Some research tidbits for Christmas

Over the last couple of weeks a few interesting research items on social psychology and social network analysis have crossed our desks – so we have compiled them into this collection of research tidbits for Christmas.  Enjoy!

In-flight influence

First up, a study that shows how the decisions of people around us influence our decisions, even if we don’t know the people.  This elegant piece of analysis, written up in this working paper and covered by the Washington Post (albeit with a misleading headline) shows how our decisions about whether to purchase in-flight food and drink are influenced by those around us.   Because the study had access to reservations data, it was able to exclude groups travelling together, and control for parameters such as seat choice.

The research found that people sitting near other purchasers were 30% more likely to make in-flight purchases.  If this is the the level of influence that strangers hold over us, how much more is our behaviour influenced by those who we care about?  Answer: in Idiro’s experience, lots.

The same Washington Post article referred to an interesting piece of research demonstrating the power of peer pressure in schools.  Message to all parents: make sure your kids are in classes with people cleverer and more diligent than them.

A link analysis of languages

Multi-lingual Wikipedia editors: which languages?
Multi-lingual Wikipedia editors: which languages?

There are plenty of studies showing how which languages are spoken by the greatest number of people, which languages are economically the most powerful – but which languages serve as the pivots between other, less popular languages?  To put it another way, if you speak a minority language (like Welsh) and want to understand it written in another (e.g. Kikuyu), which other languages are necessary to make the link?  In this case, most Welsh speakers know English, as do many Kikuyu speakers – so the answer is simple: just English.

Quartz published details of an interesting MIT study looking at this in depth, using three data sources: multi-lingual Wikipedia editors, multi-lingual Twitter accounts, and book translations.  The data is displayed in an interactive website but it’s worth watching this video, as it’s a complex enough study.

One can criticise the data sources, of course (for example, the great firewall of China restricts Chinese Twitter usage) but nevertheless it’s a fascinating topic.  Here in  multi-cultural Idiro, the most common hub language is English (of course), followed, we observe, by Russian.

How many friends?

How many people do we have contact with through our mobile phones?  Idiro’s researchers took a week’s worth of connection data from a European mobile phone network, and counted the number of different phones that each person had contact with over a week.  We then plotted the distribution of the number of contacts each phone had – in other words, the total number of links per person.  As the graph shows, a number of phones were (as one would expect) used rarely or not at all that week.  A few users made over sixty unique connections in a week, and a large number of people made between 5 and 15 connections.  We compared Christmas with an average summer week. and found – no surprise – that people make more connections over Christmas week, as we renew old friendships.

Distribution of the number of mobile contacts per person
Distribution of the number of mobile contacts per person

Finally, here is a study by Hill and Dunbar demonstrating that Christmas card networks are (or were, when we used to send Christmas card to all our friends) a reasonable approximation of Dunbar’s number – 150.

Merry Christmas to all, from the Idiro team

How women influence each other’s purchases

My wife has just bought a new car.  We made a shortlist and test-drove three, but the early front-runner was the one that her friend Bernie drives and recommended.  And so it came to pass that that she bought the same car as Bernie has. It’s a great car incidentally – but without Bernie’s recommendation, it is unlikely that my wife would have considered it.

I thought of Bernie when I read an Adweek article about a survey carried out by the USA-based ‘Ladies’ Home Journal‘ on the ways in which women influence others’ purchases.  Adweek published an interesting infographic on the survey.

Ladies' Home Journal survey - how women influence each other
Ladies’ Home Journal survey – how women influence each other

The importance of peer influence to decision-making come as no surprise – these are broadly in line with Idiro’s own empirical research and with most published studies, including Nielsen’s annual survey on trust in advertising.  Interestingly,t he list of purchases that are most influenced by peers includes low-priced and much higher-priced items – note that automobiles come in at #4.

More controversial is the finding that ‘peer influence is age-agnostic’.  Most studies agree that closeness of age is a driver of peer influence – the closer the parties are in age, the more likely they are to influence each other, which makes sense.  Idiro’s own empirical research finds that similarity of age is a significant determinant of influence.  However, unlike Idiro’s research, this survey measures perceived influence not the actual purchases, which may account for the difference.

