'Buzz' the in-word for China sales
By Daniel Allen
BEIJING - China is home to 380 million consumers aged 18 to 34 - a key
demographic that marketers view as essential to the continued growth of the
world's fastest-expanding economy.
However, beyond hard numbers, what's even more valuable for marketers is to
know which type of marketing will be most effective in connecting with this
increasingly discerning, tech-savvy group.
The use of word-of-mouth (WOM) marketing - which involves generating positive
"buzz" around a particular product or service and then spreading it through
various forms of real world and online communication - is steadily intensifying
in China. As marketers have asked advertising and media partners to find new
and more effective ways to communicate with Chinese consumers, influence
decision-making processes, and create favorable brand impressions, so the
generation of positive WOM has become the ultimate marketing objective and key
to profitability.
The connection between recommendation rates and sales growth has already been
proven by research at the London School of Economics. Results show that
companies with above-average recommendability, and below-average negative WOM,
generally grow four to five times faster than their less healthy counterparts.
A recent survey found that nearly 40% of Chinese men aged 18 to 34 rank WOM as
their top influence for electronics purchases. Moreover, WOM marketing is more
influential to Chinese consumers than American consumers in a whole host of
product categories - from electronics and automobiles through to
pharmaceuticals and clothing. Combined with the fact that surfing the Internet
is China's primary leisure activity, and the high hopes placed in WOM by
marketers seem justified.
The growth of the Internet has meant that the unrestricted channeling of
positive WOM from real consumers to large prospective audiences is quickly
becoming a reality. This is especially true in countries like China where
consumers are extremely active in sharing and expressing their thoughts online.
Although television still reaches the single-largest group of Chinese consumers
- more than 700 million nationwide - the Internet has become a powerful
unifying force, at least in urban areas. People discuss their likes and
dislikes online more freely than they may in person, and this can be
instrumental in the implementation of successful Chinese WOM marketing
campaigns.
Phat Song of Ogilvy Public Relations in Beijing, a company adept at employing
WOM marketing in campaigns for a range of prestigious clients, comments, "WOM
is not a new phenomenon in China. People see it as an innovative tool because
of the power of connectivity that digital media penetration has recently
brought. Developments in technology mean that WOM marketing is quicker, more
interactive and far more wide-reaching than ever before."
Phil Dorman, co-founder of Shanghai-based WOM agency ConfuciusSays, agrees,
commenting, "WOM has existed forever in China. In a market where the
command-and-control advertising, television, and mass circulation newspaper
model of the United States has never really existed before, driving buzz has
long been the best way to build the relationship between brand and consumers."
He continues, "Chinese consumers are now more than ready to embrace WOM - it's
their medium. This is a global trend to some extent, but much more so here in
China where trust levels for traditional media are incredibly low, and guanxi
[personal relationships] can affect everything from your career to finding that
unique pair of retro sneakers."
The growth and penetration of bulletin board services (BBS) - discussion groups
or online forums on specific topics and blogs - is now faster than the growth
of the Internet itself in China. There are two simple reasons why this
particular Internet medium is especially appealing to today's Chinese consumers
- freedom and anonymity. WOM is certainly not new in China, but the Internet
represents the perfect channel for Chinese citizens to express ideas and
opinions.
Reflecting China's WOM-centric nature, discussion forums on the Chinese
cyberspace are now numerous and highly active. According to Sam Flemming, chief
executive officer of Shanghai-based CIC Data, a company that helps
international companies harvest and utilize communications on Chinese online
forums and blogs, there are about 40 million Chinese forum users - 35.2 million
visit a forum every day. Blogs and bulletin boards have emerged as powerful
modes of communication.
Although the potential power of WOM marketing in China is undisputed, how can
companies harness the power of something they can't control? After all,
companies have never had control over publicity. However, the rise of Web 2.0
in countries like China has now established a new channel that allows marketers
to stimulate and influence conversations between the people they most want to
take action - the trendsetters or "e-fluencers".
Dorman believes a mix of online and real-world marketing is the key to maximum
buzz generation in China. He explains, "The key to WOM success in China is the
story you create. Whether it be your product itself or an asset you create, it
all begins with having something remarkable enough to be worth talking about.
Blogging is a great tool for this over time, but nothing beats real-world
interactions. They should always start small - small enough so you can interact
effectively with your audience. They should be a remarkable experience that
starts with the invitation, runs through the event itself, and out the back
with a take-home memento."
Phat Song agrees with Dorman, commenting, "We find in a lot of cases that the
digital medium merely conveys what has happened offline beforehand. The success
of an event or promotion spreads across the Internet like ripples on water -
blogs and BBS are just tools for conveying messages from the real world. It is
our job to make sure those messages are the right ones."
One of the key characteristics of the combined traditional and Internet
word-of-mouth (IWOM) marketing techniques is the speed with which it can result
in tangible results. In many cases, opinions and interests shared by consumers
in the online world translate quickly into actual sales for manufacturers in
the offline world.
For example, it's now relatively common for Chinese consumers who are planning
to buy high-value products, like automobiles, home furnishings or consumer
durables, to shop around online not just for the best prices and deals on
different websites, but for other like-minded consumers in discussion groups
and BBS, planning to buy the same product. In what has become known as the tuangou
or "crowdclout" effect, these consumers then form a group in the offline world
and approach one dealer or retail outlet for a volume discount.
Although the phenomenal popularity of blogging, BBS (bulletin boards) and Web
2.0 in general in China has helped many companies promote their products
through viral marketing, it isn't simply a case of posting a favorable product
on a blog and hoping for the best. For a product to generate buzz, the
marketing approach must be innovative, subtle and well-targeted - regular
Chinese bloggers can quickly become suspicious and cynical if a message is
overly commercial.
Phat Song comments, "In both WOM and IWOM marketing today innovation is the key
because the digital world is changing daily. Video sharing, blogging and
communication with communities may work well this year, but next year there'll
be different techniques. Traditional WOM is old news in China, but IWOM is a
baby. China will contribute a lot to the development of IWOM because of its
numerous Internet users, rapid economic growth and increasingly open and
innovative culture."
There are now many ways in which corporations and agencies can spread positive
messages about products and services in China. Regardless of the medium,
successful campaigns generally involve giving exceptional "brand experiences"
to existing and potential consumers, and then providing them with a platform
and incentive to share their experiences with others. The fact that Internet
and mobile penetration is still rising, and that moneyed Chinese consumers are
increasingly tech-savvy, should make WOM marketing an increasingly effective
proposition in the short to mid-term.
Daniel Allen is a freelance writer and photographer from London who has
lived in China for the past three years.
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