Review Driven Marketing(Social Media Marketing)

Michael Hong

Share of Online Sales continues to grow

2

e-commerce sales will represent 8 percent of all retail sales in the U.S. by 2014, up from 6 percent in 2009In 2009, 154 million people in the U.S. bought something online, or 67 percent of the online population (4 percent more than in 2008)Three product categories (computers, apparel, and consumer electronics) represented more than 44 percent of online sales($67.6 billion)  in 2009

Some products are more likely purchase online over offline

3

According to a study by the US Census Bureau, the bulk of sales are still in-store. There are, however, several categories in which online sales dominate each product marketplace. These include: books and magazines, clothing, and electronics.

But Online Influenced sales are over 5 times of online sales

4

While $155 billion worth of consumer goods were bought online last year, a far larger portion of offline sales were influenced by online research. Forrester estimates that $917 billion worth of retail sales last year were “Web-influenced.” It also estimates that online and Web-influenced offline sales combined accounted for 42 percent of total retail sales and that percentage will grow to 53 percent by 2014, when the Web will be influencing $1.4 billion worth of in-store sales.

Online influence is increasing as content sharing is getting easier with faster internet speed

Internet SpeedE

ng

agem

ent

Text

Audio

Pictures

Video

HD Video

Communicate Socialize

Task Life management

Just for Fun Full Entertainment

Web 1.0 Web 2.0

High

High

Information Content Sharing

Today’s Consumers are channeling their voices through Product Reviews that influences manufacturer. Consumers are now Prosumers.

• The Cluetrain Manifesto written in 1999 by , Christopher Locke, Doc Searls, and David Weinberger noted that "markets are conversations" with the new economy moving from

passive consumers ... to active prosumers.2 For instance, Amazon.com emerged as an ecommerce leader -- partially due to its ability to construct customer relations as conversations rather than simple, one-time sales. Amazon supports exchange of information among customers; it provides spaces for customers to add to the site, in the form of reviews.2

• However, mass customization has not taken place in most areas of the economy. Most consumption continues to be passive as critics of television, recorded music, and fast food would argue. Indeed, people are generally uninterested in going to the effort of customizing the myriad products that comprise modern consumer culture. In The Paradox of Choice: Why More is Less, Barry Schwartz argues that diminishing returns from a confusing abundance of consumer choice is producing stress and dissatisfaction.3 Still, one key area of high-customization is taking place: highly involved hobbyists.

ProfessionalProducer Consumer

It’s that 1% makes all the difference

• Members of motorcycle clubs are often viewed in a negative light by traditional society. This perception has been fueled by the movies, popular culture, and highly publicized incidents. One of the earliest and most notorious of these occurred in Hollister, California in 1947[6] [7] and is now dubbed the Hollister riot. Whether or not an actual riot occurred is debatable, but there was a motorcycle rally in Hollister from July 4 to July 6 of that year that was attended by about 4000 people. Several newspaper articles were written that, according to some attendees, sensationalized the event and Life magazine ran an article and a staged photograph of an intoxicated subject on a motorcycle parked in a bar. The film The Wild One, starring Marlon Brando, was inspired by the event, and it became the first in a series of movies that depicted bikers and members of motorcycle clubs in this stereotypical manner. The press asked the American Motorcyclist Association (AMA) to comment on the Hollister incident and their response[citation needed] was that 99% of motorcyclists were law-abiding citizens, and the last one percent were outlaws. Thus was born the term, "one percenter". They are also known as "Outlaw Motorcycle Gang" or (OMG) according to the ATF[8].

Just about everything is being reviewed and rated

Even Reviews are being Reviewed

davedude123456789 (3 months ago) Show Hide omg! im sorry but who cares about the voice command. also the speaker on my lg rumor is perfect and loud! there are 20 ringtones and you definitely only need 6 or 7 msging tones. the exposed number pad is just fine especially if it does have the lock! i love the phone! VolcomSkater211 (3 months ago) Show Hide whoa negative much?learn what the phone can do before talking smack about it! TrentonStolte (3 months ago) Show Hide umm....... i have the scoop and u can do voice command... its not that hard to get to.... why dont u try to actually look for what the phone features before you start talking shit on it andrechristi (3 months ago) Show Hide this girl sucks at this man!!! POST some gud comments . U SUCK AT THIS. BY the WAY THAT flip phone sucks. U dunt noe how to advertise videoguy2005 (3 months ago) Show Hide =( u suck at this

Reviews are being searched 86 million times per month and growing

Video Review are also fast growing.. Over one million video reviews

7354

13373

2360

4590

3507

3283

2007 2008

VOC Study 1Q-3Q ’07 vs. 1Q-3Q‘08

Number of reviews are growing…

5524

10779

2982

4466

1573

3869

2451

1855

691

232

2007 2008

MU

CE

DA

Cnet

Amz

BBuy

Sears

Home Depot

13,221

21,201

60%

13,221

21,201

60%

60%

94%

∆6%

95%

50%

146%

∆ 24%

Review Volume Trend

It about time that you start listening to customers

Reviews are the

Voice of Customers

I am listening but not sure what do to with that

Some tries Fake Reviews …it’s a PR nightmare

Why do they Review?

