Introduction

The following and attached posts were written over a pain-killer inspired 48-hour period a couple of years ago while recouping from a knee surgery. These post capture some thoughts and ideas that were on my mind in the weeks after my 18-month stint ended as Yelp’s first marketing VP in May 2008. While some ideas already sound dated, others are standing the test of time.

Table of Contents of this site (posts to be read in no particular order):

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Let’s try and define “marketing” shall we?

There isn’t a business term that I know of that means so many different things to so many different people than the term “marketing.”

Particularly in the industries that I’m most familiar – namely growth-oriented consumer Internet companies – there is a vast spectrum of opinion about what marketing actually is.

In one alarming trend (for marketing weenies like me), there’s an observable groundswell within parts of Silicon Valley that has eroded, in some cases, the importance of the function and role of marketing. The notion is that marketing strategy and programs are superfluous (and soft) in the face of simply beta launching world-class products loved by their audiences. This perspective is especially true, I’ve found, amongst the ever-growing cadre of technology-oriented founders, many of whom have emerged from the post-Google world – a company founded and run by engineering talent and who have created the world’s most financially valuable brand (recently valued at $86 billion in brand value) in an organization with a single VP with the word “marketing” in their title out of 54 listed top executives.

Which is, frankly, hard to dispute. But, we’ll get to that later.

In the meantime, in the interest of contextualizing the discussion on endorsement marketing a bit, humor me in allowing me to share my thoughts on the definition of marketing itself.

The American Marketing Association (whoever they are) recently revised their definition of marketing in October 2007 as follows:

Definition of Marketing: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Wow, pretty rough stuff from a bunch of marketing experts who should know better about messaging and positioning.

Personally, I’ve landed on my own two definitions (yes, two definitions) of marketing which differ significantly based on overall scope, and are useful depending on the context in which you are thinking about marketing.

The first, which, a colleague aptly referred to as capital-M “Marketing”, is the broader act of bringing to market products or services that exceed the expectations of customers in addressing a real customer want or need.

The key idea here is the broader concept around “bringing to market.” With big-M Marketing, bringing to market piece holistically integrates (1) insights derived from understanding actual customer wants and needs, (2) developing awesome (and profitable) products and services that meet exceed those needs, and finally (3) getting the word out about these products and services in a way that will make customers actually pay attention, care, and act on them.

Let’s pause for effect here. It’s the basic fundamentals of building a real business, whether you are in the organic pickle industry or offering financial planning services. Markets are made when products or services meet customer needs. Full stop.

However, I dare say most people in business really only think that (lower-case m) marketing is solely about the 3rd part of this equation. For most people, “marketing” equates to “getting the word out” as measured primarily by how many new customers have you acquired.

People used to call this sort of stuff MarCom – short for Marketing Communications – and in big companies it’s not uncommon for MarCom to have entire dedicated organizations who focus exclusively on messaging to stakeholders (customers, employees, investors, partners).

MarCom folks sometimes get a bad rap for being spin-doctors who are seen as tradeshow-going, PR firm-picking, ad agency-schmoozing, color-picking, boondogglers who build brand-definition documents, throw parties, and only very occasionally gather actual customer insights through research.

Depending on how disconnected these functions can be from the broader Marketing objective, these roles can be death-traps. Particularly in today’s emerging consumer Internet companies, most of those activities listed above have become obsolete. They are expensive and especially un-measurable in terms of developing ROI (return on investment) on money and time spent. And because those activities tend to be fuzzy (i.e. difficult to measure and quantify), they especially don’t stand up well against modern “Internet marketing” techniques which rely much more on science than art.

While my general management instincts feed a personal bias toward being more big-M oriented than small-m oriented in nature, what matters most is that organizations and teams make sure that they are on the same page on marketing in regard to bringing stuff to market versus getting the word out. Word.

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Endorsement Marketing is the New Marketing

Black is the new black? Endorsement marketing is the new marketing? 40 is the new 40? Wait, what?

Let’s face it. When was the last time you tried a new restaurant, bought a book, picked a hotel, or went to go see a movie without having heard something great about it first? Have you ever actually picked up the Yellow Pages and chosen an interior designer based on their ad? Or, are you more likely to call or email your friend and as her who she used?

We are inundated with consumer messages on a near constant basis. Most of these messages are deemed by my hero Seth Godin as so-called “interruptive” messages – marketing messages that are literally designed to interrupt you in whatever you are doing to deliver a message (like a radio ad, or one of those annoying screens that you have to click through to read an online article that you want to read). Interruptive marketing is soooo marketing 1.0.

