Hugh and friends discuss influence

Hugh McLeod does a regular podcast with Rabbi Pinny Gniwisch, Johnnie Moore and Mark Earls. This week they talked about influence.

Well, they did for about 10 minutes – for the next 30 it was mainly about success in marketing and creativity. Interesting, nevertheless.

Listening to these intelligent chaps solidified my view that influence is grossly being misunderstood and/or misrepresented. As Johnnie Moore said, there are two views. One is to think of “cool people” that tell the rest of us what to do. Find those influencers and success will follow. The other view is that life is more complex (duh) and success is often just down to luck, or random acts of traction (as Hugh puts it). (Echoes of The Wisdom of Crowds and Fooled by Randomness here.)

This is being played out on the blogs as Malcolm Gladwell versus Duncan Watts.

I think neither of these views is right – this polarisation masks the real complexity of influence, which is that it’s damned hard to pin down in what it is and how it works.

I can’t criticise these guys for saying it how they see it. In fact, I think the biggest culprits are consumer-facing WOM agencies that claim to be able to identify influential consumers or, worse, to position celebrities as influencers.

The podcast does actually acknowledge that influencers do exist, though these may be the people that “show up.” In other words, anyone can be an influencer if they are committed and diligent enough. I think that this is true in large parts.

A couple of their comments jarred with me:

“The Influential model is most often touted by people who would like to be seen as Influentials, or at least, friends of Influentials.” Ouch. In fact, I “tout” Influencer50′s approach because I see it working with clients. Some influential people don’t even know that they influence the market, and are surprised on being told such.

The idea that once you find influencers it’s a simple task of pulling the levers and success follows. My experience is that although identifying accurately is complex, it’s actually the easy part in the process. Engaging with influencers is much harder.

It’s also cemented my view that influence in the B2B world is different from B2C, in that B2B lacks a strong sense of peer-to-peer communication. Business people don’t talk to others outside their organisation because of the lack of opportunity, or due to competitive sensitivities. Influencers act as proxies here, acting as go-betweens for firms. This role is critical, and underpins the entire consulting and industry analysis business models.

In B2C, sure, there are influential consumers. But I’ll bet that no agency can identify which fellow consumers are influencing me on my (ongoing) new PC decision. But they could identify which web sites, retailers and magazines I might consult. Fixating on consumers as B2C influencers is missing the primary sources of influence: the supply chain and value-adding influencers.

It’s clear to me that most firms looking for influencers amongst consumers are looking in the wrong place.

Duncan Watts – influence killer?

There’s a bit of a stir going on regarding Duncan J Watts and his theories on how ideas spread. In particular he’s becoming known as the influencer killer because he says that influencers have no catalyst effect on the spread of ideas. Indeed, they have no special role in trends at all.

I’ve been following his research for about a year, since this was published. But the recent article in Fast Company magazine brings the issue to a head (and I think Clive Thompson has done a great job in raising the relevant issues).

As I see it, Prof Watts highlights some of the basic misunderstandings of influence. There is, frankly, a lot of nonsense and assumption talked about influence. Much of it stems from the Keller & Berry book The Influentials, which states that 10% of people tell the rest of us how to vote, where to eat and what to buy. I loved this book. I’ve read it three times. Nowhere does it say how Keller & Berry came up with the 10% number – why not 9% or 11%, or 1%. It is based on assertion, and the data in the book simply reasserts the 10% assumption. The Influentials is really useful in understanding how people gain influence in society. But it’s not useful in understanding who or where these people might be, or how to get them to influence markets on your behalf.

Another key misunderstanding on influence is that the people with influence are marked out through the roles they play, or the jobs they hold. Or worse, through the degree of celebrity status they hold. The consensus of research shows that we are more influenced by people with expertise than people with celebrity. And we are more likely to be influenced by people we know than by any other group.

Equally influencers don’t influence evenly through a decision process, as I wrote in this post and the book. And influencers aren’t influential in every category – influence is context-sensitive. So an influencer in buying a house may not have influence in buying a digital camera. This should be intuitive, but marketers sometimes get carried away by the promise of influencers that hold the keys to increased sales.

However, it’s clear that influence occurs in markets, and it’s attractive (I say essential) that firms understand how and what this influence is, and who are the conduits of it. So the final misunderstanding of influence is the assumption that it exists only within the consumers themselves. Clearly this is nonsense when you think about it (except marketers don’t tend to think about it). As consumers we are influenced by a host of people who are not (in the roles they play) consumers.

We’re clearly influenced by a range of people in different roles, some local, some national. What we do as decision-makers is to process the variety of influencers and then make a judgement. Not all influencers are successful in influencing every decision.

Consider the process of buying a house, something that most of us will be familiar with. You’ll be influenced by the house vendor and a real estate agent. Both have a vested interest in the transaction, so you do more checks. You’ll be influenced by any people that you know of within the area. You’ll be able to check out whether a ‘neighbourhood watch’ system is in place. You will consult published crime figures, possibly even calling the local police station for advice. You’ll refer to school inspection reports and league tables. Local councils will be quizzed for pending planning applications. The local head teacher may be critically important if the main attraction for the property is its proximity to good schools. Builders and other tradesmen may be asked for quotations for structural work you want to do.

I see this even more pronounced in B2B markets, where we can identify the individual people that influence a specific market segment. These are people that are not particularly obvious but undeniably carry influence in their area of expertise. B2B influence works in a different way to B2C, primary because B2B markets don’t have the word of mouth communication that B2C markets do.

But even in B2C markets we find that influencers in the supply chain and its ecosystem carry the majority of influence, with consumers having limited impact on the market as a whole.

I don’t believe that Prof Watts signals the death of influencers. But perhaps he has hastened the death of much of the nonsense that surrounds the notion of influence.

The value of referrals & references

Serendipity strikes again. I’m arranging a reference call between a prospect and a client, and then HBR alerts me to this article (subscription required) on the value of word of mouth (WOM) referrals. And then Brand Republic points me to a Robin Grant post on the latest Nielsen* research that shows, yet again, that people trust people more than anything else.

The HBR article is interesting not so much for the mathematics of referral value (yawn) but because it identifies a gap between those who say they’ll make a referral, and those that actually do so. Strangely, the higher value customers tend not to carry out the promise, whereas lower value customers are more inclined. Thus there’s a difference between a customers lifetime value and their referral value (which, the article states, could be significantly higher).

In the world of Influencer Marketing we often say that reference customers are the ultimate influencers. In the absence of direct experience of a product or supplier, a prospect will defer to a peer as a proxy for personal experience.

The Nielsen research and HBR article talk about referrals in a B2C context, whereas Influencer50’s focus is predominantly B2B, which typically involves references. The difference between a referral and a reference is timing, occurring at the beginning or the end of the decision process, respectively. But otherwise they are the same, a recommendation, with the same high impact.

In my experience, references in B2B are just as difficult to realise as referrals in B2C. Why is this?

• They’re generic: a reference is best if it maps closely to our own needs. That’s why banks like to get references from other banks. But most reference customers are used indiscriminately – case studies are notoriously bad for this approach.
• They get tired easily: the goodwill established in a reference client erodes quickly. You have to use them soon, and appropriately, or lose them.
• You don’t always have references: if you’re entering a new market, or have a new product to launch, you’re starting from scratch.

Understanding the whole ecosystem of influencers, not just customer references, is important for these reasons. You can use non-customer influencers to backfill your reference programs. This also means you keep your customer references fresh and focused for those situations where you really need them.

 

*The full Nielsen report is here.