A very interesting conversation took place last week on the Social Media Insider blog. David Berkowitz pondered the need for a advertising pricing model to better distinguish the relational elements of Social Media activities from more traditional media advertising models.

CPM (cost per thousand), CPC (cost per click), and CPI (cost per impression) are all examples David cites as existing traditional pricing models. Each of these models is based upon exposure, traffic, conversion, and interaction levels.

David offers up CPSA (Cost Per Social Action) as a social media metric from which an advertising pricing model could be based. David explains…

“The main benefit of CPSA is that marketers know they’re paying for something social and relationship-oriented. More importantly, marketers know they’re not specifically paying for exposure, traffic, conversions, or interactions (though those can all provide additional value). It’s an acknowledgement that social media is something else, so it’s deserving of a new model, one that stresses relationships above all else.”

Read the article in full and also read the comments. Readers have added-on to David’s original concept with lots of valuable insights.

I agree totally with David that Social Media (and Word of Mouth) marketing activities differ from traditional media activities because of the relational aspect. The pass-along measurement is huge with Social Media and Word of Mouth. If something isn’t pass-along worthy, then it fails to be socialable or talkable.

The problem as I see with this leads me to another WOM TRUTH …

It’s true. Marketers do not decide what’s sociable or talkable, people decide.

In 2005, WOMMA provided marketing agencies and brands with nomenclature and basic models for pricing and buying word of mouth marketing campaigns. At the center of the WOMMA Terminology Framework is the term WOMunit. A WOMunit is defined as a single unit of marketing-relevant information shared by a consumer.

I was never enamored with the term WOMunit. Still not. Here’s why…

A WOMunit to me might not be a WOMunit to someone else. What I find talkable about a brand or business, someone else might find boring and not worth talking about.

Case in point, MIGHTY FINE BURGERS in Austin. On my Brand Autopsy blog, I did a breakdown of what I felt made this local burger spot talkable. I included eleven talkable elements (or WOMunits if you prefer) of the Mighty Fine customer experience [see image]. However, these elements might not be deemed talkable to someone else. They were to me though.

Same thing goes for Social Media activities. Marketers can create videos, contests, and iPhone apps. However these activities will only become relational if they earn enough of an opinion from someone who is compelled to share it with others or interact with it online.

Yes. Measurement is important. Metrics are needed. And maybe the CPSA model is a vast improvement over the WOMunit measure. However, marketers must not get too entangled with metrics and lose focus on making their word of marketing activities more talkable. The more compelling and interesting marketers make products, services, and or brand experiences, the more people are likely to talk about it. (And the more data there will be to measure WOM success.)

Trending Topics on Twitter are viewed by marketers as a success measurement.

Positive Online Reviews are viewed by marketers as a success measurement.

Search Engine Optimization is viewed by marketers as a success measurement.

Yet, each one of these success measurements can be manufactured. Once someone has deemed a result worth measuring, someone will devise a way to manufacture that result.

Spammers are infiltrating Twitter trending topics and manufacturing results. Legit businesses like Squarespace have manufactured results. It’s a common tactic that is receiving backlash.

Lifestyle Lift, a cosmetic surgery company, published anonymous positive reviews online about its services (and got spanked for doing it). Belkin, a computer accessories brand, was caught paying people to write positive reviews about its products on Amazon.com

Unethical search engine optimization is rampant. There are countless ways websites can artificially increase their ranking and increase website traffic.

Yes. Any marketer can find ways to game the system to achieve desired results. However, is it worth it? Is the blip of success worth the stain of a brand forever living with a tarnished reputation?

If you believe your business has fallen into the “what gets measured gets manufactured” trap, consider using the WOMMA Ethics Assessment Tool. It’s a listing of 20 vital questions to ask to help guide your brand/business to making purposeful and ethical marketing decisions.

Charlene Li (Altimeter Group) and Ben Elowitz (Wetpaint) just released an interesting paper linking financial success with social media engagement. Their findings reveal, “… the most valuable brands in the world are experiencing a direct correlation between top financial performance and deep social engagement. The relationship is apparent and significant: socially engaged companies are in fact more financially successful.”

Li and Elowitz explain “it pays to be social” and the deeper a company engages with its customers in a variety of social media places, the more financial success they will find.

I’m not convinced their evidence is strong enough to make such a bold statement about the direct correlation between profits and social media engagement because the recession variable wrecks too much havoc on financial success models today.

However, I am a believer when the authors write, “Social media engagement and financial success work together to perpetuate a healthy business cycle: a customer-orientated mindset stemming from deep social interaction allows a company to identify and meet customer needs in the marketplace.”

And the more a company knows about the likes, dislikes, etc. of customers, the better they can develop products and services to meet their needs to drive business success. It’s basic but true.

Which brings us to WOM TRUTH # 17 … Be Everywhere Customers Expect You to Be. If your customers are heavy users of Twitter, your company should be heavy users Twitter. If your customers are heavy users of Facebook, your company should be heavy users of Facebook. If your customers are active users of Yelp, your company should actively use Yelp. If your customers are active users of {insert social media app here}, your company should actively use {re-insert social media app here}.

Word of mouth can only happen if a conversation happens. And the more places where conversations happen, the more opportunities for word of mouth to happen. And thus, it pays to be social.

This WOM Truth is a slight twist on a statement Steve Hershberger of ComBlu shared a few years at a WOMMA Conference. Steve said buzz may create awareness about a brand, but it will be evangelists and advocates that will keep the buzz alive.

As marketers we see this maxim in action often. Just a few months ago Skittles received a lot of buzz for their online antics. (You remember this, right?) It was a blip, nothing more … nothing sustained.