To correct the record when you see that somebody else has given an unfair review

22%

Why do they Review?

Because giving feedback publicly is the best way to get companies to listen to what you have to say

39%

Why do they Review?

To help retailers make better choice about what products they sell

46%

Why do they Review?

To help companies make improvements in the products and services they offer

48%

Why do they Review?

Because you rely on consumer reviews and posting reviews yourself is a way of giving back

56%

Why do they Review?

To reward a company that has done right 56%

Why do they Review?

To share experiences with other people62%

Why do they Review?

To help other consumers make good decisions70%

Who are the reviewers?

Most reviewers likes to write positive things

Thinking of all the times you've posted feedback online over the last 30 days, has your feedback been:

Product reviewers are also Influencers

Told friends and family about my experience

Sent an email to friends and family about my experience

Posted my comments on some other product review website

Telephoned the company directly to express my opinion

Sent an email to the company directly to express my opinion

Sent a letter the company directly to express my opinion

Posted my comments on a weblog (blog) of some kind

Besides posting your feedback online, have you already expressed your opinions on that same product or service experience using any of the following methods? If not, do you expect you will do any of these things in the future?

59%

One out of two reviewers are frequent writers

About how many times in the last 30 days have you posted publicly on the Internet any kind of feedback regarding a product or service?

They leave their voice where they buy

On a website belonging to a retailer and relating to an offline purchasing experience

On a website belonging to a retailer and relating to an online purchasing experience

On a product manufacturer's own website

On an independent "product review" website such as Epinions, ConsumerReview, ConsumerSearch, CNET, TripAdvisor, etc.

None of the above

On a weblog (blog) belonging to you or some other individual

Please tell us all the types of places you have posted feedback online about products or services (select all that apply)

66%

34%

Time

Arming for fightArming for fight Trying it onTrying it on ReassuranceReassurance

Internet

WOM In-storeForums

& Reviews

Collecting info

Avoiding a mistake

Feeling more

confident

Final check

Talk to friends

+

- Narrow choice

Obtain a visual

baseline

Talk to friends PURCHASE

WOM In-storeLeaflets &

internet

PurchasePurchase

▶Through out the journey of purchase, customer listens to what other customer have to say ▶Review Driven Marketing is to leverage customer’s voice to influence brand perception

So how do Reviews impacts my business?

* Source : Saatchi X

▶ 77% of online shoppers seek product ratings & reviews▶ 84% trust user reviews over a critic ▶ 58% of consumers start their research on the manufacturer web site

Customers are actively using product reviews

* Source : Saatchi X

* Source : Forrester, Jupiter Media, Shop.org

Case Study

Influence marketing by LG

Influencer Marketing

• Form of marketing in which focus is placed on specific key types of individuals rather than the target market as a whole

• It identifies the individuals that have influence over potential buyers, and orients marketing activities around these influencers

What It Is

Why LG Use It

For LGE, we see four key channels in the influencer ecosystem

• To increase awareness of LG within the influencer community and ultimately among target markets

• To raise brand affinity and influence purchasing decisions in a more impactful way than traditional forms of marketing

• To build advocacy by turning influencers into advocates of LG

• To keep the pulse of the brand by capturing consumer opinions that can affect product choices and marketing strategies

Retailer

Expert

Social Media

Consumer

Gain deeper consumer and brand insight

Monitor and check LGE’s influencer community and its impact among target markets

Keep a pulse on the brand

Foundation of Influencer Marketing

Engage MonitorInfluence

Influence the influencers

Join the conversation to contribute value

Amplify positive conversation to key influencers

Cultivate and facilitate consumer engagement

Turn most loyal consumers into citizen marketers

Generate viral buzz that will increase dialogue within key peer groups

Create a “momentum effect” where consumers use and share brand elements

34

1. Monitoring

2. Engage

• Monitor top 5 websites highly relevant ( Amazon, Bestbuy, Sears, Home Depot and Cnet etc.)

• Understand competitive landscape and apply learning to strategic planning

• Generate products reviews in text and video format via lgusa.com, Expotv and Youtube

3. Influence

• Amplify positive message while neutralize negative message

• Syndicate review contents between LG and strategic partners

• Increase search visibility via keyword tagging

Your Action Plan

Consumer reviews are the ultimate ‘unbiased advice’

People really trust the opinions of people like them and put a lot of weight to them. The bad reviews are as important as the good – if not more so. You need to encourage purchasers to write reviews and tell the world about their wonderful new experience

How do I incorporate this into my marketing strategy?

