Ed Keller, CEO of the Keller Fay Group and author of The Influentials, is an expert on measuring word of mouth.

Based on his research, Ed made six points about America’s word of mouth conversations:

1. WOM spans categories and industries
2. WOM is mostly positive (63%)
3. WOM has impact – people are very likely to believe and pass along recommendations, and customers are more likely to buy or seek additional information because of word of mouth
4. Customer-based WOM leads to better outcomes – people on the “receiving” side of WOM are more impressed by advice given by a true customer of the brand
5. Marketing and media are a key part of WOM – nearly half of brand conversations refer to marketing or media (advertisements, etc.)
6. When it comes to conversation, not all consumers are created equal – 10% of the population (influencers) account for one-third of all WOM

Ed pointed out that there is a misunderstanding that influencers are all elite members of society. In fact, influencers are actually those who tend to both listen and talk a lot. They exist across countries and socioeconomic groups. Influencers are well-connected, well-informed individuals who possess:

• An active approach to life
• Enthusiasm for learning and keeping up
• Connections to many people and groups
• A clear set of priorities
• A strong belief in growth & change
• Impact and the ability to create change

I was happy to see Andy leverage the valuable community we assembled at our first-ever and sold-out Summit in May by recording five video interviews. It was truly an amazing group of individuals, charged with word of mouth marketing at many of the largest companies in the world, from Bank of America to Wal-Mart. It was humbling to be in the presence of so many smart industry leaders, sharing best practices with each other in our rapidly emerging field. Because of them (as well as the hard work by our team), we have set a very high bar for our Summit next year.

Andy recently published his interview of me. We discussed how user-generated content is changing the merchandising culture at companies, helping them become more customer-centric and successful as a result.

Click here to view the embedded video.

Read on to see more interviews by Andy.

Andy previously published an interview of Ze Frank, another one of our keynotes and one of the funniest but smartest online personalities you will ever meet. Ze's interview at our Summit by Kelly Mooney (a Summit keynote speaker, author of The Open Brand, and President of Resource Interactive) was a personal mental highlight for me, probing into some very deep issues. Andy covers topics like viral marketing with Ze. By the way, that gong behind Ze in the interview is a very important part of Bazaarvoice's culture, and has been since the beginning. You can thank my co-founder, Brant Barton, for that, and you can find multiple gongs in our Austin office and one in our London office (so far).

Click here to view the embedded video.

Andy also previously published an interview of Steve Leveen, the founder and CEO of Levenger. Steve is a very smart leader, and brought his son to our event. Steve gave me some great tips on raising our daughter, Rachel, and is a very kind person (as is his son, by the way).  In Andy's interview of Steve, they talk about the use of video reviews and Flickr as a natural medium for Levenger's sophisticated customers.

Click here to view the embedded video.

If you have not subscribed to Andy's blog yet, do it today. Incredibly useful tips are published on an almost daily basis. I found myself recently evangelizing on why to follow it to the founder of Hey Cupcake, a local joint in Austin. I connected with the founder, Wes Hurt, recently after reading about him in Tribeza because we may be related (it is a long story). You must try these cupcakes the next time you are in Austin – they are unreal. But I'm off topic – I was telling Wes to read Andy's book and subscribe to his blog because he will quickly learn how to build his business as a result. I also found myself telling Wes the story of how Krispy Kreme lost its "specialness", parroting Andy telling me the same story.

On Andy's blog, he will soon be publishing the remaining two interviews he did at our Summit: Bryan Eisenberg (highly respected industry consultant, co-founder of the Web Analytics Association, keynote speaker at our Summit and several other conferences, prominent author [ClickZ, Call To Action, and Waiting for Your Cat to Bark?], and Bazaarvoice Advisory Board member) and Seth Greenberg (former CEO of eHobbies.com – one of the online pioneers, former Shop.org Board peer, and leader at Intuit).

* Note: we are proud members of WOMMA and our own Sam Decker serves on the Board of Directors while WOMMA's President is my fellow Board Director at Bazaarvoice, Ed Keller (keynote speaker at our Summit, author of The Influentials, former CEO of Roper, and co-founder and CEO of The Keller Fay Group).

