Posts Tagged ‘Dave Balter’

[Interview] Dave Balter and the ‘Bzz’ of Word-of-Mouth Marketing

Monday, April 16th, 2012

Sarah Marston, a student in Dr. Robert Brown’s “Writing for Public Relations and Marketing” class at Harvard University, had an assignment to profile an executive whose accomplishments could grab the attention of a general audience.

She chose Dave Balter.  Sarah did such a great job capturing the story behind Dave’s personal journey as the founder of BzzAgent, we thought we’d share her article here. Great job Sarah, you have a brilliant future as a journalist!

 

Through the Grapevine: Dave Balter and the ‘Bzz’ of Word-of-Mouth Marketing

By Sarah Marston

How do you get 2,000 marketing campaigns to reach more than 400 million consumers, using mostly volunteers to spread the word? If you’re Dave Balter, it takes a village of 800,000.

Balter is the founder and CEO of Boston-based BzzAgent.com, an ethically conscious, international network of consumers who voluntarily participate in word-of-mouth programs to promote a variety of products and services.

Companies and manufacturers – including the likes of Dunkin’ Donuts, Nestle, Procter & Gamble, Johnson & Johnson, Disney, Kraft Foods, L’Oréal and Dove – hire BzzAgent to market specific products through social media. BzzAgent then deploys its “Agents,” a network of more than 800,000 volunteer marketers, to try the products and share their honest opinions online.

“If you’d said to me 10 years ago, ‘Hey, what about creating a company to help retailers to get real people [as marketers]?’ I would have said, ‘What are you talking about, that’s crazy,’ ” Balter reflects, sitting at his desk in BzzAgent’s South End office. “But business has evolved.”

BzzAgent was founded by Balter in 2001 with no capital and initially had to offer its services for free. Since its humble beginnings, it has used innovative marketing strategies and old-fashioned resourcefulness to become a pioneer in the word-of-mouth marketing industry. The company was acquired last year by dunnhumby Ltd., a subsidiary of giant U.K. retailer Tesco, in a deal valued at approximately $60 million.

The company’s trailblazing spirit extends beyond its marketing strategy. When BzzAgent launched, there was no ethical code in place for word-of-mouth marketing. Balter has since co-founded the Word of Mouth Marketing Association, a non-profit organization dedicated to the responsible development of such marketing practices.

It all started with Balter’s simple marketing idea: That great things happen when you give people the chance to talk.

‘Like a Lightning Bolt’

Balter worked as a marketer in corporate America for a few years before venturing out on his own in 1996 and founding two promotional agencies, Retro-Fit Merchandising and 360merch. After selling both companies in 2001, he was ready for a new challenge. He was reading about mobile companies when a colleague came into his office, gushing about a book he had just read.

When the colleague left his office, Balter wondered: Why would this guy rave to me like this? “He ran into my office, he pitched me the book like a product,” Balter recalls. “And it just struck me like a lightning bolt: If companies could do this, harness a bunch of people to [pitch like this], it would be amazing.”

He put his research book on mobile companies in a drawer that same day, and started to create BzzAgent. After approaching nearly 200 investors with his word-of-mouth marketing idea and not securing a dime of capital, Balter decided he needed to take a different approach.

He threw the $30,000 he had from the sale of his old companies into the new project, and adopted a new strategy. “We went out to a whole bunch of companies and offered the service for free,” he says, smiling.

Out of the five companies he approached, only one said yes: The Penguin Group. And so BzzAgent took on its first marketing campaign for the 2002 novel, The Frog King.

“We had no money, we had Penguin as a free client, and so we proved to them that this could actually work,” Balter says. “We got 400 buzz agents to try the book and tell others about it.”

BzzAgent grew slowly but steadily, building up its client base. Nearly three years later, with about $3 million in sales under its belt, the business began to make profit.

“The way people build companies now, at least in the start-up world, is really different,” Balter explains. “Then, it was: We’re not going to take any money, we’re actually going to sell stuff to clients, and if they buy it, then we’ve got a good company. This isn’t how it happens today. Today, it’s: We’ve got a great idea, who are we going to raise money from? If we can’t raise money, there’s no company.”

‘There Was No Standard’

BzzAgent Senior Vice-President Malcolm Faulds describes Balter as an innovator: “Dave has a unique talent for identifying new market opportunities and energizing teams to pioneer those opportunities.”

Balter’s groundbreaking efforts also extend to ethical concerns. When he embarked on BzzAgent, there was no ethical code in place for word-of-mouth marketing. Many marketing companies sent people out to push products without disclosing their affiliations.