This cacophony of disparate messaging has made it really hard to get your message out there. Hence the emerging wave of emphasis on how to market in what some folks are calling today’s “Age of Recommendation” – getting your message delivered in the form of authentic endorsements from actual people, notably your customers and 3rd party trusted experts.

Let’s start by consider some of my favorite and successful modern-day consumer phenomena:

  • Zappos
  • Tivo
  • Prius
  • Clifbar
  • Google
  • In ‘n Out Burger
  • Yelp
  • JetBlue
  • LinkedIn
  • Trader Joe’s
  • Kayak.com

True, some of these products and services have some (and in some cases a lot) old school media advertising and behind them. But I’d argue that’s not what has what has made any of these, and other similar phenomenon successful.

The real success of these and others like them comes from exponential growth that’s derived from a phenomenon that some folks off-handedly refer to as “viral” marketing, but in actuality is slightly more nuanced.

When you think about it, viral marketing is really just the notion of something that grows exponentially on it’s own. But what’s really important is knowing what derivative is causing the virus to be viral in the first place. In the case of Hotmail, it was the “want free email” in the bottom of every email sent in a first-to-market webmail environment. When you combine something that’s viral with the concept of the so-called recommendation age, then I believe you truly have a shot at magic. Magic, that when fueled can be so powerful in its effectiveness that it merits it’s own marketing buzzword: “endorsement marketing.

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Endorsement Marketing: What it is.

Endorsement marketing is a really basic idea. Endorsement marketing is literally the idea of getting the word out about your product or service by letting other people gush about your stuff instead of you.

Because, let’s face it, happy customers or trusted experts singing your praises is WAY more believable and effective than you telling me directly. And with communications being what they are now, endorsements can fly around faster than ever.

There are three important kinds of endorsements that matter.

One, endorsements from actual friends, family, colleagues or anyone that you actually know in some interpersonal level. Those are the most trusted kind.

For example: Your neighbor raving about the fish tacos at the new tacqueria in your neighborhood. Your dental hygienist mentions how much she liked “Juno”. Your colleague gushing about her new Prius. See how easy and obvious this is?

Two, you can get an endorsement from a stranger, and those matter too, so long as they are deemed to have credibility. Think about the reviews you’re read on TripAdvisor or maybe Yelp where you don’t necessarily know the reviewer, but you detect that they are not acting in a self-interested manner, and are giving you their most honest opinion on a place. Those are also trusted.

For example: The butcher raving about the marinated flank steak to the customer in front of you. The guy on the plane next to you playing with his iPhone. The woman proudly clutching her Coach shopping bag.

Three, endorsements come, tacit or otherwise, from complete strangers who possess some form of suasion over followers. Think Oprah talking about a book. Or Robert Parker mentioning a wine he likes. Or Michael Arrington gushing about a cool new widget. Or when a radio station DJ talks about the new bed that they like. Oh, wait. That’s paid for. Forget that.

Which reminds me, there’s a very simple and yet incredibly important and powerful book written by Andy Sernovitz called, get this, “Word of Mouth Marketing.” It’s incredibly accessible, to the point, and Andy makes his ideas come to life with examples, and more importantly actionable things you can do to kick-start word-of-mouth about you amongst your customers. This is a book anyone interested in marketing should pick up and read.

For example : See that? OK, so I’m not Oprah, but there you go. If you weren’t paying attention, you might have missed it. Trust me, it’s a good read.

So which endorsements are the most effective?

In general, the more you trust or empathize with a particular person, the more powerful that person’s endorsement is. Hearing a stranger on the street rave about a nail salon means less than the other mom in your playgroup.

The difference in value can be attributed to the authenticity and purity of intent underlying the endorsement. Paid shills are too easy to spot as phonies. So think of the value of an endorsement as directly correlated with the authenticity of the endorsement.

Let me say it another way. What makes an endorsement trustworthy, is the actual purity of the authenticity of the endorsement. When a paid celebrity spokesperson talks about a product in an official capacity, consumers mostly can see right through that and often will dismiss the message as being un-credible. If someone mentions something because they love it and want everyone to know about it, it’s a whole different ballgame.

To make the point, think about product placement in TV and movies these days. We are now so hyper-sensitized to commercial messaging that when we see Bud Light featured in a reward challenge on Survivor, it comes across as contrived, and loses some effectiveness. But, when Karen yodels “Yahooooooooooooooooooo” after Grace quips to Will that he couldn’t find a woman’s g-spot if it were listed on Yahoo Maps, well, that cuts through the clutter.

