halverson group: word of mouth presentation

HALVERSON GROUP proprietary and confidential.1

Decision Dynamics and the Micro-Motives for Consumer

Engagement Study

excerpts from Micro-Motives Channel Insights Brief:

Word of Mouth (WOM)

Presented to WOMMA 2015

By Halverson Group


We’re focusing on WHY

We’re going to talk about WHY people engage in WOM


What You’ll Walk Away With

2 key frameworks that you could apply immediately

• 6 Decision Dynamics™ that explain the thought process leading

consumers to WOM

• 13 micro-motives in the consumer journey and the role of WOM

SOURCE: Halverson Group 2014 Micro-Motives for Consumer Engagement Study Excerpts from Micro-Motives Channel Insights Brief: Word of Mouth (WOM)


WOM is important – not a surprise to anyone here

“the most powerful force shaping consumer behavior”

“the dominant decision clincher”

“the ultimate test of the customer’s relationship”

“a dominant force in the marketplace”

“the gift that keeps on giving”

1954

1967

1997

1999

2009


Understanding WHY prospects and consumers make the choices they do is critical for delivering the right experience, in the right format on the right devices when the consumer is ready


The underlying Motives for WOM have largely remained the same over the millennia – even though digital has exploded the options for consuming, creating and sharing information and experiences.


Our philosophy

There are 3 principles that we believe fuel winning strategies

Widen the aperture

and shift

perspectives

Deconstruct the

product or channel

into its smallest

parts

Build it back up in

ways that matter


WOM in context of ALL journey Touchpoints

1

How do we uncover

the Role of WOM in

today’s Omni-

Channel Journey?

Critical to capture

the digital and non-

digital touchpoints

and which

combination and

order consumers

use each

touchpoint


need /

want

decide

buy

receive

experience

WO

M a

cro

ss th

e c

on

su

me

r jo

urn

ey

2

How do we uncover

the Role of WOM in

today’s Omni-

Channel Journey?


1

WOM plays a

dramatically

different role

depending on your

phase in the journey


need /

want

decide

buy

receive

experience

WO

M a

cro

ss th

e c

on

su

me

r jo

urn

ey


High involment

vs. low

involment

Long purchase

cycles vs. short

purchase

cycles

High price vs.

low price

Simple vs.

complicated

2

1

3

How do we uncover

the Role of WOM in

today’s Omni-

Channel Journey?

Role of WOM shifts

depending on

product category


A few facts and figures about WHAT types of WOM occur in WHICH categories


of people engage in WOM in a consumer journey

64%



We measured 70 discrete behaviors that could be

considered WOM(plus an additional 80 that were not WOM)



0

10

20

30

40

50

60

70

80

90

100vacatio

n

dig

ital m

usic

serv

ice

tele

vis

ion

cable

tv

serv

ice

movie

tic

ket

bee

r

car

insura

nce

jeans

make-u

p

chew

ing g

um

gro

und c

offee

gla

ss/w

ind

ow

cle

aner

facia

l tissu

e

The presence of WOM varies greatly by category

% people who engaged in WOM the last time they purchased the following

categories…



And compared to all other touchpoints consumers engage in, the weight of WOM varies

0

10

20

30

40

50

60

70

80

90

100vacatio

n

dig

ital m

usic

serv

ice

tele

vis

ion

cable

tv

serv

ice

movie

tic

ket

bee

r

car

insura

nce

jeans

make-u

p

chew

ing g

um

gro

und c

offee

gla

ss/w

ind

ow

cle

aner

facia

l tissu

e

Share of WOM in the journey (last time they purchased category)

% people who engaged in WOM the last time they purchased the following categories…



And compared to all other touchpoints consumers engage in, the weight of WOM varies

0

5

10

15

20

25

30

35

40

45vacatio

n

dig

ital m

usic

serv

ice

tele

vis

ion

cable

tv

serv

ice

movie

tic

ket

bee

r

car

insura

nce

jeans

make-u

p

chew

ing g

um

gro

und c

offee

gla

ss/w

ind

ow

cle

aner

facia

l tissu

e

Share of WOM in the journey (last time they purchased category)