Opportunity

AmazonBest BuySearsHome DepotCnet

Monitoring VOC and Usage

DB

Product Improvement• Customer experiences

Consumer Insight

Marketing• Leverage VOC to

communications strategy

Sales• Product lifecycle extension• Product Exit Strategy

DB Capturing Storage DB Mining Application

Marketing Application of VOC

▶ Tell your customer about Top rated Products In-Store, Website, Email Print etc.

Amplification

Retailers

YouTube

ExpoTVCnet

▶ Spread the reviews to where your targets are.

Generate UCC on LG product review that will be highly visible in search site such as Google and Yahoo

Approach: Partner with YouTube & Google generating UCC on LG product review. Develop a set of keywords and tag to all UCC to support search engine.

Invite LG product users

to generate LG products review

Video content as Search results

Syndicate video content to

LGusa.com and other partners.

Tag Keywords to make the

video content search friendly

▶ Search engines are now offering video content as search results ▶ Product review contents are on high demand but video formats are not available. (< 2% per brand) ▶ Video contents are not search friendly due to improper keyword tagging.

Illustrative

AppendixAmplification

Marketing Application of VOC

Editorial Reviewswill influence early adopters

2Q2Q 3Q3Q 4Q4Q 1Q1Q

Reviews by early adapters are critical to 4Q sales

Insufficient reviews or bad reviews will negatively impact brand consideration

Heavy incoming Reviews determine winners and losers

Early Buzz

• Arrange publications to write product reviews (Cnet)

• Inject educational product contents to relevant context (Youtube, ExpoTV Retail sites)

Volume building

• Review writing contest (Product Registration, Wirewise etc.)

• Mobilize brand ambassadors (BzzScape, Adfusion)

Syndication

• Exchange review contents with retail partners

• Leverage reviews to influence purchase decision

Sales Extension

• Extend life cycle of High Buzz, High Rating product beyond 1st Q

• Leverage the recognition to next generation products

WOM Action Plan

1. VOC Monitoring Appendix

HE

LCD Plasma Bluray

Mos YTD Mos YTD Mos YTD

LG 6% 4% 6% 4% 3% 5%

Samsung 74% 62% 34% 42% 20% 35%

Sony 12% 21% 0% 0% 51% 32%

Panasonics 2% 1% 59% 54% 21% 18%

Sharp 6% 12% 0% 0% 4% 9%

n= 393 12,728 108 3,524 98 1,355

HA

Washer Dryer Refrigerator

Mos YTD Mos YTD Mos YTD

LG 20% 27% 10% 20% 32% 26%

Samsung 12% 5% 0% 1% 24% 8%

Kenmore 36% 49% 70% 43% 21% 42%

Whirlpool 16% 9% 10% 18% 11% 5%

GE 8% 3% 0% 10% 8% 8%

Maytag 8% 6% 10% 9% 5% 10%

n= 25 1923 10 820 38 1671

Source: LG VOC tracking at amazon, cnet, Bestbuy, Sears and Homedepot

Share of Voice - Illustrative sample report

September 2008

Recommendation Rate – Illustrative sample report

Model Mos n YTD n Ind NormLHX 3 3 4.5 15LH90 4.6 2 4.3 30LH55 4.9 1 4.6 24LH50 4.5 3 3.9 105LH85 4.3 5 4.5 12LH75 4.6 6 4.3 150LH40 2.2 2 4.6 23LH30 4.5 2 3.9 45LH20 4.3 3 4.5 67LU60 4.6 3 4.3 25LF11 3.9 1 4.6 7CL 40 3.9 1 3.9 5PS80PS60 THXPQ30PS30 PS25PQ20 PQ15

BD390BD370BD370M

BD270LHB977LHB953LHB954 M237WDW1953TQW2053TQW2253TQW2253C W2353VW2453VW2753VW1943T W2043TW2243T W2343TW3000H W2061TQ W2361V W2361VG

MONITORS

4.1

4.3

4.2

4

4.5

LCD

PDP

BD-P

BD-HTS

Model Mos n YTD n Ind NormLHX 3 3 4.5 15LH90 4.6 2 4.3 30LH55 4.9 1 4.6 24LH50 4.5 3 3.9 105LH85 4.3 5 4.5 12LH75 4.6 6 4.3 150LH40 2.2 2 4.6 23LH30 4.5 2 3.9 45LH20 4.3 3 4.5 67LU60 4.6 3 4.3 25LF11 3.9 1 4.6 7CL 40 3.9 1 3.9 5PS80PS60 THXPQ30PS30 PS25PQ20 PQ15