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Why Endorsements Matter

Endorsements are your best friend in reducing friction at every layer of the 4A funnel and driving customers to your business. Let’s go through it:

Awareness: Endorsements (person to person, and trusted experts – especially media) raise awareness better than almost anything I’ve seen.

Acquisition: Endorsements fuel acquisition by making your other acquisition efforts much more effective.

Activation: Endorsements inspire people to get started, and persevere as they get up your usability learning curve.

Activity: Endorsements inspire your existing users, and they start to do more.

Enough said, right?

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Your Product is Your Buzz-Generating Engine

Buzz marketing. Despite it being an annoying buzzword (um), think about what buzz marketing really means. It’s people talking about your product. Seth Godin in his classic “The Purple Cow” discusses at length the power of being “remarkable”. Literally, he points out, the word means “worthy of being remarked upon.” In other words, buzz-worthy. As in, so awesome, people can’t help talk about it.

Your product itself IS your most important buzz-maker. When products are incredibly awesome, satisfying and delight customers, most of the rest of the equation practically takes care of itself. Hell, a monkey could drive that train. Did I mention Google’s $86 billion brand yet? That was sarcasm, folks. Just remember this and repeat after me: Bring remarkable products to market. Bring remarkable products to market. Good.

Now that you have the engine humming along, you just some fuel in the form of people talking about you.

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Acting on Endorsement Marketing

The best possible scenario is when it’s brain-dead easy for your zealots and even more casual users to endorse you with or without them knowing it. Best of all endorsing you is actually built-in to the product itself.

Hotmail. YouTube. Facebook. PayPal. Friendster. Plaxo.

These examples are classic “viral” phenomenon (where growth accelerates growth simply as the thing builds its own momentum like a well-designed virus) which is not the same thing as an endorsement, but is similar. In these cases, the endorsement is tacit – implicit in the referral is the endorsement of the underlying service.

When you don’t have this viral component into your own product, you have to then shift to trying to kick-start a chain of (authentic) endorsements from people motivated and inspired to rave about you.

How to Ignite User Endorsements

How to Ignite Trusted Expert Endorsements

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Igniting User Endorsements

So, how do you get people inspired to talk about you? Above all else, bring to market a product or service that is remarkable in and of itself.

Next, recognize that people already are talking about your stuff, both online and off. Some good, some bad.

While it’s tempting to spend all of your time cleaning up the bad, that’s really tantamount to a futile game of Whack-a-Mole. It’s never ending, and every time you quiet some naysayer down, another appears.

Instead, you want to make effort to facilitate and fuel the talkers who are saying good things about you and your products.

How? This may be the $64,000 question, and in some senses this is the hard part. Please COMMENT on this post with better ideas and I’ll add them to this list.

Let’s get started. In no particular order

  • Make sure your best customers feel in the loop.

Let them in on your company happenings, and even secrets. Think about MacWorld and the way that Apple makes their best customers feel part of the action every January in San Francisco. In fact, those zealots actually PAY to go to MacWorld.

Since you probably can’t organize a trade show, set up an insider status where you can communicate with your best customers and let them in on progress, updates, and preview the latest features of your product or service. Ask for their feedback, and let them feel part of the action. Have them test new versions of the products they already love. Invite them to participate on a user-advisory board. That sort of stuff.

  • Make it easy for them to spread the word.

If you can distill down your core message, that helps a lot. If you can make it easy for them to “share” with their friends, do that. If you do an “email a friend” program, give your users an easy and fun way to personalize it so as to add a human touch. Canned jargon be gone. Just be careful about being too slick about tapping into your user’s contact lists and spamming those folks. No one I know likes to get duped into spamming their contacts.

  • Ask them to talk about you.

Some people are shy, and if you ask (authentically) for people to introduce you to their friends, they will. Just be real about it. If you build a referral program, that’s fine, but be sure to be careful about choosing the incentives for the referral. Recognition is better than reward (see below for more on this).

You need to really do a great job of understanding the motivation of your customers in regard to why they might choose to put themselves out there and endorse your product. They must LOVE it, so that their endorsement is credible and authentic and therefore trusted. Recognize that they satisfaction they get from endorsing your product is from the feeling they have (as mavens) of sharing their expertise or insight on something cool. They are helping their friends, not you. If you introduce any incentives that make them feel like they are working for you, it will not only not work, but is likely to have a perverse effect of turning people off.

What NOT to do.

Don’t ever trick yourself into thinking that financial incentives or rewards – coupons, discounts, gift cards, cash – are a good idea. Ever. It may sound smart, but at the end of the day, the issue is that you get what you pay for. Nothing more, nothing less. And, the point is that endorsements are generally free, and when they’re paid, they lose credibility and ultimately their value in the first place. If it feels like you’re bribing or paying or creating monetary incentives, you’re off track. And, do yourself a favor and never use the word incentivize while you are at it.