SOURCE: Halverson Group 2014 Micro-Motives for Consumer Engagement Study Excerpts from Micro-Motive Channel Insights Brief: Word of Mouth (WOM)% people who engaged in WOM the last time they purchased the following categories


0

5

10

15

20

25

30

35

40

45vacatio

n

dig

ital m

usic

serv

ice

tele

vis

ion

cable

tv

serv

ice

movie

tic

ket

bee

r

car

insura

nce

jeans

make-u

p

chew

ing g

um

gro

und c

offee

gla

ss/w

ind

ow

cle

aner

facia

l tissu

e

Digital WOM plays a much stronger role in vacations, digital music, cable service and jeans

Share to Digital WOM

Share to Non-Digital WOMCAR

INSURANCE

IS HEAVILY

NON-DIGITAL



0

5

10

15

20

25

30

35

40

45vacatio

n

dig

ital m

usic

serv

ice

tele

vis

ion

cable

tv

serv

ice

movie

tic

ket

bee

r

car

insura

nce

jeans

make-u

p

chew

ing g

um

gro

und c

offee

gla

ss/w

ind

ow

cle

aner

facia

l tissu

e

The ratio of creating versus consuming WOM also shifts by category

Share to Creating WOM

Share to Consuming WOMNON-DIGITAL

+

CREATION



0

5

10

15

20

25

30

35

40

45vacatio

n

dig

ital m

usic

serv

ice

tele

vis

ion

cable

tv

serv

ice

movie

tic

ket

be

er

car

insura

nce

jeans

make-u

p

chew

ing g

um

gro

und c

offee

gla

ss/w

ind

ow

cle

aner

facia

l tissu

e

And some categories involve more one-to-one WOM

Share to Broad WOM

Share to One-To-One WOMNON-DIGITAL

+

CREATION

+

ONE-TO-ONE

% people who engaged in WOM the last time they purchased the following categoriesSOURCE: Halverson Group 2014 Micro-Motives for Consumer Engagement Study Excerpts from Micro-Motive Channel Insights Brief: Word of Mouth (WOM)


-30 -20 -10 0 10 20 30

Facial Tissue

Glass Cleaner

Ground Coffee

Gum

Make-up

Jeans

Car Insurance

Beer

Movie Tickets

Cable Service

Television

Digital Music Service

Vacation

Share of WOM pre and post purchase

pre post

WOM occurs throughout consumer journeys with the majority happening prior to a purchase

% p

eople

who e

ngaged in W

OM

the last tim

e

the

y p

urc

ha

sed

the

follo

win

g c

ate

go

rie

s

VERY LITTLE

POST-PURCHSAE

SOURCE: Halverson Group 2014 Micro-Motives for Consumer Engagement Study Excerpts from Micro-Motive Channel Insights Brief: Word of Mouth (WOM)


Non-Digital(face-to-face, on the phone)

Direct Digital(via text, email, etc.)

Platform(social media, blogs, review sites, etc.)

Co

ns

um

e(p

assiv

e)

Received recommendations

Observed others

Received

recommendations

Viewed status

Read content

Read reviews

Viewed images/videos

En

ga

ge

/Cre

ate

(active)

Gave recommendations

Discussed with others

Gave recommendations

Discussed with others

Sent a photo/video

Updated status

Posted a comment, photo or video

Asked a question

Wrote a review

Not all WOM is created equal

Predominantly one-to-one Predominantly widespread



Non-Digital(face-to-face, on the phone)

Direct Digital(via text, email, etc.)

Platform(social media, blogs, review sites, etc.)

