Today we are with Martin Oetting, who's one of the founders of TRND, a European company based in Germany specialized in word-of-mouth marketing. Martin, which are the specificities of word-of-mouth marketing? Word of mouth marketing is all about companies trying to work with consumers in such a way that these consumers go away and have something to share about the company, have something positive to say about the company and its products to other people. It usually works based on an online environment, so companies will use some online platform. In many cases, designed for this purpose to engage their ambassadors. People they usually select for this purpose based on motivation based on interest, based on availability for a project. They engage with them on this platform and then the people go away and have something to talk about to share. Sometimes, they get products also shipped by post that they can share with other people. So it's all about creating an intensive dialogue with those people whom you want to spread the word about you, that's really at the core of word-of-mouth marketing. Word-of-mouth marketing is getting more and more important, also in food and beverage businesses. What are the reasons why this importance is increasing? I think there are two reasons. One is that companies are beginning to realize, because of the social web, how powerful their consumers are. We sometimes think that, because people can post things on Facebook now a days or somewhere else on the web, that's why their becoming powerful. But in fact, consumers have always been powerful. You could run as much advertising as you wanted, if your friends told you that product isn't worth the price, that advertising didn't help. Now a days, we see that on Facebook, on blogs, on Twitter, and elsewhere on the web, on review websites. And so companies are beginning to think, we have to work with these people. There are so many consumers out there who are doing stuff, either for us or against us and we have to become part of the conversation in an active way. And the other thing is for food products, in particular the experience is so important. If you like something, if you don't, if the flavor or texture or something is suitable to your taste is something you best experience. And word-of-mouth marketing is also a way to put the right product into the right hands of people who then and this is interesting, target perfectly. If I know that you don't like chewing gum, I'm not going to come with the chewing gum to you. If I know that somebody else is quite crazy about, I don't know, muffins or some other type of food product. If I have something to share, because the company invited me to become their ambassador, I will really target that person, because I know that I can make them happy. So food and the experiential nature of food and the immediate response that you can have to food, really lends these products to word-of-mouth marketing. So what do you think are the main differences of word-of-mouth marketing compared for example to advertising, which has been always a very fundamental tool in marketing communication all over the world? I think the most important difference in terms of how the approach works between word-of-mouth marketing and pretty much all other kinds of marketing communications is that in the traditional advertising approach, you always put the brand on stage. The idea is to make the brand, the product, look appealing, amazing. Sometimes you pay a celebrity to just hold the product, you want to make the product look great. In word-of-mouth marketing, you have to make the people who use the product look great. So what we do in our approach is put the consumers on stage with a brand rather than the brand on stage telling consumers, it's a great brand. We have to tell people, you are important, you are making a difference. We count on your competence. We need your help and let us find out what this product can do for our friends, for everybody that we know. Let's share it at the office and see what other people are saying and then please tell us, how things are going. So rather than the brand celebrating itself, the brand celebrates it's consumers. So the relationship is completely inverted. The balance of the relationship. And which is the specific model, if any that TRND uses? How do you make this word-of-mouth marketing work for the companies you are working with? We have, for over ten years now, developed and perfected an approach in which we understand all the mechanisms, all the elements. So if you imagine a brand wants to involve 5,000 people all across the country who share the product, spread the word about the product and you don't know exactly what you're doing, that can backfire. So we have worked hard first on small campaigns with 50, 300 maybe 1,000 people. And over the years, going into projects that nowadays can have 20,000 participants. Really fine tuning the approach and turning it into something that we can reproduce again and again and again in a reliable way, so that word of mouth marketing doesn't become an experiment. Maybe it works, maybe it won't, but that it becomes something that you know is reliable and works in always the same way. Particularly, when there's a problem with the product, which some people think really destroys your word-of-mouth marketing, but it doesn't if you do it right. If people find a fault in the product or there's something that they don't like in well-organized word-of-mouth marketing, you have this dialogue in which you can then solve a problem. You can say to people, oh, it's not working for you? Wow, that's interesting. Tell us exactly how. And focus their energy on the feedback rather than on going around and telling everyone that the product isn't great, because people don't want to spread as much negative word-of-mouth as marketers sometimes think. There's this saying, people spread a good message to three people and a bad one to ten. Not quite true. When people sign up for a project like that, when