“There was no standard, and the previous way of thinking about businesses like these was to actually fool people,” Balter says. “As this business started to take shape, there was a lot of negativity towards us. We weren’t doing that, but … we were lumped into that. But we take real opinions, and let people talk about them.”

Early on, it became clear to Balter that a code of conduct was needed for the industry. It started as a non-legal code of ethics on the BzzAgent website, with such transparency rules for buzz agents as: “You will always be authentic.”

As the BzzAgent code of ethics began to grow, Balter joined forces with Pete Blackshaw, chief marketing officer of Intelliseek, and Jonathan Carson, president and CEO of BuzzMetrics, to formalize industry standards. Together, in 2004 they founded the Word of Mouth Marketing Association (WOMMA).

The non-profit organization works to develop and maintain appropriate ethical standards for marketers and advertisers engaging in word-of-mouth marketing practices, identify meaningful measurement standards for such marketing practices, and define “best practices” for the industry.

“WOMMA took our code and made it much more industry-encompassing, strengthened the words, made it feel real,” Balter says. “Now you had a governing body saying, this is the way to do things. … That totally reset the stage for the industry because now you had some other company that was saying what to do, and how to do it right.”

‘Aren’t We a Start-Up?’

Just as ethical guidelines fortify BzzAgent’s culture of transformative thinking, the company’s physical office space nurtures innovation through creative collaboration.

In 2009, when a lot of people were getting laid off during the economic recession, BzzAgent opened its doors to people who wanted space to work on their own projects. Since then, the office’s extra workspace has evolved into a sort of “mini incubator” for several Boston start-up companies. Current companies sharing BzzAgent’s space include: Smarterer, ProctorCam, Help Scout, Alphabet Arm Design, Eat Boston, PromoBoxx, the Artist in Residence and, launching in April, a new business called Intelligently.

“In the early days, we were this young, crazy up-start,” Balter says. “And then as we matured, as we raised capital, I felt this pull. Why are people going home at 6 p.m.? Aren’t we a start-up? We have so much work to do. As my way of holding onto the idea that we were a start-up culture, we started letting other companies spend time here.”

The result has been very symbiotic. Start-up companies see BzzAgent in action, and get a glimpse of what it’s like to grow into a mature business. In return, Balter’s employees are motivated by the start-up workers’ energy, work ethic and new ideas.

“Every day is different!” quips Marie Bova, Balter’s executive assistant.

‘That Retail World’

Today, BzzAgent continues to adapt as the word-of-mouth business keeps pace with social media channels, translating online discussion of products into purchasing power.

“In the past year, we’ve been pioneering the intersection of retail marketing and social media,” Faulds says. “This is huge territory and tremendously exciting.”

“Like any industry, this one has evolved,” Balter says. “We’re now owned by dunnhumby. I can now engage a variety of real consumers to have brand experiences, and then they share that with their peers [online] and offline. … Those people are now purchasing products in store at retail [prices]. Where we really evolved to is right into that retail world.”

In other words, by working with dunnhumby and Tesco’s other manufacturing partners, BzzAgent has become part of a major retail playground. Combine that retail advantage with inventive promotional techniques, moral high ground and creative office space, and BzzAgent becomes a serious marketing player.

“We’ve taken this idea of real people talking to others and creating impact, and we’ve tied it right to in-store purchase and to retail,” Balter says. “Retailers need to use social media to create return, and we live in that space.”

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[Inc Magazine] How to Break Up with Employees

Wednesday, November 2nd, 2011

This is a cross-post of an article published here for Inc Magazine.

Now, more than ever, departing employees should be treated with care and respect. Serial entrepreneur Dave Balter explains why.

To Kim N.: I’m sorry you were dismissed with anger and haste. To David S.: I wish I’d told you that even though you worked with us just 89 days, I don’t regret that we gave it a try. To Sam C.: I apologize for sending a signal that we didn’t value every minute you were employed by us. To David W.: I wish we’d thrown you a going-away party after you resigned, given all that you contributed to our business. To countless others: I was a coward for having someone else deliver the news of your termination, and I wish I’d met with you directly before we parted ways.

After employing–and saying farewell to—hundreds of people over the past two decades, my list of apologies could go on forever. But one thing is certain: I never want to add anyone to this list again. And if you’re in any type of leadership position, you should keep your apology list short, too.

For most of my life as an entrepreneur I got angry when employees resigned. I felt betrayed, broken up with. I seethed about losing a colleague who knew my complete strategy, my darkest fears, and my many weaknesses. How could they just take off, cast my company and me aside, and think about some new professional relationship to make work-love to?