  • Set up some community building structure for your zealots to get organized.

Create a place for your customers to openly and publicly talk about what they love and what they hate about you and your products. Let it flow, and don’t censor their commentary. Keep it real. Make it fun for them to participate in sharing their passion and evangelize your stuff. Recognize (but don’t “reward”) the most active contributors with increasing levels of status. Let these mavens feel like the experts that they are. Let them feel heroic.

Sounds hard, right? Lucky for you, there are companies (like lithium.com or getsatisfaction.com) who can set you up with turn-key platforms to build your very own community of zealots.

  • Measure how you’re doing

There’s this great thing called Net Promoter Score that you and everyone in your company should adopt as the #1 metric that you evaluate your success with. It’s also very simple, and there’s no excuse not to make the effort to track your score.

It goes like this. Ask your customers on a scale of 1 to 10 how likely they are to recommend your product. A 9 or 10 is considered a “promoter”. A 7 or 8 is considered neutral. 6 or below is considered a detractor. Your score is the percentage of promoters minus the percentage of detractors (ignoring altogether the neutrals). For a better explanation, Jeffrey Walker’s blog is here to help.

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Igniting Trusted Expert Endorsements

The endorsement marketing avenue other than customer endorsements is getting trusted so-called experts to endorse you. This comes in many forms:

  • Journalists (traditional media)
  • Bloggers
  • Like minded organizations
  • Business partners
  • Celebrities

The power of having trusted 3rd parties get your message out is undeniable. Almost without question, when your target audience reads about you in the New York Times, your credibility rises and with it, your 4As.

This is why even the most meager of budgets tend to find some ability to fund some sort of media relations effort – either through means of a PR firm or dedicated staff.

It used to be that PR firms and gurus were all about media and pretty much exclusively media. CEOs would get speaking engagements at key industry events so that the analysts and pundits would be impressed and reference those companies and products to journalists who rely on their expertise on such matters. Even journalists rely on trusted stranger endorsements!

Nowadays, while media endorsements are still important, the set of trusted stranger endorsers has broadened, especially with the onslaught of blogging. Bloggers have become celebrities, and their writing can often be somewhat more promotional in nature than a professionally trained journalist (although not always the case).

For example, if Perez Hilton now says that a new actress is hot, that literally makes it so. A couple of years ago, no one would have even heard of Perez Hilton. There you have it. Same for Michael Arrington or any number of bloggers who are experts in the areas that you are passionate about.

Like-minded organizations are also powerful. If you are marketing a product aimed at busy parents, and can get an authentic mention (and tacit endorsement) about your product or service by the PTA or the local parents’ club, well, what’s better than that?

Finally, celebrities are also of interest here. But, be careful. Just because Danny DeVito makes news gets blitzed drinking Limoncello’s doesn’t mean that other people will follow. OK, so there’s a better example here, but the point is that celebrities have the ears of their fans, but not always credibility in the domain that matters to your target audience.

So, even though trusted experts matter a ton, don’t underestimate the power of the everyday recommendation. In fact, analyst Jeremiah Owyang at Forrester Research was quoted in the New York Times as saying “83 percent trust opinions of a friend or acquaintance who has used the product or services. Only 63 percent of consumers trust a review of an expert.” But, then again, he’s an expert, so only 2/3 of you will believe that stat.

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Marketing and the 5As (used to be 4)

One of the frameworks that I like in regard to developing Marketing strategies and plans (particularly for consumer Internet sites) is the 5A’s:

Awareness (making your target audience aware of your site, and authentically communicating to them why they should care)

Acquisition (getting someone to your site – actually visit it!)

Activation (register, sign up, do something!)

Activity (engage, participate, contribute, buy something)

Advocacy* (get excited and tell someone about it!)

increase the flow of your funnelIn looking at this framework, you’ll immediately recognize that what you want to do is constantly pump people into the top of the funnel, and migrate them all the way down into the Activity bucket, as those are the ones who are the most valuable to you. If you imagine a funnel, the funnel narrows as you migrate your target audience down the 5A funnel, and what makes it through is your core customer base. Be sure to love and worship and stroke those who make it all the way down the funnel.

You’ll also recognize that each stage of the funnel has friction associated with the migration process. You might get awareness, but no catalyst to get someone to visit. You might acquire a visitor who leaks when it’s time to sign-up. After signing up, you might lose someone’s interest who doesn’t “get it” and never actually gets engaged. There are any number of ways that your users get lost or stuck on their way to becoming an active customer.