Co

ns

um

e(p

assiv

e)

17% 4% 21%

En

ga

ge

/Cre

ate

(active)

32% 13% 13%

Predominantly one-to-one Predominantly widespread

Creation of WOM happens to a greater degree in non-digital ways; consumption on platforms



Not all categories are created equal

Non-Digital Direct Digital Platform

Co

ns

um

e

9% 7% 20%

En

gag

e/C

r

ea

te

51% 6% 6%

Car Insurance (65% pen)

Personal Interactions and

Recommendations:Talked in person or on the phone

with a family member

Talked in person or on the phone with someone I

did not know personally

Gave a recommendation in person or on the phone

to a family member



Why do people engage in WOM to various degrees and in different ways in different categories?

6 Decision Dynamics™ that explain the

thought process leading consumers to WOM


25 | HALVERSON GROUP

It was a habitual purchase

I tried all the options

I did not explore many optionsI made a quick decision

I put very little effort into itI paid a lot of attention

It was more about thinking than doing

It was a highly considered purchase

I tried no other options

It was more about doing than thinking

I explored many options

I put a lot of effort into the choice

I did not pay attention

It was an easy choice

It was a simple choice

It was a difficult choice

It was the most convenient option

I got all the options I wanted

It was a complicated choice

It was the least convenient option

I compromised between attributes

I went with the

most familiar

I stayed in my comfort zone

I made an expected choice

I played it safe

I had a lot of info

to support best option

I tried something new

I went outside my comfort zone

I made an unexpected choice

I took a risk

I took a guess at

which was best

I considered the

long-term consequences

If chose the wrong brand, no big deal

I did not much have much to lose

if I didn’t make a good choice

I did not consider the long-term consequences

if I chose wrong brand,

it could be a big deal

I had a lot to lose if I didn’t make a good choice

It was not an enjoyable decision

I had a lot of fun

I got very little out

of the experienceI did not have fun during the process

It was an enjoyable decisionI got a lot out of the experience

I went with my head

I used logic and reasoning

It was more about thinking than feeling

It was more about doing than thinking

I went with my heart

I used instincts and intuition

It was more about feeling than thinking

It was more about feeling than doing



How much EFFORT is put in?

Are you operating with the HEAD or the HEART?

How COMPLEX is the decision?

Is it a RISK to get it wrong?

Do you want to stay in or get out of your COMFORT ZONE?

Do you get ENJOYMENT out of it?

