Me and my research Peeter Verlegh
This third edition of Me and My Research features an interview with Peeter Verlegh. Peeter is Professor of Marketing and researches word-of-mouth marketing.
1. What research are you working on at the moment?
‘In my research, I am exploring word-of-mouth marketing, both offline, i.e. people talking to each other about products and services, and online in the form of online reviews and social media. This is my most interesting project at the moment and it involves two other colleagues: Jiska Eelen and Peren Özturan. We are exploring the relationship between brand loyalty on the one hand and word-of-mouth marketing, online and offline, on the other hand.
2. What results have you seen so far?
So far, and indeed this is reflected in the literature we have found, offline word-of-mouth marketing and loyalty seem to be strongly connected to each other. If you are loyal to a brand, you talk about it more. However, online this does not seem to be the case at all. If people are loyal to a brand, they are no more likely to write more reviews about it or post something about it on Facebook. The people who do that tend to be primarily people who already spend a lot of time on social media. Social media users post more of that kind of thing, which is, in itself, quite logical. But that has nothing to do with brand loyalty, whereas offline word-of-mouth does. What this means is that people managing brands cannot simply apply the old ideas and laws that they are accustomed to using offline online.
For example, if you are a frequent user of the Calvé brand of peanut butter, you will talk about it. But if you regularly use Calvé peanut butter on your bread, it is not particularly likely that you will visit the Facebook page and write a review about it. Anyone can do that, even people who never even eat it or only very occasionally. If you talk to marketing specialists, they often seem to believe that you can create brand loyalty via Facebook. We do not think that is the case.
3. What is your perspective on the shift from offline to online?
Many online campaigns also feature offline stimulus in the form of advertising or other variables, such as price and product design. The whole campaign is online, but it is difficult to spark interest in this kind of campaign totally online only. What is interesting is that the two worlds are poorly connected to each other. Online marketing specialists talk only about search engines, conversions and click-throughs. It has become a very quantitative world. It is not easy to say whether this is the right strategy for the longer term. It appears not to be the case. On the other hand, the traditional world is quick to conclude: ‘that's not for me’. This gap is something that needs bridging. In the academic world, there is slightly more of an effort to integrate things, but it is quite difficult. Especially if you start working with data, real data, and try to keep pace with the speed at which things are changing. This does not apply to laws and theories, but it does with more practical things. Papers and journals are now being published about internet data and social media data from 2010 and 2011, when the internet was actually quite different. The question is whether they really have anything to offer that we can learn from. It is quite a challenge.
4. What is your view of the net promoter score (NPS)?
It is a great tool. But too many expectations have been placed on it. It has been marketed as ‘the one number you need to grow’, as the original article by Reichheld stated. All you need to think about is that, then everything will be fine. Of course, that makes no sense. Actually, this is always the case when you rely on a single item: it simply doesn’t work. You always need to have several different indicators. Recommendation is always a good measure, but not in all cases or for all things and especially not in terms of share prices and profits. I do feel that these kinds of metrics are useful but also that something goes wrong in the processing of data. Simply separating promoters from detractors, and creating a model that at least includes two factors. Of course, a continuous score is not possible.
When I was in America, I was called by a company that had repaired something and I said: it went really well, I received good service. I gave them an 8. Then they literally asked: Why not a 9 or 10? When you start using a measure like that to decide things it also starts influencing people’s behaviour. The branch manager or salesperson then says: I will use the NPS as a management tool, pushing it up to a 10 or a 9, and I will get a bonus or do well in the company.
5. What issue have you always wanted to conduct research into?
The research I would like to do is something quite different, it would undertake touches base on concepts of marketing and sociology. I think it would be interesting to conduct research into beggars, buskers, tramps and what idea they have in their head about being able to sell things or get money and the strategies they apply. Where do they get these ideas from? How do they imagine it works? And, on the other side, to explore what factors determine whether you or I give money and investigate whether we can optimize that or use it in some other way.