Though this survey is USA-based, Idiro’s experience (and the latest Nielsen global advertising survey) suggests that results would be broadly similar in other countries.  It would be interesting to replicate this survey among men – doubtless the detailed results would be different, though the level of influence would be doubtless be fairly strong.

To learn more about how Idiro can help with influencer marketing, check out our case studies or contact us.

Postscript 16th May: this research from Nielsen India breaks down the stated influence on car purchase between spouse, family members, friends and colleagues (see graphic below).

Influences on Indian car buyers. Source: Nielsen

How to run a successful trial of Social Network Analysis for marketing

At this stage, everyone in marketing understands the power of word-of-mouth – which Tom Fishburne’s cartoon, below, elegantly illustrates. Organisations with link data – telcos, gaming companies, social networks and the like – can take a scientific approach to word-of-mouth marketing (aka influencer marketing) by deploying Social Network Analysis algorithms to target the influencers – or the influenced.   Idiro is a pioneer in this space.

Over the past few weeks we have been talking with two mobile operators who, prior to talking to Idiro, had each run projects to evaluate the benefit of Social Network Analysis (SNA) for improving targeting in marketing.  However, in both cases the trials ran into difficulties that could have been avoided. At the end of the projects both mobile operators had invested significant time and money in running a trial, but neither was in a position to make an investment decision.

We’ve been involved in mobile operator trials of Social Network Analysis for over eight years, and we’ve seen the good, the bad and the downright ugly – so we know how to run a successful trial of Social Network Analysis for marketing. Here are eight tips to help you run SNA trials that give you a clear evaluation of SNA for your business – quickly and efficiently.

1. First, be really clear on your objectives

It might sound obvious – but are you proving a technology, evaluating a vendor or trying to find the best way solve a business problem? Be really clear on this, both internally and with your SNA trial vendor(s). Also, how serious is your organisation about adopting a SNA solution if the trial succeeds?  We evaluate operators who come to us looking for SNA trials on 2 axes:

  • To what extent are the key sponsors prepared to accept the concept behind SNA for marketing?
  • The degree of organisational backing / commitment to deploying a SNA solution if it is proven (worst case: a solo run, best case: a project with board backing)

Make sure your organisation is prepared to invest in a solution before you start your evaluation of SNA.

2. Work out the evaluation, decision and implementation steps in advance

A common cause of trials not completing successfully is that the assessment of SNA that they deliver is not what the senior team needs in order to make the investment decision.  Therefore, before you finalise the trial, work out the evaluation process and success criteria. We offer our customers help with evaluation methodologies for SNA in marketing.

3. Design the trial carefully based on your objectives and your approval process

Many mobile operators make the mistake of specifying too much technical detail (while leaving the business success criteria too loose).  Others base their trial design on the offering from a particular vendor. We all know which vendor will perform best in a trial like that!

Different SNA solution vendors have different philosophies, and it is usually best not to specify the vendor’s methodology or business model tightly, at least initially, and focus on the business benefits that are required (see point 1). That way, a wide range of vendor approaches can be tested – and ideas that you did not think of can be incorporated into your project. Use the agreed evaluation method and success criteria to inform the key elements of the scope:

a) Live or historical trial, or both? b) Role and design of control groups c) Technical  / operational models to be considered (Saas, managed service, software licence, etc.)

These are important choices, and they will affect the outcome of your trial.

4. The farmer and the cowman should be friends

The most successful SNA implementations tend to have close cooperation between marketing and analytics teams. Whichever side of the organisation you work on, bring your colleagues on board early.

5. Get the trial campaign right

Because they target the influencers or the influenced in your customer base, word-of-mouth campaigns need to be designed carefully. If your evaluation involves a campaign, don’t put all your effort into the technology and test it on a bog standard campaign.  Idiro are experts in word-of-mouth campaigns.

6. Budget

Be realistic about how the relationship between spend and quality. Most vendors want to cover their costs at least, during the trial. You could doubtless persuade one or two vendors to work for free, but this might mean that you exclude the best vendors. Remember also to budget for internal costs.

7. Fix a realistic timescale

SNA trials with thorough methodologies take time to do properly. Trials with highly aggressive deadlines nearly always overrun – typically because one or more internal tasks do not receive the priority they need. Set realistic deadlines and make sure your internal project manager has the authority to get the tasks done.  Beware of shortcuts, particularly around evaluations.

