By Tom Ryan
While word-of-mouth is always a great way to build brand exposure, some are questioning their value if the recommendations are driven by free gifts.
In a new word-of-mouth marketing strategy, companies enlist consumers they know like their products, and instead of money the agents receive free gifts. The hope, according to the Los Angeles Times, is that the free gifts provide enough incentive to get the agents to talk up the brands to families, friends, and anyone else they run into in the course of the day.
In most cases, participants are screened for their word-of-mouth abilities and even supplied with marketing tips.
Under Staple's Speak Easy program, for instance, questionnaires are sent to active members of its frequent shopper program asking if they would like to receive free products and if they regularly tell family and friends about them. Participants receive a free bundle of products every four weeks that includes a few bulleted talking points to use when casually plugging the products. For instance, a Rollerball pen recently came with the phrases "specially formulated pigmented ink which helps prevent against check fraud" and "nice, smooth write."
At Procter & Gamble, 725,000 unpaid "connectors" receive coupons for products in the mail to share with friends, or sometimes the product itself. P&G said its connectors, selected through a rigorous screening process, typically speak to about 25 people a day, rather than the five or six the average person converses with.
P&G's word-of-mouth marketing particularly looks for instances of "disruptive equilibrium," or when something out of the ordinary happens to encourage consumers to talk to one another. For example, Dawn Direct Foam was sent only to connector moms along with literature touting its ability to get kids to help with the dishes.
"A conversation would go, 'My darn children aren't doing their chores,'" Steve Knox, chief executive of Procter & Gamble's word-of-mouth division, called Tremor, told the Los Angeles Times, and then the connector mom would reply that Dawn Direct Foam made her kids volunteer for housework. The campaign led to a 50 percent increase in the product's sales, and helped bonding with participants too.
"Moms talk to each other if they believe they have a piece of information that is helping their friend," Mr. Knox said.
The free gifts may appear to skirt a ruling by the Federal Trade Commission in December that declared it deceptive to employ people as marketers without disclosing the relationship to consumers. The ruling came after a rash of paid "influencers" were infiltrating blog sites attempting to sway opinions on brands. A P&G spokesman said part of the reason they don't require connectors to reveal their affiliation is because they're free to say positive or negative things about the products.
Kelly O'Keefe, a professor at Virginia Commonwealth University's Adcenter, said enlisting people who were genuinely excited about products was an improvement over previous word-of-mouth tactics that were just monetary transactions. Then, companies would do things like pay people to sit at a bar, order a drink, and tell others how great it was.
"It's human nature to talk about things that excite us," he said.
But some consumer advocates say full disclosure should be required even in gift-giving cases.
"We worry about the insertion of a marketing theme into interpersonal relations," Robert Weissman, managing director at Commercial Alert, told the Los Angeles Times. "Don't transform everyday interactions into veiled commercial messages."
Discussion Questions: What do you think of the marketing potential of word-of-mouth campaigns where the "influencer" receives free gifts? Do you see any ethical issues around the practice?