Cross-CategoryDecision Dynamics Model



High

Effort

Low

Effort

was a habitual purchase

tried all my options

did not explore many optionsmade a quick decision

Put very little effort into it

paid a lot of attention

more about thinking than doing

a highly considered purchase

tried no other optionsmore about doing than thinking

explored many options

put a lot of effort into the choice

did not pay attention

Complex

Simple

was an easy

choice was a simple

choice

was a difficult

choice

was the most convenient

option

got all the options I

wanted

was a complicated

choice

was the least convenient

option

compromised between

attributes

Open to

Change

Routine

went with the

most familiar

stayed in my comfort zone

made an expected choice

played it safe

had a lot of info

to support best option

tried something new

went outside my comfort zone

made an unexpected choicetook a risk

took a guess at

which was best

Low

Risk

High

Risk considered the

long-term consequences

If chose the wrong brand, no big deal

not much to lose if not

a good choice

did not consider the long-term consequences

if I chose wrong brand,

it could be a big deal

had a lot to lose if not a good choice

High

Reward

Low

Reward

not an enjoyable decision

had a lot of fun

got very little out

of the experience

did not have fun

was an enjoyable decision

got a lot out of the experience

HeartHeadwent with my head

used logic and reasoningmore about thinking than feeling

more about doing than thinking

went with my heart

used instincts and intuitionmore about feeling than thinking

more about feeling than doing



High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

Televisions

Cable TV Services

Car Insurance

Vacations

Streaming/Digital Music Services

Jeans

Make-up

Movie Tickets

Chewing Gum

Beer

Ground Coffee

Facial Tissue

Glass/Window Cleaner

The Cross-Category Decision Dynamic Map

Reveals the organizing principles of decisions in consumers’ minds



High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

Televisions

Cable TV Services

Car Insurance

Vacations


Jeans

Make-up

Movie Tickets

Chewing Gum

Beer

Ground Coffee

Facial Tissue


Decision Dynamics predict the amount of time spent in the journey

26 days

on average

9 days

on average



High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

Televisions

Cable TV Services

Car Insurance

Vacations


Jeans

Make-up

Movie Tickets

Chewing Gum

Beer

Ground Coffee

Facial Tissue


As well as the effortHigh effort decisions lead to longer journeys, but the ‘heart’ further intensifies the engagement

9 days on average

15 behaviors

9 days on average

23 behaviors

25 days on average

37 behaviors

26 days on average

63 behaviors



High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

Televisions

Cable TV Services

Car Insurance

Vacations


Jeans

Make-up

Movie Tickets

Chewing Gum

Beer

Ground Coffee

Facial Tissue


Decision Dynamics predict WOM

High Effort +

High Heart

Categories

81% use

WOM

High Effort +

Low Heart

Categories

76% use

WOM

Low Effort +

High Heart

Categories

62% use

WOM

Low Effort +

Low Heart

Categories

38% use

WOM



High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

Televisions

Cable TV Services

Car Insurance

Vacations


Jeans

Make-up

Movie Tickets

Chewing Gum

Beer

Ground Coffee

Facial Tissue


Decision Dynamics predict WOM

2.5x

WOM



Effort + Heart

Categories

3 x Social

Media

Effort + Head

Categories

5 x Experts

High Effort

Categories

2.3 x Reviews

High Heart

Categories

1.6 x Direct

WOM

Televisions

Cable TV Services

Car Insurance

Vacations


Jeans

Make-up

Movie Tickets

Chewing Gum

Beer

Ground Coffee

Facial Tissue


High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple



We know the Decision Dynamics that drive people to WOM at a macro level. But what are their

motives for turning to it at various points within the consumer journey?

13 Micro-Motives in the consumer journey

HALVERSON GROUP for Tom, Dick & Harry Creative co. 35

DreamFulfill a dream

Spark my imaginationEscape and take a mental break for awhile....................

ExperienceEnjoy my purchase

Experience the product firsthand....................

EmbraceFeel proud and accomplishedEmbrace my choiceCelebrate

....................

ShareGive others support / advice…

Tell others about my experienceShow off my purchase....................

Receive/SolicitCheck out what those in the know had purchasedLearn from others experiences and/or mistakes....................

Make It WorkAdjust or make changesDecide whether or not to keep the productPrevent others from making the same mistake....................

Discover the Big PictureSee the bigger picture

Figure out where to startLinger over all the options and choices....................

Ease DoubtEase my skepticismGet comfortable with my choiceAvoid having regrets or second thoughts....................

Explore OptionsSort through all the options…

Develop an initial set of options....................

Refine & DecideRe-evaluate my optionsNarrow down and refine my options

....................

SimplifyFind the easiest, most convenient

way to purchaseAvoid overthinking the decisionSkip all the upfront work and research....................

ExecuteBuy the productMake my purchaseStick with what works....................

Find a DealLook for deals or discounts…

Get a deal or save moneyCompare prices....................

We’ve identified 13 ‘micro-motives’ for touch points

*examples of key motives



We’ve identified 13 ‘micro-motives’ for touch points

Social

Solo

Connect

MAKE IT WORK

Get it done

Investigate

SIMPLIFY

EXECUTE

Big picture

In the weeds

FIND A DEAL

With others

EmotionallyImagine

EXPERIENCE

SHARE

RECEIVE / SOLICIT

DISCOVER THE BIG PICTURE

EASE DOUBT

EXPLORE OPTIONS

REFINE & DECIDE

EMBRACE

DREAM


HALVERSON GROUP proprietary and confidential.37need / want decide buy receive experience