When I felt rejected I turned against departing employees. Early in the history of BzzAgent, my fourth startup, a key employee gave notice. I was bitter and frustrated and responded as many do: I started treating him like an outsider, re-crafted his image to the rest of the organization (“actually he wasn’t great at…”), and began the process of working around him. Within two weeks, the divide was huge; we exchanged half-hearted goodbyes and he left with a shrug. And even though today we still share similar interests and are active in the same business communities, we don’t have a relationship. Indeed, we hardly speak. (To Kevin W.: I really valued those early days when you were one of the first-ever believers in our vision. Thanks for inspiring me way back when.)

A “bad break up” with an employee is a huge mistake. The one who leaves and the one who is left both must understand that the emotions at the time of departure—the frustration about mistakes that were made, the disagreements over strategy, and the heated debates won’t mean much in a short time. Bad memories will fade. What remains is a bond from shared experiences.

It wasn’t until I’d sold my company (to Tesco in June 2011) that I realized how deeply these relationships mattered. Post-sale I tried to enlist my head of marketing to throw a BzzAgent alumni party, with the vision that we should have one last celebration with everyone who helped impact the business. He politely informed me that many people might not show up, as some are still disappointed and bitter about how they were treated when they shoved off. It was then that I thought of all the relationships that were lost as employees left. I vowed then to handle departures differently. I decided to maintain bonds instead of breaking them and it became clear to me that staying connected to former employees is more important now more than ever. Here’s why:

  • We are infinitely connected in a social world. I started BzzAgent as a word-of-mouth marketing company but it took me too long to realize that positive word of mouth plays a big role in building a good company where the best talent wants to work. LinkedIn, Branchout, Bullhorn Reach, and other social networks help people share business contacts. Former employees are easy for client and employee prospects to find to check your reputation. They can drive business and talent to (and away from) your company. Former colleagues may even become future collaborators: When Joe Chernov, our onetime head of PR, left BzzAgent in 2009, our relationship shifted but continued to evolve into shared projects, co-authored thought pieces, ideation sessions, retweets and Facebook updates. Where our employee-employer relationship allowed for one dimension of interaction, our corporate alum relationship had multiple dimensions of interaction and value.
  • Former employees provide invaluable perspective. They have critical knowledge about your business—and you—that practically guarantees they’ll always be beneficial. With the knowledge of your organization’s vision in hand, they can provide an incredible external perspective that is sometimes lost within the confines of an inward-facing company. They can make introductions to a whole new set of clients. They can point you toward competitor information they’re receiving now that they’re on the outside. In short, their paycheck may not be determined by your vision anymore, but as part of your network they will continue to do things that make your vision a reality.
  • Monogamy in corporate America is dead. We now live in an era where we’re no longer committed to a single corporate entity for years. Rather, it’s common—and even expected—that people will change jobs and switch careers. But beyond transitions, it’s expected that employees will take part in extracurricular business activities such as joining associations or taking part in Meetups or Hackathons. It’s accepted that an executive may take time to advise other companies or join a board, roles that only increase their knowledge and value. Star employees may collaborate with friends and rivals at other companies on community building parties or events, such as Ruby Riots or 1,000 pirates or even Tech Proms. It’s not just that you’re connected by six-degrees (or less), but rather that each connection is likely another potential collaboration and learning opportunity.

Now, more than ever, departing employees should be treated with care and respect. When they leave, bosses should thank them for their time and their contributions. In fact, a company’s relationship with corporate alums should be fostered, beginning at the moment that you decide to stop working together. It doesn’t matter who makes that decision. If handled appropriately, relationships with former employees can be a source of immense, incredible benefits for both parties. (To Kristen B.: Early at BzzAgent, you helped us build a fantastic brand and I don’t know if I told you that enough. Let me tell you that again!)

Some very smart companies figured out the value of maintaining connections to former employees long ago. Open Market—one of Boston’s high flyers in the late ‘90s—has an alumni group listserv where people seek advice, share job openings, and create new relationships. Procter & Gamble famously hosts a big splashy event for their alumni every year—and you can’t get in unless you worked at a certain level at P&G, which makes it all that more exclusive and special. IBM, too, is known to go to lengths to make sure its former employees remain fans.

