Insights on Marketing & Technology

In search of a rental car...

The first 10 times I call Rob Fuggetta, there is no answer. He doesn’t pick up. Every time I try, his cell phone transfers the call to his answering machine, which keeps repeating that the voicemail of Rob Fuggetta is full. I, once again, check that I’m calling at the time, we agreed on. Yes, 11 am.
Finally, on the 11th try, he is picking up. It turns out that he has just landed in Orange County in Los Angeles.
- Well, I’m here with a college of mine and we’re now trying to locate Hertz to pick up a rental car. We have to be in San Diego later this afternoon for the American Marketing Associations conference. I’m giving a talk there.
- So is this a bad time, should I call you back later?
- No, no. Now is fine. We just can’t seem to find Hertz Car Rental.
- So, in your new book “Brand Advocates” you talk about how companies should build an army of trusted advocates in order to created engagement around their brand? Why it that?
- That is because paid advertising doesn’t work anymore. Did you know, that you are more likely to have twins, than to have someone buying from you through a banner ad? Paid advertising is simply not working. Then, you might ask, why are companies still buying these ads? It’s because there has been created a whole industry around it. But it really doesn’t work.
- But brand engagement through word of mouth marketing is working?
- Yes, word of mouth is, and has always been, the most trusted marketing you can get. Up to 92% of consumers trust word-of-mouth recommendations, but only 24% trust online ads. A recommendation from a trusted friend conveying a relevant message is up to 50 times more likely to trigger a purchase compared to other recommendations. 25% to 40% of all traffic and lead generations comes from word of mouth. Shoppers prefer retail web sites that feature online ratings and reviews over ones that don’t. And … hold on for one moment, we seem be lost. Can I call you back?
- Sure.

Fake reviews
I spend the time waiting for Fuggetta to call me back by reading the local newspaper, the San Francisco Chronicle. The front story in the business section is about how companies are cheating online, when it comes to ratings, reviews and other word of mouth marketing methods. Eric T. Schneiderman, the New York attorney general, has investigated 19 companies for posting deceptive reviews on their websites. “When you look at a billboard, you can tell it’s a paid advertisement - but on Yelp or Citysearch, you assume you’re reading authentic consumer opinions, making the practice of fake reviews even more deceiving,” says Eric T. Schneiderman to the reporter. His investigation has revealed a web of deceit in which reviewers in Bangladesh, the Philippines and Eastern Europe has produced buckets of praise for places they had never seen, in countries where they had never been.
When Rob Fuggetta is back on the phone, I point to this critic of his word of mouth marketing philosophy.
- Yes, I read that story as well. But first of all, sites like Yelp and others are doing an increasingly better job of blocking fake or paid-for reviews. In many cases, you have to be a trusted person on these sites, to state our option at all. And that is important. Schemes that are generating referrals by paying or incentivizing people are not true advocacy. True advocacy cannot be paid for or manufactured, but only earned. What is why it is called “earned media”.
To this date my own company, Zuberance, has generated 30 million brand and product recommendations and no advocate has ever received anything in exchange for their recommendations, says Fuggetta.

A marketing force
- And what kind of industries is best suited to use brand advocates?
- We have about 100 brands that are on the Zuberance advocate platform. And interestingly enough, about half of them are B2B companies, and half are B2C. But interestingly enough, like I said, about half of our customers are actually B2B companies. And in somewhat you might consider to be very low passion categories.
Some of our B2B customers include companies like Intuit, Symantec, NetApp and Citrix. And these are categories that you would think that there’s not a lot of passion around, but what we’re finding is that among all of B2B companies, actually a significant percentages of their customers are highly likely to recommend them. But many B2B companies just aren’t doing anything with these advocates.
The other half of our customers include consumer brands like GMC, Lexus, Buick, Rubio’s, Hard Rock Hotel and Casino, and many others. TiVo and and many others. So it is both B2B and B2C brands across multiple industries.
But overall we’re finding there is a lot of companies in travel and hospitality, consumer electronics, health and fitness, consumer brands and consumer products, that are very interested in finding their advocates and leverage them to become a marketing force for their brand.