RECEIVE / SOLICIT


EXPLORE OPTIONS

EASE DOUBT

REFINE & DECIDE

FIND A DEAL

SIMPLIFY

EXECUTE

EXPERIENCE

MAKE IT WORK

EMBRACE

SHARE

DREAMWe’v

e id

en

tifi

ed

13 ‘

mic

ro-

mo

tiv

es

’ fo

r to

uc

h p

oin

ts



RECEIVE / SOLICIT


EXPLORE OPTIONS

EASE DOUBT

REFINE & DECIDE

FIND A DEAL

SIMPLIFY

EXECUTE

EXPERIENCE

MAKE IT WORK

EMBRACE

SHARE

DREAM

WOM largely anchors

the beginning and the

end of the journey


We’v

e id

en

tifi

ed

13 ‘

mic

ro-

mo

tiv

es

’ fo

r to

uc

h p

oin

ts


RECEIVE / SOLICIT


EXPLORE OPTIONS

EASE DOUBT

REFINE & DECIDE

FIND A DEAL

SIMPLIFY

EXECUTE

EXPERIENCE

MAKE IT WORK

EMBRACE

SHARE

DREAM

Prevent others from making the same mistakes that I did

Get a response from friends or family

Dream about owning the product

Get the opinions of others I trust


We’v

e id

en

tifi

ed

13 ‘

mic

ro-

mo

tiv

es

’ fo

r to

uc

h p

oin

ts


RECEIVE / SOLICIT


EXPLORE OPTIONS

EASE DOUBT

REFINE & DECIDE

FIND A DEAL

SIMPLIFY

EXECUTE

EXPERIENCE

MAKE IT WORK

EMBRACE

SHARE

DREAM

Non-Digital, Reviews, Blogs, YouTube

Twitter, Consumer Reviews

Facebook, Instagram, Pinterest

Direct Digital, Facebook, Forums, Non-Digital


We’v

e id

en

tifi

ed

13 ‘

mic

ro-

mo

tiv

es

’ fo

r to

uc

h p

oin

ts


DO THE MICRO-MOTIVESCHANGE BY CATEGORY?


