Mark Rogers recently did a podcast for the company Knexus looking at the next generation of social marketing. We looked at how to do social marketing using case studies from Cadbury, Sony, Avis and H&R Block, and assessed how to measure the results. Here is the deck to accompany the podcast.

It has long been rumoured that much of the success of the Bush campaign in 2000 and 2004 was down to their superior understanding of social networks. Now a chance remark (highlighted by Valdis Krebs) by Bush’s campaigning guru Karl Rove on Obama’s election campaign draws attention to this.

Barack Obama’s manager admitted to the New York Times that he wanted an “army of persuasion” modeled explicitly on the massive Bush neighbor-to-neighbor “Victory Committee” of ‘00 and ‘04. Those efforts deployed millions of volunteers to register, persuade and get-out-the-vote. Sen. Obama’s organizational emphasis wisely avoids the Democratic mistake of 2000, when Donna Brazille’s plea for a stronger grassroots focus was ignored by the Gore high command. It also avoids the mistake of 2004, when Democrats outsourced their ground game to George Soros’s 527 organizations. The latter effort paid at least $76 million to more than 45,000 canvassers – many hired from temp agencies – to register and turn out voters. It was the wrong model: Undecideds are more likely to be influenced by those in their social network than an anonymous, low-wage campaign worker.

The emphasis on social networks shows what many have long suspected, that the study of social network dynamics, including the mathematical models deployed by businesses like ours, was trialled in the war-rooms of the Bush-Cheyne campaigns of 2000 and 2004.

The key characteristics of these learnings were:

• Don’t rely on mainstream advertising to change hearts and minds - work through existing social networks;
• Identify issues that go to the heart of your targets preoccupations, and hammer your stance on these home;
• Organise in ways that empower the grass roots, not the central command.

It worked for Bush and Cheyne and now it’s working for Bush and for big brands. The key message that Rove is stressing is that paid-for messages are not as effective as recommendations from within a social network.

A key example of this occurred recently in the case of Market Sentinel client Avis. When they launched their blog one of the early commentators posted a comment highly critical of the initiative: what was the blog doing, he demanded, to make the company more effective, how would it address his specific customer service problem? The Avis folk responded to this challenge with a detailed explanation of how the blog was part of a broader initiative to do a better job with customers, to explain, to listen and to fix specific problems (and they fixed his). When on one of the better-trafficked forums used by international business travellers, a commenter highlighted a customer service issue with Avis the same previously hostile commentator responded - defending Avis and directing the complainant to the UK blog where the management had shown themselves so responsive. That’s grass roots advocacy in action. More effective than paid communication, precisely because it is unpaid for.

What Karl Rove knew yesterday, Obama and Avis know today: it is better to have others do the persuading for you. Understand and meet their needs and they are a better salesforce than money can buy.

A lot of brands are dipping their toes into social media marketing. They naturally want to know what ROI they can expect. For that reason we are delighted that our client Avis UK has gone public with the results of their 2 year experiment in monitoring and responding to online conversations. They are experiencing double digit growth in a sector (car rental) that is growing at 1% per annum. They attribute much of this to their online actitivity, which shows that social media marketing can have a direct impact on ROI (details here). Kudos to Xavier Vallée, Rob White and their colleagues and thanks to our partners at Web Liquid - Avis’s digital agency.

Department store John Lewis have announced that whilst their rivals may be suffering, they are growing market share. The Nationwide building society has seen a surge of deposits recently, partly the effect of the Northern Rock collapse.

Both businesses are growing market share during a slowdown. What is it that links them? In news links Nationwide talk about the quality of their assets, John Lewis MD Andy Street is not quoted as providing a rationale.

Our research points out some common features. What both businesses have in common in terms of consumer generated conversations is that:

a) positive commentary on them tends to contain specific customer recommendations and endorsements. A customer who is complaining about his ISP takes time to say something postive about Nationwide, an entire thread on MoneySavingExpert is entitled John Lewis are bloody marvelous and backs it up with facts;

b) negative commentary involves isolated problems: someone complains about a silent call from Nationwide’s call centre; a thread that starts John Lewis sucks big time, turns into a plug for their customer service as - just as several posters predict - John Lewis deal successfully with a horrible customer service issue.

This is by no means a common feature. A PR client came to us a few days ago on behalf of a business whose online commentary was positively sulphurous. There were no positive comments whatsoever, and the negative comments included threats of legal action. The company apparently thought that it had a “reputation” issue. Our suggestion was that it had a product issue. This is an ostensibly healthy company, but I would fear for it during a recession.

The common threads linking Nationwide and John Lewis is that they seem to provide great customer service and great customer service drives positive word of mouth. Both companies Net Promoter Indices are comfortably ahead of their sector average. And they are demonstrably growing market share in a chilling market.

When we helped Avis launch their We Try Harder blog - it was a joint venture between customer service and marketing. The point that Xavier Vallée and his colleagues at Avis understood is that customer service issues - correctly handled - are the key to having a great reputation. No one is perfect, but if your service is responsive and prompt, you are forgiven and endorsed. Avis, like Nationwide and John Lewis, are growing their market share.

Attending the EyeForTravel conference in Berlin, most of the talk is about Web 2.0, how brands can connect with their customers, can allow customers free voice (that is: allow and respond to negative comments) and still achieve marketing goals: growing brand loyalty and business.

Reaching out to one’s customer base through an online community strategy is important, but the impact tends to be (as Sam Shank of Sidestep demonstrated) at the top end of the buying funnel. There is increasing evidence that organic search results matter, even in the context of paid search strategies. Organic search is where a lot of review-type or user-generated content ends up, and where the ROI of any brand campaign using social media will be tested. Research from Web Liquid - quoted by Geraldine Calpin of Hilton - suggests that there is a 22% uplift in click-throughs on paid search if the brand is present in organic search.

This is the proof of the pudding for our business. The value of online market research is only in what you do with the evidence you find. We were at EyeForTravel with customer Avis UK. Their We Try Harder blog was an explicit response to our research. Avis have seen double digit growth in a market that is growing at 1% per annum. We think some of that is attributable to their social media work. Studies like Web Liquid’s seem to support that.

We published this press release today:

AVIS UK WINS INNOVATION AWARD FOR SOCIAL MEDIA PROJECT

Avis UK has won the SOCAP award for innovation in Customer Service at the National Customer Service awards dinner held in London on 18th September 2007.

Avis UK’s work involved monitoring and benchmarking consumer generated content and making changes to its product and customer service practices in response, culminating in launching the We Try Harder blog. These changes have resulted in big increases in the approval rating for Avis (the Avis Net Approval Index has increased over 200% and remains well ahead of the competition) and key product innovations.

Market Sentinel provides the technology for CGC research and guidance on blog editorial.

Market Sentinel CEO Mark Rogers said yesterday: “The phenomenal growth of social media over the last few years has left many companies scratching their heads. Many congratulations are due to Eibhlin Payne and Xavier Vallée of Avis UK for demonstrating to others how to use statistical methods to understand social media and develop insights enabling them to forge real links with customers. We are very proud to have contributed to Avis UK’s success in creating a genuine partnership between marketing and customer service. Many thanks are due to Sheila Sang and Caroline Harris who worked so hard in helping Avis launch the We Try Harder blog, to Mathew Vattolil whose analysis drove decision-making and to our partners at Web Liquid, Matt Cronin and David Shiell who had the vision to bring the project to life, to Xavier Vallée and Eibhlin Payne themselves for commissioning the work and to Rob White for his tireless efforts in bringing it to reality”.