares. I don’t want to pay for
the extra’s”
“I am satisfied … but others are cheaper.”
“I am satisfied … but it is time for a change”
“I am satisfied …. but I prefer buying more
in my neighbourhood”
“I am satisfied …. but some brands are better
and I go for the best”
“I am satisfied … but my friends suggested
to check out a competitor.”
“I am satisfied …but some others are easier to handle”
“I am satisfied ….but I prefer buying more online”
Only when when you measure your WOM-strength, you measure useful
activity of the major players in the market

Promiscuous behavior of consumers is a big opportunity for deeper
penetration i.e. dating real prospects.
“Companies need to invest to re-earn penetration over and over again. Winners accept
that it’s a game of constant recruitment. That’s why they invest on an ongoing basis to
acquire more new consumers every year than they lose. (Bain - 2014)

Go violently for a penetration strategy. You’ll love it. But don’t push.
Move when there is an intention. When the situation is promising.

Indeed: relevant (pushed or pulled) ads are still an excellent and needed tool
in any penetration strategy.

And since more and more consumers use online channels during the pre-
sales phase don’t overlook them.

But – to be honest – these (ads in) paid media are not the most trusted, nor
the ones that push consumers into action.

Earned media have most
influence, are more
trusted and generate
more action
Paid media generate
more touch points,
hence they are strong
in building awareness.
Their “Opportunity To
Be Seen” is bigger.
Paid media cost more than earned and
owned media. Brands plan to invest less in
paid media in the coming years.
And the “paid media” take a big bite of a brand’s marketing budget. The
earned media cost less. You’ll have to find day after day the best mix.

Recency, frequency, monetary value
(RFM) of clients were decisive for
investment in marketing
communication. Therefore lots of
money spent (wasted) in this group of
heavy and recent buyers
RFM - axis
Light and non frequent buyers are
often “neglected”
From RFM to RRFM to decide about what to invest where.

Recommendation axis
+RFM & - REC
- RFM & - REC
+RFM & + REC
- RFM & + REC
RFM - axis
Does not mean they all give
positive recommendations
Frequency and intensity
of recommendation.
The recommendation power of clients becomes the decisive tool to decide
on marcom-investments

How and where do you find these earned media? The human media. The
brand recommenders? Stop navel-gazing.

Start by asking them all (!) how likely it is that they will recommend your
brand?
Client 1 0 1 2 3 4 5 6 7 8 9 10
Client 2 0 1 2 3 4 5 6 7 8 9 10
Client 3 0 1 2 3 4 5 6 7 8 9 10
Client 4 0 1 2 3 4 5 6 7 8 9 10
Client 5 0 1 2 3 4 5 6 7 8 9 10
Client 6 0 1 2 3 4 5 6 7 8 9 10
Client 7 0 1 2 3 4 5 6 7 8 9 10
Client 8 0 1 2 3 4 5 6 7 8 9 10
Client 9 0 1 2 3 4 5 6 7 8 9 10
Client 10 0 1 2 3 4 5 6 7 8 9 10
Client 11 0 1 2 3 4 5 6 7 8 9 10
Client 12 0 1 2 3 4 5 6 7 8 9 10
Client 13 0 1 2 3 4 5 6 7 8 9 10
Client 14 0 1 2 3 4 5 6 7 8 9 10
Client 15 0 1 2 3 4 5 6 7 8 9 10
Client 16 0 1 2 3 4 5 6 7 8 9 10
Client 17 0 1 2 3 4 5 6 7 8 9 10
Client 18 0 1 2 3 4 5 6 7 8 9 10
Client 19 0 1 2 3 4 5 6 7 8 9 10
Client 20 0 1 2 3 4 5 6 7 8 9 10
Client 21 0 1 2 3 4 5 6 7 8 9 10
Client 22 0 1 2 3 4 5 6 7 8 9 10
Client 23 0 1 2 3 4 5 6 7 8 9 10
Client 24 0 1 2 3 4 5 6 7 8 9 10
Client 25 0 1 2 3 4 5 6 7 8 9 10
Client 26 0 1 2 3 4 5 6 7 8 9 10
Client 27 0 1 2 3 4 5 6 7 8 9 10
Client 28 0 1 2 3 4 5 6 7 8 9 10
Client 29 0 1 2 3 4 5 6 7 8 9 10
2 clients you asked give a 9. You’re happy.