It’s even possible to maintain good relationships with employees you have to let go. A few years ago, due to an evolving business model and economic depression, we had to do a round of layoffs at BzzAgent. We let go of two fabulous employees—Aaron C. and David E.—who we then offered workspace in our office for them to take on their next career move. Another former employee, Rob T., decided he wanted to leave BzzAgent to start his own company. He now runs ProctorCam, a company that monitors online test taking, with a dozen employees inside our offices. Together, we all now “cohabitate” and have generated infinite points of value through hallway dialogue and the good-feelings from current employees understanding how we support our own.

Just a few months ago, another key BzzAgent employee gave notice. But this time—with the historical knowledge in hand of nearly 300 employees coming and going—it was different. First, I congratulated him on what would likely be an exciting career move and expressed how much I appreciated everything he did for us. We then worked together to craft a really solid transition plan, including to whom, and when we would announce his departure. And in the time between his notice and his exit, we didn’t ostracize him—rather, we worked in unison to achieve the goals we’d laid out together. Ultimately, we threw him a party and we bought him a bottle of Vueve Clicquot to celebrate our appreciation for the value he provided us. By the time he left, our relationship may have been stronger than any time during our previous three years working together.

So to Dave D.: thanks for everything you did for BzzAgent as our president for three years. I look forward to working alongside you again in some endeavor sometime, somewhere—and let’s share a pint of Brown’s Ale together at our upcoming BzzAgent alumni party.

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To Be a Great Leader, Don’t Be a Genius; Be a Sponge and a Stone

Monday, September 19th, 2011

This is a cross-post of an article Dave Balter wrote here for Forbes. For more discussions and thoughts on the importance of humility in business leaders, check out HumilityImperative.com.

This article is by Dave Balter, the founder and chief executive of the Boston-based social marketing company BzzAgent, owned by dunnhumby ltd., where he is part of the global executive team. He is also a founder and the executive chair of the skill-testing platform Smarterer, and an investor or advisor to a dozen start-ups.

There’s a misconception that the most successful business leaders achieve greatness because they’re insanely smart—geniuses, even. You look at people like Mark Zuckerberg, Reed Hastings, and Warren Buffett, and it seems that might just be true. After all, they are more successful than their peers, and there’s no doubt they’re extremely sharp. Yes, they are smarter than you.

But the truth is different. Most highly successful leaders really aren’t the smartest people in any room. Rather, they have something that sets them apart. That something is sponge and stone. I’d argue that for any entrepreneur or leader, sponge and stone is the critical differentiator that defines his or her likelihood of success. (And I’d take success over smarts any day.)

In the business world, a sponge is someone who is tirelessly driven to seek and absorb new information. In general terms, this means someone who is highly curious, possibly even somewhat obsessive, about gathering data and learning from it. I don’t mean someone who simply stays up to date with TechCrunch and Mashable and loves to find articles to share via social media. Rather, a great sponge does three things:

1. Learns from mentors, advisors and peers. Sponges always surround themselves with people who can help them. They build and tap strong advisor networks. And for everyone they encounter, they ask questions, listen, and learn new things.

2. Studies heroes. A great sponge will typically have one or two individuals he or she considers heroes and will soak up everything possible about that person. Heroes don’t have to be business people. For instance, an early hero of mine was the Russian novelist Vladimir Nabokov. I found myself inspired more by his writing quirks than by his books or writing style. For instance, he was a serious lepidopterist, studying butterflies and moths (one he discovered is even named after him). I now value information obsession, which has helped me launch and build businesses. He also developed his novels using index cards, which he would arrange and rearrange. I find that writing speeches on cards helps me organize and reshuffle my points, if necessary. Nabokov compared the way he wrote to building a bird’s nest, and claimed that his notes made up a “kaleidoscopic arrangement of broken impressions.” I view my process of developing a company as establishing a set of elements that slowly form a bird’s nest.

3. Reads voraciously. Sponges tend to want to take in as much information as possible. I’m not talking about staying up to speed on 140-character Twitter blasts but rather consuming fully-developed content. And it doesn’t need to be about business. Sponges may devour fantasy or fiction. They may read instruction manuals front to back. It doesn’t matter. They feed on as much information as they can absorb.

But being a sponge is only part of what it takes to be a success in business. A business leader must also be a stone. There are two main characteristics of stone behavior: First, these determined individuals aren’t the smartest people in the room, but they work harder than everyone else. Secondly, stones have incredible strength of conviction. They are tough-minded and believe in whatever they are pursuing or doing, regardless of the challenges, hurdles, naysayers, and failures they encounter.