RECEIVE/SOLICIT

DISCOVER THE BIG PICURE

EXPLORE OPTIONS

EASE DOUBT

REFINE DECIDE

FIND A DEAL

SIMPLIFY

EXECUTE

EXPERIENCE

MAKE IT WORK

EMBRACE

SHARE

DREAM

RECEIVE/SOLICIT


EXPLORE OPTIONS

EASE DOUBT

REFINE DECIDE

FIND A DEAL

SIMPLIFY

EXECUTE

EXPERIENCE

MAKE IT WORK

EMBRACE

SHARE

DREAM

RECEIVE/SOLICIT


EXPLORE OPTIONS

EASE DOUBT

REFINE DECIDE

FIND A DEAL

SIMPLIFY

EXECUTE

EXPERIENCE

MAKE IT WORK

EMBRACE

SHARE

DREAM

RECEIVE/SOLICIT


EXPLORE OPTIONS

EASE DOUBT

REFINE DECIDE

FIND A DEAL

SIMPLIFY

EXECUTE

EXPERIENCE

MAKE IT WORK

EMBRACE

SHARE

DREAM

For those that are

complex and high

risk, people are

seeking rational

engagements that

help them decide

For low reward, low

effort categories, the

lack of engagement is

reflected in a lack of

motivation to change

and engage

In highly rewarding

categories, people

are engaged in the

full journey,

celebrating, sharing

and dreaming

Low risk and simple

categories are often driven

by the anticipation of the

experience itself –

engaging in a lot in a short

amount of time

Decision Dynamics related to the ‘micro-motives’ for any journey engagement

High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

Televisions

Cable TV Services

Car Insurance

Vacations


Jeans

Make-up

Movie Tickets

Chewing Gum

Beer

Ground Coffee

Facial Tissue




High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

Televisions

Cable TV Services

Car Insurance

Vacations


Jeans

Make-up

Movie Tickets

Chewing Gum

Beer

Ground Coffee

Facial Tissue


However, certain

segments or

situations within a

category may reveal

different opportunities

for WOM

The epicenter of category is fairly static



High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

AWAY FROM

HOME

BEVERAGES



However, certain

segments or

situations within a

category may reveal


for WOM


High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

TRAVEL

BUSINESS TRIP

VACATION

PLAYDATE

KIDS ACTIVITIES

COMMUTE

WORK OUT

ROAD TRIP

SHOPPING

MEET FRIENDS

RUN ERRANDS

FOOD/BEV RUNS

MID-DAY BREAK



However, certain

segments or

situations within a

category may reveal


for WOM


High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

JEANS



However, certain

segments or

situations within a

category may reveal


for WOM


High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

Jeans <=$25

Jeans $26-$40

Jeans $41-$79

Jeans $80 +



However, certain

segments or

situations within a

category may reveal


for WOM


High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

Jeans <=$25

Jeans $26-$40

Jeans $80 +

More Time + Effort

(20 days/92 behaviors) with a

longer post-purchase (6 days)

Slightly more in-store behaviors

PLUS WOM, digital, direct, search,

traditional

79% use some form of WOM (much

more amplified)

- 31% is non-digital

- 40% is one-to-one

Less Time + Effort

(15 days/20 behaviors) almost all

pre-purchase (13 days)

Primarily reliant on in-store

behaviors

43% use some form of WOM

- 65% of WOM is non-digital

- 72% is one-to-one

Jeans $41-$79



High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

Jeans <=$25

Jeans $26-$40

Jeans $80 +

MULTI-FACETED AND AMPLIFIED

Posted a status update or

picture/video on Facebook get a

response from friends and family

Searched for or visited the

YouTube channel of a company to

discover or learn something new

Talked in person to a co-worker

show off my purchaseJeans $41-$79

SINGULAR IN FOCUS AND MUTED

Talked in person or on the phone

with a family member about jeans

so they could

skip all the upfront work and

research



IMPLICATIONS


High

Effort

Low

Effort

Open to

Change

Routine

High

Reward

Low

Reward

HeartHead

Low

Risk

High

Risk

Complex

Simple

The challenge/opportunity for WOM: Opportunity to optimize our WOM efforts and investments by understanding underlying motives WOM to continue the

conversationWOM to extend

and ignite passion, be in

the know; several

opportunities

WOM as

entertainment; appeal

to emotional side

WOM to amplify

the fun/frivolity

WOM to engage

and entice a

conversation

WOM as

breakthrough; limited

opportunity to grab

attention

WOM as

information; appeal

to rational side

WOM to simplify

and ease doubt



Opportunity to Optimize WOM efforts and investments by understanding underlying motives

FUEL Content strategy

and creation

PINPOINT the optimal communication channel to

target specific consumers to accomplish a specific

goal

IDENTIFY the

best influencers

DELIVER the right experience, in the right format

on the right devices when the consumer is ready


WHO WE ARE Halverson Group is a strategic research agency committed to helping clients and their agencies identify where to play and how to win.

We unlock growth and competitive advantage by uncovering and quantifying insights into people’s lives and the behaviors, beliefs, attitudes, situations, and cultures that influence their choices.

For nearly 20 years, we have armed executives, marketers, strategists, innovators, and agency partners with the consumer and business intelligence they need to more confidently make bold strategic decisions.

OUR TEAM

We have assembled a highly

specialized team of Social Scientists,

Data Scientists, MBAs, and

Marketing & Branding Veterans to

provide our clients and partners with

the deepest and most actionable

insights in the industry to fuel game-

changing strategies and tactics.


CONTACT US

Ron Halverson, Ph.D.

President, Halverson Group

[email protected]

Mindy Cultra

Managing Director, Halverson Group

[email protected]

mailto:[email protected]

mailto:[email protected]

halverson group: word of mouth presentation

Data & Analytics