they apply for the campaigns, people have to apply to our campaigns and are really motivated and then they are somewhat disappointed with the product. It's not that they're going to tell everyone, I was so excited and now I'm sad. They're going to come to us and talk to us about it and then we can say, well, this is interesting feedback, the brand didn't know this that people such as yourselves might have this problem with the product. So, I think what we do has two specifics. The first one is we have fine-tuned the mechanisms over a decade now and we have such a heavy focus on the direct dialogue with people. We don't just send things to people and hope for the best, but we are in constant exchange with them and I think those are the two elements that are most important for our work. Yeah, but how does the process work? When a company approaches you, so you basically have a list of people belonging to a platform. How does it work? We have two fundamental approaches, either we use our own platforms. We have TRND branded online communities, where we have over 1.7 million members all across Europe or we can integrate our technology solution into a platform of a client. So a client sometimes has a website with a CRM database and we can use those, as well. And then what we start with is an invitation to those people that we have preselected for this project. Let's say on our own platform, we want to run a campaign in Spain. Our Spanish team, our colleagues there have a database with I think over 300,000 members and they know those member, because they've been running projects with them for years and we have profiles of these people. They tell us what they like. They tell us what they don't like. So we make a preselection and then people have to actually apply they're invited, they get what we call a ticket. They have to apply and convince us and the brand that they're the right people. So we're really turning things around rather than the brand advertising itself to the consumers, the consumers advertise themselves to us and the brand. And then once they're selected, we connect them with the brand, we give them the product to share with people. And we start this dialogue on the web, showing them that the brand is really interested in what they have to say and these two things connecting them with the brand and selecting them moves them into action. They start sharing, they talk to friends, they say, we hear the project is here I signed up for this a few days ago. And while they do that, they have questions, they have insights, they have ideas, they have doubts from their friends. Those they send back to us and we help them. We have this ongoing dialog throughout the project, so that the people really feel like I'm a VIP in this process. It's not the brand advertising at me, it's the brand listening to me, speaking to me and helping me look even better in front of my friends with this new product that I have discovered and that I can share with them. And at the end of the project, we analyze all the data. Our data collection is standardized, so we can then go to the client and say, look, this is what happened. Here's where your product is amazing. Here's where people had input and questions. Here's where there was maybe a few negative aspects and here's the conversations they created and what their friends were saying, so that is really the process. How are they rewarded, so people who participate in your campaigns, do you reward the in some way or they just do it, because they are willing to contribute? That's a good question, because sometimes people ask us, well, you must be paying them. Why would they send in photos and write reports about their activity and fill out two surveys or three and write comments on the blog? You're paying them, right? No, we're not. That is exactly the point. The web has allowed us to actually see things that we couldn't see before, that consumers are more motivated and more willing to do stuff for brands than brand ever thought they were. So by finding the right people who are motivated, by connecting them with a brand in a meaningful way and also by giving them the product. I mean, when you want to share a food product with people, we want to give you that chance. We want you to have the chance to try the product, so they do get the product and 95% of the cases. But other than that, no payment. Because we want people to do what they do, because they like to and not because they get paid for something. That's fascinating. And can you give us an example of a company in food or beverage business that you think has organized or implemented a campaign, which is particularly effective or successful? Yes. We ran two campaigns actually for a regional cola brand in Germany and I liked this project, because for one, it was not one of the global players. We work a lot with P&G or with Samsung or with companies like that, but this one was a more regional player, Germany part of the Hausia group, which is a beverage group in Germany and they ran a campaign for a particular type of cola with us. They were rebranding it, it was one variant one particular taste variant of this cola that they're making, which was only available in part of Germany in what used to be the former East Germany, because that's where they come from, let's say, heritage. They actually existed before the Iron Curtain fell and the brand was then acquired by Hausia group and they ran a couple of campaigns with us and it was interesting for a number of reasons. One was there was a nice element in the campaign. I said that we sent starter kits to people when they get the product to share with others. Here we actually sent cola bottles to people, which made for a fairly heavy pack. And we included in this pack, these little things that you usually get on airplanes to cover your eyes when you want to sleep, but they were branded with the name of the brand, Vita Cola and people were invited to use them for blind testing. We call this is a one trigger, so little