8. A successful introduction of new technology requires change in the organisation, which isn’t easy

A successful post-trial implementation leading to a strong ongoing ROI depends on getting a number of factors right – operational, analytical, process change, KPIs, etc.  When post-trial implementations fail, they do so because they don’t address these difficult issues or don’t have a strong leader keeping the focus on the benefits.  Once the SNA trial is completed, the benefits are proven and the contract is signed, make sure you task the team with delivering the benefits within (say) 6 months and not just completing the implementation project.

 

Idiro would be happy to expand on any of these points.  If you are planning a trial of Social Network Analysis solutions for marketing, feel free to run your ideas by us. We might save you some heartache.

Targeting groups of influencers with music festival VIP tickets

The warmer weather in Northern Europe has put some of us Idiro folk in mind of music festivals.  That reminds us of how we helped a mobile operator not so long ago.

This mobile operator customer of Idiro’s, like many of its peers, sponsors music festivals and concerts in order to build brand preference – and to reward loyal customers.

Historically, the telco gave VIP tickets away to customers chosen for their high spend or long tenure.  However, a perennial problem with free tickets is that many more customers will say yes to free VIP tickets than will actually turn up on the day.  Typically this operator was only seeing 35% redemption of its VIP tickets, leading to big empty spaces in the VIP area, a poorer experience for VIP guests leading to the brand experience diluted for those who did turn up, and embarrassment all round the marketing team.

The customer approached Idiro with a request to use Social Network Analysis techniques to choose the best targets for the offer of VIP tickets, to achieve the following objectives:

  • Increase the % of VIP customers who show up to the concert
  • Target influencers within the base with these VIP tickets, to maximise the positive word-of-mouth from the VIP experience.

Idiro tackled the problem by using the Idiro Social Model to identify influencers with strong social ties to other influencers on the base.  In addition, a number of other approaches were also used to identify the right sort of groups of the most appropriate influencers for the task in hand.

We took the trouble to find small groups of influencers who knew each other and met the telco’s spend and tenure criteria for being a VIP.

And the results?  The mobile operator targeted these customers with VIP tickets for the next music event – and found that the percentage of VIP customers who took advantage of the offer doubled, to 70%.

Measuring the word-of-mouth benefits of a campaign like this is difficult – because the effects can be very subtle.  Nevertheless, Idiro’s customer was delighted with these results.

To learn more about how Idiro’s advanced community marketing analytics can benefit you, please contact Idiro.

How MCI’s ‘friends and family’ tariff and campaign changed telecoms marketing

In 1991, US landline carrier MCI launched an offer that was to be copied by fixed and mobile telcos across the world – its ‘Friends and family’ tariff and campaign.

Nowadays it is hard to imagine a world without competitive telecoms, but competition in US telecoms had only begun, slowly, from 1984 (in Europe, competitive telecoms began with Mercury Communications in 1982).  The USA telecoms market was split between the local exchange carriers (LECs) and the long-distance carriers.  At the time, there were three significant long-distance operators in the USA – AT&T, the incumbent, plus MCI and Sprint, the challengers.

MCI’s early history was so dogged with lawsuits to win the right to compete that wags joked that MCI was ‘a legal practice with a telecoms tower on top’.  MCI was later to fall in the Worldcom accounting scandal and is now a subsidiary of Verizon.

So, back to the story.  By 1991 MCI has established itself as a serious player in the long-distance market.  MCI decided to launch a new type of tariff, where the caller would gain an extra hefty discount if the person they were calling was also an MCI customer.  The story goes that the MCI team heard that AT&T was working on a similar plan, but that the billing development would take many months for both companies (telecoms veterans will know that billing system development is usually the bottleneck in telco services), so MCI rented a warehouse, hired hundreds of clerical staff, gave them desks and computers, and taught them to them calculate the discounts by hand – then launched the service.  MCI’s ‘Friends and family’ service was a massive success.  By the time the competitors responded, MCI had gained massive market share and the battle for ‘Friends and family’ was over.