BD390BD370BD370M

BD270LHB977LHB953LHB954 M237WDW1953TQW2053TQW2253TQW2253C W2353VW2453VW2753VW1943T W2043TW2243T W2343TW3000H W2061TQ W2361V W2361VG

MONITORS

4.1

4.3

4.2

4

4.5

LCD

PDP

BD-P

BD-HTS

HE HA

VOC – Key Learning

Pro: • Design ,picture

quality,4 HDMI

Con• Remote is not the

best in the world • No dvi out for

computer

Pro•Quiet, Looks great

Con• terrible odor (mold/must) and leaks. •paint on top shows scratches easily •long cycles (Washing & Drying)

LG - SteamWasher 4.2 Cu. Ft. 9-Cycle Ultra Capacity Washer - Wild Cherry Red Model: WM2487HRMA | SKU: 8631983

Customer Reviews:  4.3 Read reviews (23)

LG - Scarlet 42" 1080p 120Hz Flat-Panel LCD HDTV Model: 42LG60 | SKU: 8808329

Customer Reviews:  4.9 Read reviews (18)

LG - 20.5 Cu. Ft. Counter-Depth Side-by-Side Refrigerator w/ Thru-the-Door Dispenser - Stainless-Steel Model: LMX21981ST | SKU: 8846083

Customer Reviews:  4.3 Read reviews (3)

Pro•The look and water/ice dispenser

Con• It's not cheap, but we feel like got our money's worth

2908

5078

519

1198

954

1175

542

634

90

468

2007 2008

VOC Trend study

2831

62251183

1398

843

801

156

126

2007 2008

‘Flat Panel Reviews Volume

Cnet

Amz

BBuy

Sears

Pan

SS

Sony

SharpLG

▶Flat Panel Reviews are significantly increased at Amazon.com▶SOV of LG significantly increased from 1.8% to 5.5%.

71%

71%

5,013

8,553

5,013

8,553

VOC Study 1Q-3Q ’07 vs. 1Q-3Q‘08

120%

L 79%P 21%

L 78%P 22%

75%

131%

23%

17%

420%

205261

528

276

80

32

28

48

51

80

26

23

2007 2008

VOC Trend study

676

440

82

228

146

28

14

23

2007 2008

Washer Reviews Volume

HD

Amz

BBuy

Sears

May

Ken

WPSam

LG

▶Washer reviews are significantly decreased in ‘08▶SOV of LG significantly increased from 22% to 36%.

∆ 21%

27%

918

720

918

720

VOC Study 1Q-3Q ’07 vs. 1Q-3Q‘08

∆ 35%

178%

∆ 21%GE

∆ 48%

127

15

17

42

66

46

520

96

14

99

195

104

2007 2008

VOC Trend study

595

161

101

204

241

25

4

7

2007 2008

Refrigerator Reviews Volume

HD

Amz

BBuy

Sears

May

Ken

WP

Sam

LG

▶Refrigerator reviews are significantly decreased except Samsung▶SOV of LG increased from 21% to 26%.

∆ 57%

600%

941

402

941

402

VOC Study 1Q-3Q ’07 vs. 1Q-3Q‘08

∆ 73%

102%

∆ 47%

GE

∆ 48%

∆ 90%

∆ 57%

Net Recommendation Rate =

(# of Recommended - # of Not Recommended)

Total Review Volume

Share of voice =

Total Brand Review Volume

Total Category Review Volume

VOC Trend study

▶WOM Strength can be measured by NRR (Net Recommendation Rate) and SOV (Share of Voice)

Net Recommendation

Sh

are

of

Bu

zz50%

100%

25%

0% 50%

MU

DA

CE

1. VOC Monitoring –Summary

▶ Samsung has the highest Share of Buzz and strong rate of recommendation ▶ MU and DA are leading the VOC for LG

Michael Hong, Digital Marketing Consultant

Michael is a Senior Marketing Management professional with exceptional skills and experience in e-Commerce Marketing. Michael has 20 years of marketing and marketing communications experience at corporations such as AT&T and LG Electronics. He is a creative marketer and a thought leader in digital marketing and multicultural marketing industry. He spoke at numerous conferences such as Internet Retailer and the eM9-Marketing Conference.

Specialties: Advertising Strategy, Planning and Execution, Digital Marketing (SEO, SEM, Social media, Word-of-Mouth), Direct Marketing, Multicultural Marketing, B-B Marketing

 Education: Cornell University, Ithaca, New York

B.A. 1985 School of Art, Architecture and City Planning

Contact: (C) 201 841 9659 njmikehong@yahoo.com

Thank You