1. As the author of "The Influentials", former CEO of Roper, President of WOMMA, Board Director at Bazaarvoice, and CEO of your new business, why do you think the word of mouth movement is buzzing like never before?

Why now and not five years ago?

Word of mouth has always been an important factor in consumer decision making about products and services.  Over the course of many decades, consumer research has shown it to be among the most important factors to consumers.  However, over the past several years two major forces have aligned to make word of mouth considerably more important to consumers than it has ever been in the past, and considerably more important than other forms of consumer contact with brands.  The first force is declining trust – over the past 5 or 10 years consumer trust in official sources of information has plummeted, replaced instead with rising trust in friends, family, and "people like me."  The second force is the rise in technology, which enables consumers to see out peer-to-peer advice and recommendations more easily than ever before.  And the more they "try it," the more they "like it."  So the trend is accelerating. 

2. Do you think the reason trust in official sources is plummeting is the rise of the Web?  Or is some other factor, maybe sociological, at work here?

The decline in trust started with the corporate scandals of the 1990s (e.g., ENRON and others).  I think the transparency that the Web facilitates provides an additional means for people learn the facts and seek out the truth about matters more quickly and thoroughly than the could in the past.

So it is an enabler and an accelerator, in my view, but not the initial impetus.  History then shows that trends in trust (up or down) come in cycles, so once the trust decline starts declining it will generally take a while before it turns around the starts climbing again.  The trust must be re-earned.  And for some businesses, they are beginning to re-earn the trust through their word of mouth initiatives, showing they are sincerely interested in being enablers of open, honest, and beneficial consumer conversation.

3. Do you view what we do as an effective way for companies to improve trust?

The short answer is, yes.  And the reason is that when companies open up and let customers express themselves in their own voice — talking both about what they like and what they don't like in order to help other customers make smart and informed decisions — it sends a message that the company values openness, transparency, and (most importantly) that it respects the consumer.  All of those attributes help to build trust.

4. What are other ways that companies can earn trust via word of mouth initiatives?  What are some of the best examples you have seen?
There are many ways for companies to engage in word of mouth — some of which take place through online channels while others taking place offline.

Dell's IdeaStorm is proving to be a powerful way for Dell to listen to customers, and act on their suggestions.  Companies like Harley and eBay and others are creating customer communities that are very powerful way to cement customer loyalty and create advocacy.  Apple earns trust and customer respect through a wide variety of initiatives, including a very powerful experience that takes place in their retail stores which generates a considerable volume of positive word of mouth for Apple (in addition to a considerable sales volume). 

5. Let's talk about your new company.  What are the some of the exciting word of mouth insights that you have discovered for your current clients?

My company's research involves ongoing survey research with consumers about their word of mouth conversations regarding products, services, and brands.

We monitor this on a continuous basis to help companies understand the dynamics of consumer word of mouth about their category, their brands versus the competition, and among their target consumers.  Some important findings:

1. By a 7 to 1 margin, consumer word of mouth about brands is positive, rather than negative.  As Bazaarvoice has noted in its research about the J-curve, consumers are more interested in sharing advice and recommendations with consumers about "what works" and what they should be doing, rather than knocking down brands.  This debunks a major myth about word of mouth, and should encourage companies to be more comfortable with "letting go" and inviting consumers to talk about them and their services. 
2. Media and marketing play a big role in stimulating consumer word of mouth.  About half of all consumer word of mouth conversations about brands include a reference to some type of media or marketing.  By channel, TV is the number one medium, but the Internet is very close behind reinforcing the important role that the Internet plays as a channel to drive word of mouth.
3. Finally, our study proves just how ubiquitous word of mouth is. The typical American consumer engages in about 125 conversations each week about products and services, and talks about brands over 90 times per week.

That's a lot of word of mouth.  In fact, our projections are that there are 3.4 billion word of mouth conversations each day in America about products/services, and 2.3 billion brand-specific conversations.