But one of these 2 clients gives your competitor a 10.
Bad news for you. You’re not his real nr 1.
Client 1 0 1 2 3 4 5 6 7 8 9 10
Client 2 0 1 2 3 4 5 6 7 8 9 10
Client 3 0 1 2 3 4 5 6 7 8 9 10
Client 4 0 1 2 3 4 5 6 7 8 9 10
Client 5 0 1 2 3 4 5 6 7 8 9 10
Client 6 0 1 2 3 4 5 6 7 8 9 10
Client 7 0 1 2 3 4 5 6 7 8 9 10
Client 8 0 1 2 3 4 5 6 7 8 9 10
Client 9 0 1 2 3 4 5 6 7 8 9 10
Client 10 0 1 2 3 4 5 6 7 8 9 10
Client 11 0 1 2 3 4 5 6 7 8 9 10
Client 12 0 1 2 3 4 5 6 7 8 9 10
Client 13 0 1 2 3 4 5 6 7 8 9 10
Client 14 0 1 2 3 4 5 6 7 8 9 10
Client 15 0 1 2 3 4 5 6 7 8 9 10
Client 16 0 1 2 3 4 5 6 7 8 9 10
Client 17 0 1 2 3 4 5 6 7 8 9 10
Client 18 0 1 2 3 4 5 6 7 8 9 10
Client 19 0 1 2 3 4 5 6 7 8 9 10
Client 20 0 1 2 3 4 5 6 7 8 9 10
Client 21 0 1 2 3 4 5 6 7 8 9 10
Client 22 0 1 2 3 4 5 6 7 8 9 10
Client 23 0 1 2 3 4 5 6 7 8 9 10
Client 24 0 1 2 3 4 5 6 7 8 9 10
Client 25 0 1 2 3 4 5 6 7 8 9 10
Client 26 0 1 2 3 4 5 6 7 8 9 10
Client 27 0 1 2 3 4 5 6 7 8 9 10
Client 28 0 1 2 3 4 5 6 7 8 9 10
Client 29 0 1 2 3 4 5 6 7 8 9 10

Look (less) or (not only) in the mirror and more through the window.
There’s the market. There are the voters. The influencers. The buyers.
Very bad ranking
for “You “
Excellent
ranking for “You”
More or less ok ranking for
“You”
1 Competitor 1.You (+20) 1 Competitor
2 Competitor 2 Competitor 2 Competitor
5 Competitor 5 Competitor 5.You (+20)
10.You (+20) 10 Competitor 10 Competitor

That’s how we do it: “How likely are you to recommend this brand?”

3 questions: your experience, your score, your buying intention.

Scores
9 -10
Scores
9-10
Scores
9-10
Scores
9-10
Scores
9-10 Scores
9-10
Scores
9-10
Scores
9-10
Scores
9-10
Scores
9-10
Scores
9-10Scores
9-10
Scores
0-6
Scores
0-6
Scores
0-6
Scores
0-6
Scores
0-6
Scores
0-6
Scores
0-6
Scores
0-6
Scores
0-6 Scores
0-6
Scores
0-6
Scores
0-6
The brands these boys & girls
also recommend
Brand Profile of boys & girls 18-25 yrs old,
who all give a very high 9 & 10
recommendation score to brand X.
The brands they don’t
recommend at all.
Scores
0-6
And when 1000’s of consumers do it every now and then, they build unique
profiles for themselves and several segments with their peers.

Extra-contacts generated : brands reach consumers through media,
but since not all consumers are created
equal, some become “human media”
and some not.
Brands
Media
“Human media”“Just humans” “Just humans”
And they’re influencers. Brands can influence these influencers by running
ads in the media these influencers engage with.

The Media Influencer Index.

7 takeaways for those who arrived too late
1. Your brand recommenders are the most important asset in your database.
Chances are you haven’t identified them yet.
2. If you identify them and win them all … you win plenty of battles.
3. You can identify them while benchmarking your recommendation power.
Maybe you already benchmark. Good.
4. Move on from RFM to RRFM
5. Go for a non-customer centric approach.
Stop navel-gazing. Your customers are promiscuous
6. Join the “Media Influencers Index” Hype.
7. Never arrive too late.

Jan Van den Bergh - The Recommender Revolution

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