Ed Keller is CEO of NOP World Consumer and co-author of The Influentials. His after-lunch session, delivered to an almost-packed room, explored the demographics and psychographics of influential Americans, as well as what marketers can do to better reach — and work with — these decision makers and agenda setters. What follows is a partial transcript of his talk at Ad:Tech:
Whenever we ask people what their biggest challenge is, they say that it’s doing more with less. At a recent conference, Jim Stengel, global marketing officer for Procter & Gamble, said that there is no more mass in mass media. We need new channels to reach consumers. But a lot of this isn’t new. Some of the research I’m going to share is decades old. What is new is the imperative.
When Americans make decisions today, it’s a conversation. Marketers need to reach the people who start these conversations. In 1977, word of mouth was valued somewhat more than advertising and editorial. People get their best ideas from talking to people. At that time, word of mouth had a slight edge, but they were all pretty much in the same ballpark. Now, word of mouth is one and a half times more important than it used to be. Advertising and editorial haven’t fallen off the map, but word of mouth has zoomed ahead. That happened in the middle of the 1990s.
Marketers need to reach people who are in the center of the conversation. Friends, family, and other people are the leading source of ideas and information on restaurants to try, places to visit, improving your health, Web sites, and almost every single product category. If it’s not number one, it’s number two and coming on stronger.
Certain people are in the center of the conversation, and it’s not the top down elite we used to focus on. They’re people like Sophie Glover; Larry Lee, a State Farm agent whose friends call him “the mayor;” performance artist Leonard Pitt; and venture capitalist Tim Draper.
All four of these people have things in common. They exercise influence and control the levers of change. They are politically and socially active. They’re part of 21 million Americans — 10% of the American population. And they’re not today’s fad. They’ll be a force in the marketplace for more than 30 years. At Roper, we’ve been researching these people for 50 years.
Influentials are actively involved. But more importantly, what drives them? They take an active approach to life. They have an enthusiasm for learning. They’re connected to many people and groups. They have a clear set of priorities. They have a strong belief in growth and change. These aren’t people who get comfortable. And they have the ability to create change. Demographically, they’re largely average, but they are more highly educated. There’s something in the college phenomenon.
How well connected are they? The average influential is associated with more than twice as many groups as the average American — seven groups versus three. If most of us have a fairly close social loop, if we’re discussing a new product, it’s you and me and me and you. It doesn’t go that far. With influentials, they’re in a conversation with a different group of people who are in a different social circle. They tend to hear about things ahead of others. They have more well thought out ideas because they’re always in a dialogue with other people and taking in different points of view. And they are network hubs for other people. Either they’ll know an answer themselves, or they’ll know where to find an answer. In the buzz marketing arena, it’s not about the amount of buzz, it’s about the distribution of buzz. Influentials are distributed much more broadly through their communities.
There are three key reasons why the influentials matter. They are leading indicators of consumer trends. They are consumer advocates. And perhaps most importantly, they are market multipliers.
In terms of being market trendsetters, consistently, the influentials tend to be two, three, and five years ahead of the curve. But they are not the earliest adopters. They’re the early majority. Early adopters don’t necessarily have the broad social connectivity you need to throw an idea forward. They led the way in personal computers. In the ’80s, they led the way with catalog shopping. They also fueled the online shopping phenomenon. We see this in area after area, like in hybrid cars now.
Influentials also drive marketplace acceptance and rejection. They’re highly discriminating consumers, and they will speak their mind. In any given moment in time. 40% of influentials have had a problem with a product or service in the last three months. They have a higher threshold for what a quality product or service should be. And they’re more than twice as likely to do something about it. They’ll complain in person. They’ll write you. They believe that they have the right to do something if something doesn’t go right. Don’t consider your complaint line calls nuisance calls. They may be influentials who could talk about how you took care of their problem and what a great company you are. But it’s not all negative. People will get behind ideas, products, and services, and they will become advocates on your behalf. Get the Leonard Pitts’ out there involved and engaged.
The last of the three reasons is that they are market multipliers. When your advertising effectively reaches the influentials, your message will go further. This isnt to say that influentials are experts about everything. But they are at the center of the information hub. What they don’t know, they know someone who does know, and they can put you in touch with that person. Take the influentials and combine it with people who have a real passion for a product category.
We were interested in seeing if word of mouth was accelerating or dying out. Word of mouth is continuing to pick up strength. And the economy is picking up strength, so people are talking about more products and services. Look at health issues. The influentials were the first to experiment with and get behind low-carb diets and gene mapping. That’s not to say they’ll stay with the diet, but they are reading about it and talking about it.
How does influence work? Influentials don’t think about themselves as being influential. Influence is natural and serendipitous. They do know that they make a lot of recommendations. Most ideas come out of conversations, with people building on what’s just been said. It’s not that they’re there, pigeonholing you and telling you what they think, you’re asking them about something, and the conversation goes back and forth. And what they learn from you, they process and take to a new group of people.
The best brands make their mark with influentials by offering high quality products and services — and a brand that they can trust. That’s the same for average Americans. But they go on and add new things: unique and original ideas, brands that are friendly and responsive to customers, that make them feel their life is meaningful and enriched, that make them feel like a trendsetter, and that stand for values associated with creativity, adventure, learning, honesty, and fun.
From a marketing point of view, there’s no question that the Web has enabled a lot more conversation to take place. Influentials do watch TV, but they tend to watch with a little different motivation. Where they’re really higher than the average American is with magazines and the Internet. There are also great opportunities to reach influentials through direct-to-consumer marketing programs such as loyalty programs, beta testing new products, and sampling.
But when you’re marketing, your messaging needs to be right. It can’t be one way. You need to invite them in. Link them to other sources; don’t just keep them in your own Web site. Get them engaged in a dialogue. Make sure you listen to them. Focus on the community and doing the right thing a la cause marketing. These are people who want to be empowered. And lastly, respect their knowledge. Assume that they’ve done their homework. You can’t assume that they’re going through one channel alone.
What makes a good ad? Influentials do see advertising as a source of information. They’re not anti-marketing, but they look for ads that are real and reflect life accurately. Ads need to be informative, useful, and meaningful. Ads can be engaging and inspiring, and they need to link to more sources.
This is a global phenomenon. Social networks don’t work the same way overseas as they do here, but after two false starts, we think we’re close to mapping how this works around the world. On a global basis, influentials are still twice as likely to give recommendations or advice. A two to one and sometimes three to one ratio seems to hold.
Not only can influentials help advocate your brand through word of mouth, they can help indicate new market opportunities, identify new product needs, and position old products. If you listen to the influentials and get them engaged with your products, you will get them involved — and you will succeed with your products and services.