There are just a few of the many insights we have learned.  But the real power of our research is to dig into the data at the category and brand level to help companies understand their strengths, and opportunities for improvement, in a word of mouth era.

6. What do you think about Wal-Mart's decision to launch customer ratings and reviews?

I think Wal-Mart's decision to offer ratings on reviews is a very significant development in the growth and development of word of mouth.

Anytime the industry leader in a category gets actively involved in something new and innovative it sends a very loud signal. And, in this case, the signal is to multiple parties: 

(a) to Wal-Mart's consumers: the message is that their voice is important and that Wal-Mart wishes to listen and let them be heard;
(b) to the many manufacturers whose products will be reviewed, letting them know that Wal-Mart is serious about opening up this new and important channel of conversation; and
(c) to other retailers who have been sitting on sideline, wondering if they should engage in word of mouth or not.  So this is both an important development for Wal-Mart and it's customer base, as well as for the word of mouth movement.

• "That American drivers aren't cutting back, and may not cut back drastically even if prices go higher, has huge implications for the world oil market. That's because U.S. motorists are the single biggest consumers of petroleum in the world. They use more than 9 million barrels of gasoline a day. That's roughly a third more than the consumption of all types of petroleum by every home, car, and factory in China, the nation whose energy consumption gets all the attention these days."

What I didn't expect is that a month later, Wal-Mart would lead the charge (see Fortune magazine's article).  From a word-of-mouth and customer demand perspective, this makes complete sense to me.  Witness the amazing rise of Whole Foods Market, which is actually headquartered here in Austin.  Their stock has skyrocketed up to 500% in the past five years.  Why should Wal-Mart (or anyone else) cede such amazing growth to Whole Foods?  Clearly the market is ready for competition, and Whole Foods has been virtually uncontested.

If you read the Fortune article, you will learn that Wal-Mart had Al Gore kick off this initiative.  What a great way to spark word-of-mouth inside the massive Wal-Mart employee base (they employ more people than the US Postal Service).  If those employees turn into evangelists, you can bet that will "infect" Wal-Mart customers as well.

Wal-Mart's scale is almost incomprehensibly massive.  Their scale almost put Vlasic out of business a few years ago.  As the corporation of retail corporations, they get their share of negative word-of-mouth, but most of it is among the intellectual elite.  The masses are actually very positive on Wal-Mart (because of their obvious low-price focus), and Ed Keller (one of our Board members and the former CEO of Roper) confirmed that Wal-Mart is one of the word-of-mouth marketing elite, right up there with Toyota, Honda, and the iPod.

But this is Wal-Mart's most brilliant word-of-mouth marketing move to date, especially among the intellectuals.  Because the intellectuals are the ones that will most appreciate An Inconvenient Truth.  And Wal-Mart has the scale to literally force many CPGs to "go green".  It is a big blow to Whole Foods, and it will be interesting to watch how they react.

Scale drives business change faster than any other factor.  How will you leverage your scale to "go green", spark positive word-of-mouth, explore new niches, and ultimately create higher margin opportunities?

By the way, I may appear to be a "greenie" but I am actually a die-hard technology optimist and believe that entrepreneurs will soon figure out real alternatives to oil given that it is a multi-trillion dollar business opportunity. 

First, a friend of mine that works at Yahoo! sent me a BusinessWeek article put out yesterday, Web 2.0 Has Corporate America Spinning. If you have read "The Cluetrain Manifesto", this article will lead you to believe that companies are finally hopping on the train. It continues to amaze me how visionary that book really was. If it wasn't for the tech market bubble bursting right after it came out, more people would cite it today.

