Absolute Cut, Red Bull, Amazon, Nudie …. What’s the connection?  Each of them are examples of major brands built using word of mouth and which don’t depend on the 30 second TV ad.

Each of them has an approach that basically boils down to product 1st marketing 2nd.  Provide a great experience and word of mouth does the rest.

Thanks to the guys over at Brand Autopsy, here is the next example Whole Foods – a US chain of grocery stores that taps into the trend of healthy eating (sorry …. living)

Austin American-Statesman’s article here or printable version here

WholeFoods’s revenues were US$3.9b (with double digit growth), so they are hardly a small player but still spend only $17.4m on marketing (and only a fraction of that on mass market advertising). Compare that with Safeways US$100m budget.

Here are some clips from the article that explain what WholeFoods is about .. you will see that it is more than just a store that sells organic stuff … they stand for something, a something that resonates with their customers.  Some of whom are media types that, without payment, give them airtime – such as Sandra Bullock “gushing” about a WholeFoods store opening near her home on Letterman’s late night talk show

Quotes from the article

The strategy

The company didn’t begin with a deliberate strategy of not relying on advertising.
"In the beginning, we couldn’t afford advertising," said Walter Robb, Whole Foods’ co-president. "We did lots of (advertising) experiments. They didn’t work, didn’t deliver results." So Whole Foods spent money on improving its stores.

As a byproduct of company strategy, the Whole Foods name became associated with healthy living as well as gourmet eating. Going to Whole Foods meant more than just grocery shopping.
The company guarantees its customers that the products it sells don’t have artificial ingredients or hydrogenated fats. It was a leader in pressing Congress to pass the Organic Foods Labeling Act. Stores recycle their waste, and some use solar energy.

Whole Foods also pays to have employees who are knowledgeable about organics and interested in a healthy lifestyle. That puts it in a league with luxury retailers, which breed brand-loyal customers, as opposed to traditional grocery stores that compete on price.

Stores also create links to customers with community service projects and fundraising, such as days when 5 percent of sales are donated to a local cause.

In Austin, Whole Foods helped O. Henry Middle School make over its lunch menu with healthier fare. The company overall donates 5 percent of after-tax profit to various not-for-profit organizations.

"Being involved in a very deep and authentic way in our communities helps to create word of mouth," said Nona Evans, marketing coordinator for the Southwest region.

Word of mouth can be more powerful than traditional advertising for younger people, who respond better to recommendations from friends and mentions by celebrities, said Gay Gaddis, founder of the T3 advertising agency in Austin.

"Gen X and Gen Y like to discover their own stuff," she said. "Those are the kinds of things that are really gaining traction. And Gen X and Y feels it is more sincere."

And finally, an absolute stunner of a quote; who says American’s cant do sarcasm!!

If you’re a conventional supermarket, part of the way you differentiate is get the message on drive-home radio that your bananas are on sale,"  Whole Foods has "created such a strong brand and no one else has gone after it. Why advertise?"

First about the source: Datamonitor is a London based, highly respected business information and intelligence company who provide clients with unbiased expert analysis and in-depth forecasts for seven industry sectors.   See their about us

Now the report: Called "Viral and Word of Mouth Marketing" and published in 05/2004 it has 3 main sections

■ A detailed executive summary

■ The Future Decoded

■ Action Points.

Datamonitor do a great job of laying our the argument for word of mouth and backing it with

■ quotes from

• Leading authors (Emanual Rosen, George Silverman, Malcolm Gladwell)
• CXO level executives from leading brand ( eg Coca Cola)
• Marketing academics/academic publications (eg Journal of Consumer Pyscology)

■ Research – both their own primary research, and by collating and presenting research from sources such as Eurobarometer and P&G’s results

■ Case studies and examples

Whilst the report does not really break any new ground (for those in the field) what they do exceptionally well is to bring all the important knowledge into one place, link it into a coherent study with all the supporting evidence needed to make a rational informed decision.

If you have the time, reading the books such as Tipping Point, Anatomy of Buzz is much more enjoyable, and all supporting research is available if you have the time to search for it.

BUT the Datamonitor report brings it all together into one place and provides a common line of argument to bring it all to a conclusion, with a set of action points.

My favourite Case study:  Remminton’s bikini Trim and Shave (check out the Bikini Shape Stencils – what a great idea)

Conclusion

The report is costly, but you do get what you pay for, its an excellent piece. Because of its completeness and thorough approach you really wont need anything else to cover the ground.

I would highly recommend it to all brand managers, marketing directors, CMOs considering if word of mouth should be part of the mix. You can get it from their website at

Disclosure: I have no relationship with Datamonitor other than they gave me a copy to review.

More details on the report are available here, a pdf of the Product Brochure here

The ad agency got paid handsomely, and promoted themselves wonderfully.  Paris Hilton got a little bit richer (did she need it?)

But the poor client who shelled out to make the ad, buy the airtime to run it saw no increase in sales of their spicy burger.

To quote the lead para from Ad Age 

CHICAGO (AdAge.com) — Despite the whirlwind of publicity generated by its Paris Hilton ad, the controversial spot does not appear to have significantly increased Carl’s Jr. restaurant sales.

Expecting higher returns
Analysts and industry watchers were expecting much higher returns in the wake of the worldwide attention paid to Carl’s Jr. and its Spicy Barbecue burger courtesy of Ms. Hilton’s erotic car-washing escapade in the ad.

During a conference call with analysts after the market closed yesterday, Anton Brenner of Roth Capital Partners said: “Particularly looking at Carl’s same-store sales, it doesn’t appear that there is a noticeable boost from the Paris Hilton ads,” he said. “They might have gotten a lot of attention, it’s hard to squint and see how it has impacted your actual sales performance.”

My conclusion :
Whilst sceptics might leap on this to show that viral or word of mouth has no effect I would beg to differ.  This was so badly executed by the agency that most people could not remember which restaurant go-to to buy the burger.

The inevitable result of getting an  ad agencies (traditionally creative-driven) to develop a viral/word of mouth campaign. 

My recommendation:

just as you would not ask a cosmetic surgeon to perform heart surgery, choose the right type agency for the job.   

Emanual Rosen (Anatomy of Buzz) has compiled his top 10 list, (the list is in alphabetic order)

- Automotive
- Consumer Electronics
- Consumer Packaged Goods
- Entertainment
- Fashion  (visual buzz of been seen wearing a new lable)
- Healthcare
- High Tech
- Publishing
- Toys & Games
- Travel

For some the inclusion of Consumer packaged goods may be a surprise, but he makes the point that while the conversation about toothpaste is not as intense as the next Harry Potter book, there is a lot of information sharing happening!

I would personally add to this list

- Cosmetics
- Health and beauty (shampoos etc)
- Baby care products (for people with babies it is hard to avoid the conversation)

Would anyone add others?