Denny’s created buzz with their Grand Slam breakfast giveaway. Again, a blip. A blip because I know no one today talking about how tasty Denny’s Grand Slam breakfast is.

On the other hand, there are countless businesses where customer evangelists create long-lasting buzz. These businesses treat word-of-mouth as an everyday business issue and not just a one-off marketing program. Examples are endless … Apple, In-Out-Burger, Method, USAA, Container Store, etc.

At this WOMMA Conference from the past, Steve Hershberger offered smart advice for companies wanting to work with brand advocates to create long-lasting buzz. His tips include:

Tip #1. Buzz doesn’t create advocates
Buzz may create awareness, with people saying, “Wow, I want to talk about this.” But they may or may not act on it. That costs brands time and money, because the effort that’s put into a buzz campaign the second time is the same as the first. It doesn’t have its own inertia.

Tip #2. Advocates create buzz
Creating advocates keep buzz alive. Advocates are the concentrated perfect customers. They understand the relevance of the product, and when people spread relevance — when they passionately recommend it with the force of their personality — that’s engagement and it spreads buzz.

Tip #3. Shut up and listen
Advocates will communicate with you via the avenues you give them. Sometimes those aren’t the best ways. Ask yourself if you’re creating natural pathways to communication or roadblocks.

Better yet, ask them. Many brands don’t distinguish between what they want, what their customers want, and what their prospects want. It only matters what the customer wants: they own the brand. They’ll tell you what drove them to choose you and stay with you.

Tip #4. Repeat what was said
If somebody tells you there was a problem, find out why. Too expensive? Couldn’t get through to customer service people? Hear them, then repeat the problem back to prove you understand their situation.

Tip #5. Act on it
You’ve heard what was said. You’ve repeated it back. Now, fix the problem.

It’s okay to say, “We can’t do that right now,” as long as they know you understand. For example, if they say, “I love your product but I can’t afford it,” you might respond that you only get a 15 percent margin on that particular product and can’t afford to reduce the price. Of course, it’s better to fix the problem if you can.
[SOURCE]

“For all the ink spilled on the importance of Twitter and Facebook as feedback an customer-service channels, there’s another social-media tool marketers are increasing finding useful … the humble product review.”  [source: Ad Age article]

We’ve all seen online ratings and reviews. We’ve all read them. Some of us have even added to them. But most of us probably don’t how effective online reviews are. As WOM TRUTH #37 touts, online reviews aren’t sexy, but the results are.

A December 2008 study from Kudzu.com revealed 86% of consumers seek out and read online reviews before making a purchase decision. 90% of these consumers surveyed said they trust online reviews they read. [source]

A report from the eTailing Group in June of 2008 showed that 32% of retailers who added online reviews to their website experienced an increase of more than 11% in purchase conversions. Of those retailers, 11% of them experience a 20% or more increase in purchase conversions. [source]

A sidebar to the Ad Age article quoted above gave marketers smart advice on how best to use and incorporate online reviews into how a company does business.

Embrace Feedback
“Both the positive and negative feedback provides hints to what your’e doing well and where improvement is needed.”

Act on Lowly Reviewed Products
“Assign a team to read all of the lowest reviews. Make sure it includes the right people who can react quickly and fix the problem—before more customers get riled.”

Involve the Customer Service Team
“Negative reviews can tip off your customer service and support teams to issues that they’ll soon be dealing with.”

The term “Social Media” is sexy. Twitter. Facebook. Blogs. All sexy in today’s marketing world where people are sharing opinions, insights, experiences, and perspectives with each other online.

A simple Google Trends search shows how much sexier a term “Social Media” has become compared to “Word of Mouth.” In early 2007, “social media” overtook “word of mouth” in online search activity.

The sexiness of social media also extends to which programs are getting greenlighted by marketing departments. Conversations I’ve had with WOMMA member agencies and brands tell me it has become far easier to gain budget approval for marketing programs sold as social media strategy than it is to get go-ahead approval for unsexy word of mouth programs.

I’m bothered by how “word of mouth” has become such an unsexy term.

As marketers we’ve lost sight that word of mouth is, was, and will continue to be social media. The term “social media” simply refers to the online digital manifestation of what has taken place for centuries in the physical world of person-to-person communication.

Word of mouth happens in physical ways (in person, on the phone) and digital ways (online, through email). Both ways are media. Both ways are social. Yet, both aren’t equal.

According to a Keller Fay study, 3.5 billion word of mouth conversations take place every day in the United States. About 90% of those conversations occur physically (in person, on the phone) while no more than 10% occur digitally (online, through email).

Today’s marketing world continues to behave a lot like yesterday’s marketing world where people share opinions, insights, experiences, and perspectives with each other through word-of-mouth. Nothing has changed there. Only the tools people use to pass along interesting information have changed, they’ve changed to include digital ways.

Seems to me word of mouth will always be the original social media.

Long after the tools of today (Twitter, Facebook, Blogs) fade away, person-to-person and voice-to-voice conversations will continue to be the driving force of word of mouth activity. Might not be sexy, but sometimes the truth ain’t sexy.

I’m starting a new series on the ALL THINGS WOM blog. Over the next couple months, I’ll be sharing bite-size lessons on key ideals that make word-of-mouth marketing more effective and ethical. It’s being called WOM TRUTHS.

This WOM TRUTHS series is somewhat inspired by NPR’s “This I Believe” essay series, which was based on a radio program hosted by Edward R. Murrow in the 1950s. However, this series is more than sharing beliefs … it’s sharing truths.

A belief is more of a hypothesis while a truth is a fact. And the facts we’ll discuss will be based upon personal lessons I’ve learned as well as lessons learned from current happenings in the world of word-of-mouth.

Stay tuned. WOM TRUTH #55 gets posted on Tuesday.