As usual, BusinessWeek has an insightful and practical view on the subject, instead of the typical hype-laden fluff. Here are a few of my favorite excerpts:

• Companies are starting to take a page from MySpace, Facebook, and other social-networking services. The reason: As appealing as that social aspect is for teens and anyone else who wants to stay in closer touch with friends, it's even more useful in business. After all, businesses in one sense are social networks formed to make or sell something. [Comment: Why reporters don't mention "The Cluetrain Manifesto" when they write sentences like this boggles my mind.]
• But the payoff can be substantial, if hard to quantify. Genial Microsoft (MSFT) blogger Robert Scoble, for instance, is credited by many Redmond watchers with doing more to improve the company's image than millions of dollars in public relations. In no small part that's because he has shown a willingness to criticize his company at times. [Side note: I am speaking with Robert Scoble at the Supernova conferencein San Francisco in two weeks.]
• But the upside can be a brand to which people feel a stronger emotional tie. Says Forrester Research analyst Chris Charron: "In the end, the brand is owned not just by the people who create it, but by the people who use it."
• All that's going to require more than slick technology. Executives, long used to ruling from the top of the corporate hierarchy, will have to learn a new skill: humility. "Companies that are extremely hierarchical have trouble adapting," says Tim O'Reilly, CEO of tech book publisher O'Reilly Media, which runs the annual Web 2.0 Conference "They'll be outperformed by companies that don't work that way." Ultimately, taking full advantage of Web 2.0 may require — get ready — Management 2.0.

Second, Netflix was profiled in BusinessWeek's June 5th issue for their "top 100 hot growth companies" feature story.  This reminded me of my blog post back in February. The subtitle of the BusinessWeek article is "the mail-order movie house that clobbered Blockbuster." If that doesn't sum it up in a few words, I'm not sure what would. Read my blog post to get a different perspective on why this is happening and what it has to do with word of mouth.

Third, I was happy to see Ed Keller's new company, Keller Fay Group, prominently mentioned in the same June 5th issue of BusinessWeek on page 12. Keller Fay is producing some really groundbreaking research.  Sam Decker blogged about some of it earlier this month, highlighting research that 62% of word of mouth is positive. Ed is answering questions that have been perplexing us for some time.

Fourth, congratulations to Ed Keller (and Bazaarvoice) on him joining our Board of Directors (as our first independent member) as well as WOMMA's Board of Directors (in their first elected Board).  Ed has the perfect profile for our Board as well as WOMMA's. He has fantastic operational experience (as the former CEO of Roper) and deep industry experience (27+ years in marketing research, including co-authoring "The Influentials", a truly amazing book that helped launch the recent word-of-mouth movement). I feel flattered that Ed joined our Board and look forward to working with him for years to come.

And fifth, congratulations to Chris Pacitti of Austin Ventures. Throughout my entrepreneurial career, I have had the fortune of working with some truly great venture capitalists. It is an amazing achievement for two of the companies that Chris serves on the board of, Bazaarvoice and Pluck, to be the only Texas-based companies in North America to be selected for Red Herring's Top 100 list.  We are very fortunate to be working with him. With Chris and Ed on our Board, we have a very powerful combination of resources.

The study was done using TalkTrack™, the first continuous monitoring system of all marketing-relevant conversations, providing nationally representative measures on word of mouth for every major consumer category and thousands of individual brands.  

Here are some key findings:

• The average American discusses specific brands in ordinary discussion 56 times per week. 
• 41% of conversations about brands involve a reference to advertising or something seen or heard in the media.
• Contrary to conventional opinion, nearly two-thirds (62%) of brand-related talk feature products in a positive light, while less than 1 in 10 conversations features products negatively.

Last week I posted on the Ratings “J Curve” where we are seeing more positive reviews than negative (by far) across all Bazaarvoice clients.The Keller Fay study reinforces our theory – people are more likely to spread positive word of mouth vs. negative

This more recent study conflicts with conventional wisdom (from a 1970’s study) that more people spread negative word of mouth than positive. At least as it relates to products – it may be accurate for more ‘emotional’ company experiences.

In my opinion, this finding (and perhaps trend) suggests that customers are SEEKING OUT products based on positive word of mouth. There are far too many products — mind-blowing choices for any category — for customers to choose from. This is only the beginning as we discover new ways for customers to find the best products to buy by learning from each other. And for me, it's exciting, because the best products will win in the market. The retailers who will win are ones who understand that the way to be the best 'editor' of products in their category is to help their customers do it for them!