It seems obvious in hindsight that telco customers tell their friends about the purchases they make.  We all accept now that for communications products, an economic incentive can be designed to add to the social pressure already existing, and will drive customers to follow their friends in switching telecoms provider.  A former Idiro employee, Dr. Daniel Birke, explored this phenomenon in his Ph.D thesis and his subsequent book.

The MCI campaign was successful because it combined two key elements:

  • A tariff discount for caller if the recipient was also a user of MCI’s long-distance service
  • A member-get-member campaign where the customers were encouraged to ask their friends to join MCI to avail of the discount or to pass the phone numbers of friends to MCI salespeople.

It is worth pointing out that MCI’s ‘Friends & family’ tariff was fundamentally different to the on-net mobile tariffs that are almost ubiquitous today.  Firstly, on-net calls are cheaper to deliver than offnet calls, because they attract no interconnect payment whereas MCI gained no savings from delivering calls to ‘Friends and family’ destination because the service was provided by the LEC in either case.  Secondly, differentiating between on-net & offnet destinations in a billing system is relatively straightforward, whereas MCI had to apply the discount based on each customer’s individual list of ‘Friends and family’ destinations.

Perhaps the story of the warehouse full of staff at computers typing up bills is an urban myth, but MCI’s success was a lesson to all telcos: social influence is a strong force in marketing.  Combine a generous offer to a customer’s social group with an easy mechanism for sharing, and your customers will market your product for you.  Add in a strong brand and an excellent user experience and your customers become apostles.  It is hard to achieve but for those that do, the rewards are considerable.

Idiro has many years’ experience of helping telcos exploit social influence using sophisticated targeting methods and by consulting to optimise word-of-mouth marketing campaigns.  To hear more about Idiro’s successes, contact us via experts@idiro.com.

The Customer Effort Score and contagious complaining

In the never-ending quest to find new ways to measure a company’s success with its customers (and to earn fees for the consultants that promote them), the Customer Effort Score has become one of the more fashionable tools.

What is the Customer Effort Score?

For some years, companies have been exhorted to delight their customers – the idea being that delighted customers become loyal and tell their friends how good the service / product is.  This approach has given us the popular and fashionable Net Promoter Score, for example.

The idea behind the Customer Effort Score is that most customers of most companies won’t be delighted if they receive great service – and that therefore a company should instead focus on avoiding bad service.  The Customer Effort Score is a measure of how much effort a customer has to make in order to get a problem fixed.  We have all had problems with suppliers that take up huge amount of our time to get fixed, and the idea is that if a company can just minimise the difficulty of getting problems fixed, that will strike the right balance between customer dissatisfaction and funds invested in customer happiness.

That seems to make sense – especially, dare I say it, for corporate behemoths that never had a hope in hell of delighting more than a select few anyway.  And it particularly makes sense for those products that consumers largely consider as hygiene factors in their lives (i.e. the consumer only notices them by their absence or non-performance).

BT’s ‘Net easy’ implementation of the Customer Effort Score BT have been using the Customer Effort Score (CES) for some time, and find it useful for evaluating channels – but only when taken with other measures such as the Net Promoter Score.  Calculation of the score is fairly simple, as the graphic shows – however BT and others underscore the importance of asking the questions in the right way.  CEB tested a number of question variants and found the difference to be striking, as one would imagine.  Remember that CES only measures effectiveness of customer care – if the car you bought drives like a sack of spuds or poor infrastructure means your broadband is slow, good customer care processes won’t fix the problem.

Complaining is contagious

A huge part of the value of delighted customers – and the cost of unhappy punters – is in the fact that we tell our friends about our experiences.  So which has the bigger economic effect – sharing horror stories or evangelising?

mind of consumer

We know that when a person feels passionately positive about something, she is likely to share the information with her friends.  From the success of Paul the Apostle (a fine word-of-mouth marketer if ever there was one) in spreading the Christian message to Idiro’s awards for driving uptake of iPhones, we know that passion drives commitment.  However the big issue for companies is that most companies have very few passionate fans.  For most products, the number of evangelists is tiny or zero.  Mr. Fishburne‘s cartoon, above, paints it well.