element in the campaign that give people another reason to talk with friends. So they would put on these things that cover their eyes and they would buy other cola, as well. Actually, we stimulated a bit of the competition as well, because they had to buy other cola to do blind testing, then people tested the product. And thereby, found out how much they actually enjoyed a Vita Cola, which shows that their brand was very confident in their quality. That was a nice element, because it made for fun photos. People would post photos of everybody wearing these eye covers and it created nice effects, because people really did these blind tests. Another reason why that was interesting was that we did a market analysis with a research team at a university in Frankfurt Oder and they used Nielsen market data to do a type of marketing mixed modeling approach. And they showed us that during the months where we ran the campaign alone, sales rose by around 20% per month. And so in the sense of showing that there is an impact, this was nice, because there was no other media. So that was a good way of showing that our campaigns actually do help sell products. And finally, I like this project, because we ran a second campaign, a subsequent campaign for the same product in which we invited people to share with us the craziest ways they found to share the product with their friends. And in that campaign, we actually had one guy who was a parachuter and he jumped out of an airplane with a GoPro camera on his helmet and his friend also had a GoPro camera. They had brought the bottles with them, they had them in their pants pockets and they got them out while flying through the air and they drank the cola in midair and filming it. They submitted that film on YouTube and we loved this example, because it's such a powerful way of showing that consumers love to support brands in ways that brands would never come up with. And as far as I know, Vita Cola is actually now using a photo of this guy flying with a cola in his hand on their packs. So that's why I really like the work we did with those guys, because it's such a nice collection of beautiful things that happened in the campaign. And taking this as an example, would you or which way would you sum up the elements that make a word-of-mouth campaign successful or effective? I think there's sort of three classes of elements that play a role. The first class is the approach I spoke about. The fact that we have developed what we do over such a long time that we understand the mechanisms, that that is reliable and working. The second important influence is the product itself. We can do as much as we want, if we have a product that is not performing, where people say, sorry guys, but you said the product does this and it doesn't even get there. You have no campaign, because people need to have the experience that they expect. Ideally, even a little better, but at least the experience that they expect. So the product performance is key. And then thirdly, sometimes in a campaign, either a client comes up with an additional idea that gives it a bit of topspin, a bit of momentum or we do it, because the client says, I would like to have additional warm triggers, additional things that motivate people and that can be a nice additional effect. In this campaign, we had all three. We had our processes that we understand, we had a product that people loved and we had additional ideas that gave it top spin, like these eye covers and stuff. So, I think that's why it was working. Martin when I talk with managers and entrepreneurs, especially in the food and beverage businesses, small companies tend to complain about the fact that they cannot afford a marketing campaign or a communication campaign. So, is word-of-mouth marketing affordable for more companies? It is very much affordable. It is actually, in some ways more accessible to them than it is to large corporations, because word-of-mouth marketing is primarily based on a real intensive dialog with the right consumers. With those consumers who like you, who are willing to help you and support you. And we have found that if brands actually, really sort of listen to what's coming back and take the feedback from the participants on-board, because there's always feedback. We do this to get people talking, but they won't talk if we don't listen to them, if we don't hear what they have to say. And those companies who take that input, implement it and then maybe six months later, say to people, look we heard you, we changed the product and now here's the new version, which has your improvements in it. They can really make a difference and get those people even more excited, that is easier for small companies to do. If you are a large corporation and you have people sitting in Singapore doing product development and people sitting in London doing global marketing, it's very difficult to implement these ideas. But if you're a smaller company and you're willing to listen to your consumers, you can really delight them with an openness and with a readiness to be there for them that the large corporations don't have. So I think working with word-of-mouth, working with ambassadors, getting people closer to the company is something that small companies can do. And we actually starting to change our work, we're now calling it collaborative marketing. Because we think that ultimately, it's all about working with consumers. We've found that consumers are willing to work with brands. The brands that respect them. Not brands that just throw advertising at them and leave them be, but the brands that are opening up to them. They can really get support and yeah, work from consumers who are saying, these people are great. Let's do something for them. Let's help them with this. Let's help them with that. And that's something that smaller companies actually have an easier time organizing, I think than the big companies. Thank you, Martin for such an interesting conversation. Thank you, Gabriele. Pleasure.