But, at the end of the day, when you think about the successful stories out there, the best companies have loads of passionate customers who flow smoothly and easily through the funnel, and become company and product zealots in the process.

*Update (May 30, 2008): After a stimulating and vibrant discussion with an investor this past week, he shared with me an idea that he credits to John Dillon and that is the notion of “Awareness to Advocacy”. The idea, as I understand it, is to strive to ever-shorten the cycle from customers first becoming aware of a product or service, to converting them to becoming a mouthpiece for it. I like this idea a lot.  See how dynamic and interactive this content is?

Hence, the 5th A, and arguably the holy grail of the A’s – advocacy.

Aside: This reminds me of my own awareness-to-advocacy experience where a co-worker turned me on to a great music stream called Radio Paradise, and within weeks, I was not only all the way down the funnel, but found myself pimping it to any of my music loving pals who would listen.

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The Art and Science of Marketing

Have you ever landed on a web site that is just as pretty as can be, but makes no sense, is hard to use, and just flat out doesn’t work? How about sites that appear to be so optimized (as if by a robot) such that every pixel on every screen has some higher purpose trying to convince you do to something (namely buy something), but somehow are so uninspiring that the most compelling button to click on is the Back button on your browser?

This is because consumer websites are built using a combination of “art” and “science” and sometimes the people behind them are 100% art and 0% science (pretty to look at, but missing cohesion), and sometimes it’s the other way around (effective but unappealing in its lack of soul).

On the Art side of the equation, this is where usability, appeal, creative design, and general aesthetic comes into play. Artistic marketing requires right-brain, creative thinking such that positioning and messaging and user-experience come together in a way that smacks the target audience on the head and says “you need this!” Often instincts and intuition contribute as much or more than data when developing marketing creative. Which can make non-creative types feel uneasy. Of course, when it’s done well, the messaging and user-experience is so clear and seamless, you barely know you’re being marketed to. The result is an intuitive user experience that is a joy to use, and delight to share.

When marketing programs are operated in an environment ruled 100% by art, the results can be devastating. Without discipline around performance and measurement, there’s no way to learn what’s working and what isn’t, no ability to test and learn, and worse of all, a disconnect from what the overall purpose of the marketing is in the first place – driving actual actions.

On the Science end of the marketing spectrum, you have lots of buzzwords and acronyms like SEM (search engine marketing), SEO (search engine optimization), A/B testing, LTV (lift-time value of a customer), CPM (cost per thousand), CPC (cost per click), CPA (cost per activity),conversion rates and lots of quantitative KPIs (key performance indicators) around customer acquisition, activation and retention activities. This sort of stuff is a data-junky’s fantasy.

The story line goes something like this. You determine that your customers are worth $37.00 to you over a 24 month time horizon. You know that of the new users who land on your welcome-version of your homepage, 14% of those become registered users. It follows, then, that you should back up the truck and spend every last dollar acquiring new customers any and every way possible for anything under 5 bucks per visitor. So, now you find a website with an attractive base of users that matches your target audience, and you can buy advertising for $7.50 CPM (cost per thousand impressions) with a 0.15% click rate or better, then you’re in business, right?

The risk here, is that before you know it, you’re optimizing for performance, sometimes at the expense of the overall experience. For example, think about the content that lands in your spam email inbox. Outrageous offers. Explicit and inappropriate content. Hoaxes. All of these are designed to get just one person in 10,000 to click. If your marketing gets to be 100% scientific, you risk finding yourself slipping toward techniques that may optimize short-term performance (using “sex” in a subject line of your newsletter) but erodes long-term loyalty of your customers.

Let’s just acknowledge that both individually can be effective, but more powerful still are when there’s a part art, part science approach that makes each discipline stronger than it could be on its own.

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Conclusion

Some overall key principles to keep in mind in regard to endorsement marketing.

  1. ENGINE. Start with bringing a remarkably great product to market. Don’t bother with good. Product is the engine.
  2. FUEL. Take advantage of your zealots and turn them into megaphones (while truly understanding their motivation in doing so). Endorsements are the fuel.
  3. IGNITION. Figure out authentic ways to ignite your fuel.
  4. PERFORMANCE. Keep yourself honest and diligently track your Net Promoter Score.

God, it all sounds so obvious and straight-forward. If only it were so easy.

Good luck, and let me know your thoughts, feedback, reactions, and ideas for igniting endorsers with comments on those pages.

And forward these pages to a friend! I’d appreciate the endorsement.

GOOD LUCK!

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