Stones do not have to barely scrape by and consider it a badge of honor to crash on a blow-up mattress in a start-up’s office. That happens sometimes, but it’s unnecessary. Consider Sidney Frank, who at the ripe age of 77 founded Grey Goose vodka. Already wealthy from previous ventures, he spent countless hours crafting one of the world’s most recognized brands, and he sold it five years later for $2 billion. I can bet you he wasn’t crashing on a blow-up mattress, but he did work relentlessly to make Grey Goose a hit.

Whether a business student or a successful entrepreneur, a Stone, like a Sponge, does three things:

1. Displays fearlessness—and even shamelessness. Stones don’t just work 24/7; they work every angle. Consider Rajat Suri, the founder of E la Carte, which makes tabletop ordering systems for restaurants. He once recommended that I eat at a sushi place in Palo Alto, because of a  rumor that Steve Jobs ate there. I went expecting little more than good sushi but, as luck would have it, Jobs walked in halfway through the meal. I thought that was cool, snapped a pic of him from afar, and left, eventually emailing Rajat to thank him for suggesting the spot. What did Rajat, tireless opportunist and stone, do? He dashed to the restaurant, secured a seat next to Jobs, and started toying around with an E la Carte device as the Apple chief looked over his shoulder. Then there is Jason Jacobs, of Fitnesskeeper. He is known to run entire marathons dressed up in a full-sized iPhone suit with his company’s RunKeeper application illustrated on the front. Yes, that’s going the extra mile.

2. Believes the impossible is possible. When my partners and I founded BzzAgent, my fourth startup, we were turned down by nearly 200 different investors. We were actually thrown out of agencies, and marketers wouldn’t try our word-of-mouth marketing product even for free. My family did an actual intervention, where they sat me down and tried to talk me out of pursuing the business. But we persevered, believing above all else that the concept of BzzAgent was possible. At last we persuaded some clients to come on board. Three years later we were profitable, on $3 million in revenue, and we raised our first round of outside capital. By 2004 BzzAgent was a real, growing company. But only because we believed, beyond all else. (Our tenacity paid off: BzzAgent was purchased by a unit of Tesco this year.)

3. Engages in multiple projects at once. This is perhaps the most polarizing behavior that a stone (and sponge) will typically exhibit. Sponges and stones, by their nature, have incredible curiosity and, often, ideas and energy to burn. For example, Elon Musk currently runs Tesla, but he also heads up SpaceX, a space exploration company. And Jack Dorsey is back at Twitter, but he still runs Square, a mobile payments start-up. One of the greatest errors an investor, advisor or mentor can make is to try to get a multitasking stone to focus on just one opportunity. Activity is likely part of that person’s DNA, and he or she is just trying to feed an immense appetite for knowledge, create new connections, and take advantage of ideas efficiently. We need to allow more entrepreneurs and leaders to pursue all the challenges that inspire them. If they’re the right people, they’ll know how to manage their time. They already work harder than normal people and, more important, their various projects will only accelerate their absorption of data and information. In fact, if someone isn’t interested in multiple concepts, is it possible that’s not a sponge and stone at all?

In all likelihood you’re probably not the next Sergey Brin or Jeff Bezos. But don’t despair. If you are starting a company, responsible for part of an organization, or making bets on entrepreneurs, you are most likely to succeed if you act as both a sponge and a stone—or if you align yourself with that kind of person.

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The Importance of Being Humble

Thursday, September 15th, 2011

This is a cross-post of an article Dave Balter wrote here for CNBC.com.  For more discussions and thoughts on the importance of humility in business leaders, check out HumilityImperative.com.

We’re living in an era where many leaders are put on a pedestal.

CEOs are conveyed as all-powerful celebrities, and startup entrepreneurs are being given John Wayne-like hero treatment.

It’s no surprise then that many are showing signs of a fatal flaw: acting without humility.

I’d argue we’re entering an era where outsized egos are a warning sign of impending failure. Fail to keep yours in check and the only thing you’ll be leading is the search for a new job.

We’re seeing signals of this all around us.

For most of her career, Carol Bartz’s strong suit certainly wasn’t her humility, and Yahoo’s shareholders can attest to the result of that. Dominique Strauss-Kahn’s ego (and questionable morals) reportedly gave him a sense of invincibility, which cost DSK the French Presidency and any potential legacy. Hewlett-Packard had a fabulous CEO in Mark Hurd, until he resigned in what HP’s own general counsel called a, “profound lack of judgment that seriously undermined his credibility and damaged his effectiveness.”