For every 100 who complain, another 170 friends will also complain
Friends of complainers are much more likely to complain themselves

However, complaining is much more common – and it certainly is contagious.  Research conducted by Idiro has shown that people who complain about their mobile phone operator are highly likely to associate with other complainers – or to encourage their friends to complain also.  In fact, Idiro found that friends of complainers are 70% more likely to complain themselves than are the rest of the customer base.  Backing this up are others’ research findings that customers are more likely to share negative stories than positive one (examples here and here).

Conclusions

Because complaining is so viral, and because typically there is a lot more customer dissatisfaction than evangelism in the customer base, then the Customer Effort Score is a worthwhile measure – particularly where customer service interactions represent a significant part of the customer’s product / service experience.

However, the CES only measures the quality of problem resolution / customer service interactions.   Clearly, other measures must be used to assess the rest of the customer proposition against customer expectations and competitive offerings.  And one useful empirical way to research both the complainers and the evangelists is to measure the word-of-mouth about your product: who is talking, about which product, what are they saying, and where are they saying it?  And if your business has data on your customers’ social links, Idiro can help you turn it into marketing insights.

Great Word of Mouth case studies from the nineteenth century

At Idiro, we are constantly searching for word-of-mouth case studies to help our customers understand and apply best practice in word-of-mouth and influencer marketing, in order that they gain maximum value from Idiro’s social network analysis service.  Here are some instructive examples from the past. The New Yorker recently published an article by Atul Gawande about how two innovations – anaesthesia and antisepsis – revolutionised medical science.  One – the use of ether as an anaesthetic – spread quickly through the medical community, whereas the other – the use of hygienic practices by surgeons to minimise infection – took far longer to be adopted as a standard. The reasons for this difference, as set out in Gawande’s article, are instructive for anyone involved in word-of-mouth marketing. The use of ether to remove pain was relatively simple to implement, made the surgeon’s job easier, and the patient’s experience infinitely less unpleasant.  Doubtless the benefits of anaesthetic spread among doctors and patients by word of mouth and would have translated quickly into economic pressure on doctors to offer this value-added service.  Anaesthetic was good for business.

Joseph Lister

Joseph Lister’s breakthrough in antisepsis was an equally simple idea: sterilise everything in the operating room to reduce dramatically the chance of infection during surgery and consequently to improve patient survival rates massively.  The benefit of antisepsis is even greater than that of anaesthetic: survival.  The benefits were proven by Lister and others.  However the causal relationship between hygiene and high survival rates, while proven, was not plain for all to see, as it was for ether and pain relief.  In those days, surgeons used to operate in clothes stained with the blood of earlier patients as a demonstration patient volume.  Moreover, strict hygiene demands time-consuming processes and attention to detail.  Sterilising instruments, the room, clothes, hands – these are practices that some medical professionals neglect even today.  And if a patient dies after surgery, who can be sure that she would have lived if strict antisepsis had been applied?  Because the germs are invisible and antisepsis requires the surgeon to a) give up a symbol of his job and b) spend time and money sterilising everything, inertia was strong and widespread adoption was very slow. So what can word-of-mouth marketers learn from these two contrasting stories?  First, even if an innovation has major proven benefits, its speedy widespread adoption is by no means guaranteed.  For innovations such as Frank Whittle’s jet engine (1930) and Alexander Fleming’s penicillin (1928), it took a crisis (World war 2) to gain wide adoption.  If your new product requires a significant change in user behaviour or (worse) a change in their beliefs or values, then marketers must make the new behaviour easy to adopt and provide hard-to-deny-or-ignore proof of the benefits. If uptake of your great new product is slow, carry out research into those in your target market who have declined to adopt your product.  Find a way to show clear evidence.  Look for a segment with less inertia or a greater need, and sell your innovation to them – or identify and sell to innovators, as Sony did with the Walkman. Redesign your product or your communication.  London doctor John Snow, who happened to also be a pioneer of anaesthesia, faced massive problems convincing the establishment of his discovery that cholera was caused by contaminated water, and not miasma as generally believed.  His pioneering use of maps to communicate the link between water sources and cholera infections helped convince powerful sceptics – and saved thousands of lives.   Many valuable innovations face scepticism, indifference and inertia.  Overcoming this takes careful planning.  Idiro can provide you the expertise in word-of-mouth marketing to ensure you gain the best advantage from Idiro’s powerful analytics.

Will smartphones continue to be highly viral?

