April 15, 2008
BY MICHAEL KRAUSS
Rand, CEO of Zócalo Group, a new division of Ketchum and
Omnicom, has a message for H. Lee Scott, Jr., CEO of Wal-Mart
and leading C-level executives like Jeffrey Immelt, CEO of GE,
and Richard Wagoner Jr., CEO of General Motors—start thinking
about word-of-mouth marketing campaigns.
a company gets as big at Wal-Mart,” Rand says, “their
story doesn’t get told at a human level. There are people
who are incredible fans of Wal-Mart. What you always hear is the
negativity. Wal-Mart does many wonderful things, but that story
rarely gets told.”
If he could
say one thing to a C-level executive like Scott, he’d say
this: “You can positively begin shaping how people are talking
about you and recommending you in ways you currently are not doing.”
Rand is not
blaming the media or pressure groups for piling on Wal-Mart. He
simply believes that companies need to start applying word-of-mouth
marketing techniques for their own advantage.
92% of Americans say that the number one place they go for information
on new products and services that drives purchase is friends,
families and people they trust, that’s overwhelming evidence
that word of mouth can’t be ignored,” Rand adds.
Rand worries that C-level executives are more comfortable with
traditional marketing mechanisms like advertising and promotional
programs, but these may be ineffective. “You can reach buyers
through paid means, but does that drive recommendation, or does
it simply drive one-way communication?” he asks.
Rand is a
seasoned agency executive and entrepreneur who founded Zócalo
Group in Chicago in 2007 because he believes C-level executives
need guidance and support applying word-of-mouth marketing techniques.
He structured Zócalo from the ground up to make the case
for word of mouth and to help C-level professionals put the techniques
When it comes
to word-of-mouth marketing, many C-level executives are skeptical.
Word-of-mouth marketing feels amorphous, soft and fluffy. CEOs
want fact-based, measurable outcomes from their marketing investments.
CFOs like to watch the click count go up when you start your online
advertising programs. COOs feel good when cash register results
spike right after you drop a direct-to-consumer purchase incentive.
marketer learns in Marketing 101 that the best advertising is
word of mouth. Rand wants to drive that point home and convince
executives that word-of-mouth marketing is methodical and measurable.
Zócalo Group, Rand has put in place a series of proprietary
templates and frameworks that he uses with clients to establish
a strategic and tactical approach to word-of-mouth marketing.
The key principles
common to his word-of-mouth programs are:
a position: Articulate an ownable position for your
the story: Create a sharable story that puts your case
influencers: Define and connect with the advocates,
including customer evangelists, industry thought leaders, recommenders
and determined detractors.
Engage with the influencers online and offline.
Evaluate the program impacts.
Invest only in sustainable word-of-mouth programs.
Rand is a
fervent believer in measureable results. He links his agency’s
word-of-mouth programs to recognized metrics and business outcomes.
Many companies rely on Net Promoter Scores (NPS), a concept made
popular by Bain & Company’s Fred Reichheld.
captures a key metric for customer loyalty—a measure of
customer advocates less detractors. The NPS statistic is hailed
as the most important single marketing performance metric. Rand
has staked out a high-minded position for Zócalo Group.
He wants his clients to evaluate their word-of-mouth marketing
programs based on word of mouth’s ability to move the dial
ahead on the NPS score.
what it is you are going to measure,” Rand says. “In
most cases it is sales, referrals or the Net Promoter Score. Benchmark
on the things that are most relevant to your company or brand
before you start your word-of-mouth program,” he adds.
accountability for marketing investments is a refreshing position
for an agency executive to take, and Rand is in the vanguard.
has always been great consternation about measurability of many
marketing mechanisms,” Rand says. “Lately there’s
recognition that traditional ways of interrupting customers are
less effective. Consumers kept getting more control.”
about ROI and return on marketing objectives (ROMO) as two additional
ways to measure word-of-mouth marketing investments.
For ROI, Rand
encourages clients to launch split market promotional efforts.
He tells them to pump word-of-mouth efforts into 10 metro markets
and keep 10 control markets clear of word-of-mouth investment.
Measure the difference in sales results. Analyze the outcomes
and adapt and refine your word-of-mouth marketing investments.
clients to identify lead customers who build word of mouth and
get them involved with coupon sharing promotions. “It becomes
very traceable back to what we are doing.”
clients spend millions on a positioning. Their marketing objective
is to get customers using key words and phrases to describe the
brand. We check online and examine the conversations their customers
are having. For one client, less than 5% of conversations reflected
anything near the language the client sought. The ROMO was low.”
If you call
Paul Rand to talk about making word of mouth measurable and methodical,
be sure to ask him about the name of his agency. Zócalo
means town square in Spanish and has obvious allusions as a place
where word-of-mouth conversations occur.
presented the business case to Ketchum CEO Ray Kotcher and Omnicom
Diversified Agency Services division CEO Thomas Harrison, he was
set to name his new word-of-mouth marketing agency Revere Partners.
the Revere name because of the fabled way Paul Revere spread the
word of the British invasion. Kotcher and Harrison asked Rand
how the word of mouth might play out when he opened Revere in
London. Rand slept on it a night and came up with Zócalo
Good to know
Rand is nimble as well as methodical and analytical.
Krauss is president of Market Strategy Group, based in Chicago,
and can be reached at Michael.Krauss@Mkt-strat.com