While on a much different scale, startup CEOs and entrepreneurs are among the most ego-fueled leaders. In fact, I’d argue that today’s easy-to-get-funding and it’s-cool-to-be-a-CEO economy is actually fostering a sense of grandiosity that will eventually be the majority’s undoing. In NYC alone there are now dozens of incubators – from DreamIt to Tipping Point Partners and Betaworks and Startl – making it easy to leave your day job and become a startup CEO in seconds. Sites like Angel List are making it all too easy to become an investor or the invested. Even the awesome entrepreneur and investor, Naval Ravikant is being given the “you’re-amazing, just-add-water-to-grow-your-ego” treatment in this NY Times piece.

I recently returned from San Francisco where I saw at least a dozen startups, each with more than 20,000 square feet of space for fewer than 40 employees. “We’re going to grow fast,” their effusive leaders – fresh with cash – would boast.

But if the funded and funders don’t change something fast, the end is nigh.

And it’s not the money that’s the issue. It’s the hubris that comes with it.

I know of what I speak because I had my own great press, easy money and 22,000 square feet (to be exact) –and the ego that came with it nearly cost me my fourth startup, BzzAgent. Launched in 2001, by 2005 we were featured in a cover story in The New York Times Magazine and had A-list angel and venture investors. We were arguably the first company to monetize social media, with a network of volunteer consumers who shared their opinions with peers about products and services. We had real revenues and the best clients.

We. Were. Awesome.

But all of that led us to ignore the fundamental necessity of humility. One of the defining moments of the business came in late 2005 when a young buck showed up at our office and asked for a job. After a discussion, we politely declined with a “nice try, kid” and sent him on his way. He returned a few months later to thank us for chatting with him, and to let us know that he had taken a job at this thing called Facebook, which had 50,000 members (compared to our then 250,000) and no revenue model – and he’d be the 12th employee. I’ll never forget us laughing about the silly premise of Facebook after he left.

He eventually was a bigwig with Facebook’s East Coast sales and someone I had to call to “kiss the ring” if we wanted to get things done with Facebook (and his boss was a guy I used to hawk t-shirts to in the entertainment industry, no less). My ego made me underestimate them until they changed BzzAgent’s business forever.

This being just one story of our outsized egos, we had to learn our lessons the hard way.

By 2009, we had to cut nearly 50% of our staff and we spent the better part of a year reconsidering our business. I personally began the process of learning humility. I learned to listen more—to colleagues, friends, prospective employees, family. I was forced to trust my peers. I paid close attention to competitors and became thankful for every day we were fortunate enough to be running our business. We eventually turned things around, rebuilt and sold the company earlier this year for a sizeable return to a unit of TESCO PLC.

But only because we stopped acting like the press and funding made us more valuable than we actually were.

And that’s the lesson every single CEO, entrepreneur and leader needs to learn now. It’s never too early to start acting with the humility that can make you smarter—and save your business. This is one reason I helped develop The Humility Imperative project, a mashup of art and the collected stories of humble and ego-fueled leaders. If just one or two entrepreneurs learn this lesson before it’s too late, then we’ll consider this a success.

As for Carol Bartz, head of Yahoo until last week, some see her last email to Yahoo employees—“I’ve just been fired” — as an overly emotional and career-killing admission, but I see something different. I see someone who found humility and didn’t spin the facts into a mutual parting of ways. She was fired and she said as much, which is about as humble as you can get.

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Creating credible Brand Advocates and other Buzz

Thursday, June 30th, 2011

This is a cross post of an article appearing here on the Better Business Banter blog.

I recently spoke with Dave Balter, serial entrepreneur, CEO of BzzAgent, and radical agent of change in loyalty marketing. We focused on the characteristics of loyalty based marketing, the Net Promoter Score, and how to establish trust with customers.

For those who dont know, BzzAgent is a social marketing company that accelerates word of mouth to drive sales. Powered by a network of over 800,000 people, BzzAgent creates measurable business results for marketers through an influential advocate network, a powerful engagement platform, and a proven analytics approach. BzzAgent has been at the vanguard of word of mouth marketing since 2001, running more than 1,500 programs for global companies including Unilever, Wrigley, L’Oreal, and Michelin. They were recently aquired by Dunhumby, a division of Tesco, for close to $60MM to reinforce their social media marketing and analytics.

Here are some highlights of our conversation:

1.a BzzAgent focuses on a set of BzzAgents who are opinion makers and brand advocates in almost every social demographic. What are the characteristics and behaviors that you believe make a successful BzzAgent that best encourage product trial?

Dave: Our network has expanded to north of 800,000 individuals across the US, UK and Canada, and over the course of 2,500 programs, we’ve noticed some interesting trends.