The centerpiece of marketing
- Get them to “like” your brand on Facebook and other social media sites?
- Well, brand advocates are something very different from social media fans and followers. Just because someone clicks on a “like” button doesn’t mean they will recommend you. It’s the lowest common denominator.
As you probably know, on Facebook, they’ll provide you with a couple of metrics. And one of those is the number of people that have liked your brand. And by now I think everyone’s pretty aware that the number of fans or likes you have is actually pretty meaningless, unless you do something with those fans and followers.
So companies have gone through that phase, now. I would say chapter one of social media marketing was to build a social audience. And for the most part that’s been done. That rapid growth in company’s social audience is starting to plateau.
And so chapter two, now, is, OK, now we have fans and followers, what can we do with them? And the most valuable thing you can do with your fans and followers is to find those super fans, or as we call them, “brand advocates”, and then give them the tools to recommend you.
- By using them as brand advocates?
- Yes, brand advocacy is really just a fancy term for word of mouth marketing. And you know, we all know, that there is nothing more powerful than a personal recommendation. And that word of mouth has always been the most powerful sales tool. And of course, it used to be that word of mouth happened around the water cooler. Today it happens online, on places like Yelp and Tripadvisor and and Facebook and Twitter. So word of mouth is now amplified. And every company, whether you do this via Zuberance or anyone else, every company ought to be looking for ways to make word of mouth marketing - earned media - the centerpiece of their marketing.

Google’s money machine
- Earned media has always held value, but in the always-on social world, consumers’ experiences with each other can make or break your brand almost immediately. Conversion rates using earned media are higher and ROI is undeniable. Earned media offers the highest value to both brands and consumers due to its trust-ability and growing reach. This, in turn, drives conversion rates and ROI. When compared to traditional paid media, which yields conversion rates of 1% or less, companies that replace their paid media with trusted, highly effective earned media see conversion rates of 5% or higher.
Still, many companies are spending a significant chunk of their marketing budgets on paid media in order to generate leads and clicks via paid search and other traditional digital marketing tactics. When you consider that companies are paying $5 to $250 per lead, and the effective rate they’re paying for clicks can be as high as $2 to $6, it just doesn’t always seem worth the investment. While lead generation has improved via traditional marketing tactics, the truth is that much of this investment yields low results. But companies continue to feed the Google money machine, even though only a tiny fraction of that investment ever turns into sales.

A successful brand
- Higher ROI is possible because earned media is cost-effective in the sense that companies don’t pay directly for the content like they do with paid content. Instead, the investment comes from building a relationship with your customer and by identifying and rallying your brand’s advocates to spread word-of-mouth recommendations.
Earned media is changing the way we view our brands and business models.
But while earned media should be central in your marketing efforts, it doesn’t mean that other forms of media should be ignored. Earned media should be used in tandem with paid and owned media for the best possible outcome. Many companies are already using earned media content within their paid or owned media channels by highlighting online ratings in advertising or by streaming Twitter content on their web site. And paid media can act as a catalyst for earned media by fostering awareness and engagement.
Though you can’t buy earned media, that doesn’t mean it’s free. The rules for building a successful brand haven’t changed. Your products or services must speak for themselves and that requires commitment and effort. But by shifting attention to earned media, brands can build deeper long-term relationships with their most-engaged customers, which will have lasting benefits in terms of ROI, rewards, and revenue. 

Rob Fuggetta

Rob Fuggetta is the driving force behind the Advocate marketing company  Zuberance. Rob Fuggetta is a 20-year veteran of Silicon Valley and has played a leadership role in three start-ups including Genuity, which went public in June 2000. Rob was formerly a partner at Regis McKenna Inc., the legendary Silicon Valley marketing and communications firm, where he co-led the global Apple business. Rob is the author of "Brand Advocates: Turning Enthusiastic Customers into a Powerful Marketing Force," published by John H. Wiley & Sons, Inc.