A recent article on smartphones in Totaltele.com says:

“Smartphone technology has swiftly reached the point where most future improvements will be incremental. This means that from now on launches of new smartphones will be about as exciting as the latest operating system from Microsoft. This means the primary reason to buy a new smartphone is because you just dropped yours in the toilet.”

Which begs the question – will smartphones continue to be highly viral?  Or, put another way, when people buy smartphones, will this continue to cause numbers of their friends to follow suit, as it currently does?

The iPhone - six years and counting, and still highly viral
The iPhone – six years and counting, and still highly viral

Virality level can be defined as the extent to which one person’s purchase of a product (or any other behaviour change by a person) influences their friends to follow suit.  Some products are highly viral, most are much less so.  Idiro has been measuring the virality of many products, including mobile phones, since before the launch of the first Apple iPhone in 2007.

Over that time, smartphone virality has stayed consistently high, within specific brands and across the smartphone product category.  What this means in practice is that:
– If you buy (for example) an iPhone or a Samsung S4, your friends become much more likely to buy the same model of phone
-Even if they do not, there is a strong likelihood that your friends will be influenced to buy a different brand of smartphone.

Idiro works with mobile operators worldwide to  reduce churn, increase ARPU and acquire customers. In 2008, we won awards for our work on smartphones with Telefonica O2 UK.

So, will the high levels of virality shown by smartphones continue?  It depends on what is driving the virality of smartphones.  Our guess is that in OECD countries it will continue, though declining slowly, for a couple of years at least, until the market for smartphones is saturated and the evolution of apps has stabilised.  The virality of smartphones seems to have as much to do with the extra functionality and benefits as it does with the phones themselves – and that’s down to apps as well as features like NFC.

On the other hand, some new personal gadget could come along with a whole new set of features and benefits.  If such a device can usurp the central role of the smartphone as a personal communication / entertainment / information tool, then the buzz about smartphones will transfer to  them and a whole new wave of virality will begin.

Interesting word-of-mouth case study at U.S. Cellular

Here’s a refreshingly different take on using influencers to generate word-of-mouth and thereby increase revenue for a cellular telco.

U.S. Cellular: Local Relationships Support National Goals, presented by Sherri Maxson and Jessica Masterson from SocialMedia.org on Vimeo.

Too often we think of social influence in large-scale terms.  Here’s an example of a mobile operator doing influencer marketing – starting small and building a community around influencers at local level.  Now, it strikes me that that this success won’t be easy to copy – it requires a person like Sharif with strong social media and leadership skills to make the project work – and even then, I’d bet that even U.S. Cellular found it difficult to repeat the success in other locations.

However, I particularly like two points: firstly, the mix of social media activity with real-life face-to-face events – and secondly the fact that the program increased revenue markedly (a measure missing from many social media case studies).

A strong, focussed social media approach fits very well with the use of Idiro’s Social Network Analysis technology to identify the key influencers.  This knowledge should be combined with local knowledge by (in this case) the local store manager to identify the high influencers who will ensure the program generates the maximum word-of-mouth.

Big thanks to the folks at wordofmouth.org for their post which alerted me to the story.

The inherent weakness of online influence

In his latest cartoon, Mr. Fishburne has nailed it again, I think you’ll agree. These days anybody who is anybody (and quite probably anybody who is nobody too) gets plenty of lazy, unsolicited connection requests from people they don’t know.

2 people talking while crossing the street

And the questionable nature of online influence is not just a matter of connection spam. I have over 500 Linkedin contacts, none of whom are complete strangers. Would I be sure to recognise one of them at random, if she/he were to pass me on the street when I nip out for my lunch? Of course not! I’m human; I have an average memory for a human. Humans are governed by Dunbar’s number. As a result, all but a small group of my online friends / followers / connections are unlikely to influence me very much.

But it ain’t quite that simple. Offline interaction drives online interaction drives offline interaction so we shouldn’t write off online influence as unimportant. It’s just that face-to-face (or even telephone) relationships have a depth that online-only relationships very rarely match. That’s why I’m eagerly anticipating the publication of Ed Keller’s latest book on this subject. Here’s an interview with him by my friend Mr. Justin Kirby. So beware of the fashion for maximising your number of followers, friends or likes and look instead for real relationships and real influence.