We tend to find advocates aren’t classified by demographic data (or geographic!) but rather by personality type and what I’d call “product consciousness”. On the personality type front, we’ve done a number of studies on the subject, and we’ve found that advocates tend to be people who communicate for fun or altruism. One interesting data point is that advocates tend to share opinions about products and services as a way to relax (think of sharing with friends at a book club or over drinks). [Check out BzzAgent’s whitepaper on the characteristics of Brand Advocates]

On the “product consciousness” front, an advocate is someone who will pro-actively speak or share their opinion about a brand. In order for that to be authentic, the individual needs to have recognized their relationship with the product or service. In essence, they need to be aware of how much they like the product, which is often through very specific experiences that creates the willingness to share. Often an advocates will share their experience, not general information about a product or service!

1.b. Do these characteristics change depending on what type of product or social group you are targeting?

Dave: There are products that are likely to generate proactive sharing, and others that are reactive. For example, you might feel comfortable just telling a friend out-of-the-blue about a great new soda or a fragrance or even a cool digital service, which is an example of proactive sharing. It wouldn’t feel abnormal to the recipient of their friend talked with them about these products.

Reactive sharing often has to do with products or services that we don’t talk about as openly. That might be what credit card you use and why, or your insurance or highly personal products like feminine hygiene or an anti-anxiety drug. Sharing in these cases tends to happen once someone has sought out an opinion, but it may feel awkward to share about these products without being asked about first.

2. BzzAgent focuses a lot on measuring ROI of the campaigns it manages, especially around the # of conversations, new trials, and coupon usage. Do you ever go back and look at long term behavior and brand “stickiness” long after the campaign has finished?

Dave: We’ve focused on the ROI of social marketing for many years, and in the past few years we’ve seen some major breakthroughs. Specifically, we’ve been measuring programs using third-party Market Mix Models from companies like Nielsen and SymphonyIRI, which uses regression analysis to prove which marketing vehicles are driving what return – as well as Matched Market Panels, which compares return across an active market vs. a market without a program running. We’re proud to say the results are really dramatic – social marketing can be measured all the way to sales.

The future of measurement for social marketing will be to tie social to shopper marketing – in essence, measuring results via in-store purchase behavior. We recently were acquired by dunnhumby and you’ll see some significant evolutions of our models based on our ability to measure individual shopper behavior.

With all that said, yes we do go back to look at overall long-term brand behavior. This is valuable information about the value of an advocate over time, which can be immensely beneficial to a brand. That said, we really focus on more direct ROI as the key measurement for our programs. [Check out more whitepapers on how BzzAgent calculates the value of word of mouth, traditional advertising communications, and social media ROI]

3. A lot of companies focused on customer loyalty leverage the Net Promoter Score (NPS) in addition to customer satisfaction. What are your thoughts on NPS as a reliable measure of customer loyalty and what other measures do you look at to determine the health of a brand among consumers?

Dave: Truthfully, we think that NPS is an interesting metric, but is often misused and rarely provides enough deep insight to help companies engage and activate brand advocates. I’m a big fan of the concept, but think it’s best served as a way to evaluate whether your employees are happy or what your clients think of you than a measurement of brand advocacy.

4. One of the Principles of BzzAgent that you and your team established is “Making marketing a better place for marketers and consumers”. Where do you think the concepts of customer relevance, value and integrity break down in today’s more traditional marketing process?

Dave: We do see a landscape shift here, in most cases for the better, but there are still some abusive tactics going on. To the better, I think companies have started to really invest in their consumers by talking with them more directly via social media and engaging more quickly and efficiently. The days of the complaint letter are long over. Companies are recognizing the need to listen more often and more closely. Think Best Buy’s Twelpforce as a good example of the benefit to the consumer (better customer service) and to the company (solving problems more efficiently).

I still see quite a bit of abuse though – I’m particularly concerned with the continued attempts to place ads in every single place possible. We’ve got ads on taxi tops and at urinals and laser-displayed on the sides of buildings. Recently I noticed a company that was trying to embed ads into your apparel. For consumers, there just isn’t anything valuable about this – I don’t really believe the argument that this helps each of us become more informed. We’re now in a marketplace where the consumer gets informed by using the tools at their disposal (google, review sites, asking peers!, etc.). Marketers need choices that allow them to market in ways that the customer respects.

5. Are there any brands that you believe are doing a great job in engaging their customer and driving loyalty? What do you think they do that is so successful?

Dave: Well, any BzzAgent clients, of course!

Seriously, I’m a big fan of brands that embed loyalty right into their product. For my daughter’s 6th Birthday, I took her to the American Girl Doll Store, which could be one of the most impressive cases of creation of loyalty I’ve seen. These folks make the process of buying a doll an event to be remembered from the way they display the choices, to the way the staff is trained to share in the joy of the event (they gave my daughter a birthday sticker and the everyone on the staff went out of their way to wish her a happy birthday). Each doll comes with a special tag that allows you to create a digital version of your doll – a wonderful tactic to engage beyond the first experience…and maybe help parents spend just a little bit more with them! With a reservation, you can have a meal in the store, where they provide mini seats for the newly purchased doll, complete with mini teacup and saucer, crown and all sorts of other knick-knacks.

I think the code American Girl has cracked is the idea that it’s not just about the product, but about everything you do around it that counts.

6. Twitter seems to be the last big social media platform to arrive on the scene that filled an unmet need for a significant audience, coupling short content with the opportunity for celebrity or anonymity as followed and followee. What are some new or undiscovered social media approaches and companies that you think promise to be disruptors in the years ahead?

Dave: I’m paying a lot of attention to the reputation management space right now. I’m involved with a company called Smarterer (http://www.smarterer.com) which allows people to get scores on their digital, social and technical skills. Of course, people can then put their scores in places that matter. About.me is another in a similar vein where you can create your online bio in a way that really represents who you are. My sense is that part of the future will be people’s ability to really articulate who they are more effectively across any of the social media or digital platforms that comes along.

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Dave Balter, This Week’s Power Player on styleboston TV

Monday, March 7th, 2011

WCVB channel 5 in Boston has a weekly show called styleboston that highlights cutting edge fashion, design, nightlife and personalities in and around New England.   One of the show’s most popular segments is “Power Players” where they feature one-on-one interviews with New England’s captains of industry.  Previous guests have included the CEOs of Mullen, Communispace, Boston Beer Co, the CMO of Jet Blue, Governor Deval Patrick, and Bruins President Cam Neely to name a few.  This week’s captain is BzzAgent founder and CEO Dave Balter.

Click on the the image below to watch the segment.  You’ll get a good feel for our unique culture and some of Dave’s thoughts on social media, entrepreneurship and the one piece of clothing he can’t live without.

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Dave Balter on What’s Next & What’s Best

Thursday, October 28th, 2010

The 2010 WOMMA Summit is just around the corner.  This year’s event will be held from November 17-19 at the Paris Hotel in Las Vegas.  There will be over 50 educational session including keynotes from Josh Bernoff of Forrester Research and author of the new book “Empowered”, and from Jeremiah Owyang of the Altimeter Group.

Check out the event website for the full agenda and registration information.

As a governing member of WOMMA, we are looking forward to this years event.  We’ll have a booth in the exhibit hall and we are planning some exciting announcements.  Our CEO Dave Balter shared some of his thoughts about this year’s event on the WOMMA Word blog.

Will we see you there this year?

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EXCLUSIVE: Video Footage Pulled from the Monsters of Pork

Tuesday, October 12th, 2010

BzzAgent has obtained exclusive video footage from the Monsters of Pork party last week.   If you missed the party, this is your chance to get a look at one of the most unique networking events you’ll ever see.

Monsters of Pork was part of BzzAgent’s sponsorship of FutureM week here in Boston.  Many told us it was one of the highlights of the week and we are excited about all the buzz it generated.  As you’ll see in Dave Balter’s opening remarks in the video below, Boston has a great innovation community and we are thrilled to be a part of that ecosystem.

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Dave Balter at the FutureM Conference

Wednesday, October 6th, 2010

The FutureM conference is underway in Boston this week.  This week-long series of events features many of the leaders in marketing, media and technology discussing what’s new and what’s next in marketing.

BzzAgent is proud to be a part of this fantastic event.  Our CEO, Dave Balter, spend some time at the FutureM headquarters this week talking about the evolution of social media, how to get people to generate word of mouth, and why you shouldn’t miss the big BzzAgent “Monsters of Pork” party Wednesday night.   There’s some great stuff here.

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Halligan, Scott, Jerry, Bobby & Phil

Sunday, August 8th, 2010

Just like me, you’ve probably wondered: is Brian Halligan and David Meerman Scott’s new book, Marketing Lessons from the Grateful Dead, a gimmick or a classic?  Well, it’s a little of both.  The gimmick grabs you, but it’s the content that makes it a classic.

Full disclosure: so I’m a huge fan of the authors, and have seen more than one human’s fair share of Dead shows, but that’s where the bias ends.  This one hits it on the head because it taps into what makes for a good marketing tome these days.

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