2. Session Agenda
Influence basics
– What is influence? Who are the influencers?
– What does influence mean to your business
Influence mechanics
– Do influencers matter? How? How much?
– How to find influencers?
Advance topics on influence
– How to work with influencers without working with them?
‐2‐ | 16:14 @mich8elwu
3. What is influence?
Webster definitions:
– The act or power of producing an effect without apparent
exertion of force or direct exercise of command.
– The power or capacity of causing an effect in indirect or
intangible ways : sway
‐3‐ | 16:14 @mich8elwu
4. What is influence?
Webster definitions:
– The act or power of producing an effect without apparent
exertion of force or direct exercise of command.
– The power or capacity of causing an effect in indirect or
intangible ways : sway
Must have some effects
– Effect on some target audience (target)
– Effects don’t always have to have actions
‐4‐ | 16:14 @mich8elwu
5. What is influence?
Webster definitions:
– The act or power of producing an effect without apparent
exertion of force or direct exercise of command.
– The power or capacity of causing an effect in indirect or
intangible ways : sway
It matters how you produce the effects
– No carrot: no money
– No stick: no force/coercion
– No annoyance: no spam/frustration
– No trick: no deception/hidden agenda
‐5‐ | 16:14 @mich8elwu
6. What is influence?
Webster definitions:
– The act or power of producing an effect without apparent
exertion of force or direct exercise of command.
– The power or capacity of causing an effect in indirect or
intangible ways : sway
Definition for businesses:
– The ability to cause a change in thought (sentiment,
opinion, etc.) OR behavior (purchase, referral, etc.)
through non‐coercive and transparent means where the
targets want the changes even with no monetary
compensation
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7. Who are the influencers?
Kevin Smith (2010): Dave Carroll (2009): Jeff Jarvis (2005):
Too fat to fly Southwest United Breaks Guitar Dell Lies, Dell Sucks
Channel=Twitter Channel=YouTube Channel=Blog
They were mistreated by some companies
– Their influence on social media cause a major PR crisis
– Bad PR + significant financial damage (in some cases)
‐7‐ | 16:14 @mich8elwu
8. Who are the influencers?
But influencers ≠ celebrities
– Because influence ≠ popularity
Other confounding facts about influencers:
– Everyone can influence someone, so anyone can be an
influencer.
– Influencers do not fall into any standard demographics
and/or technographic segmentations.
– There are no universal influencers.
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9. Who are the influencers?
Influencers =
– Superusers and product experts
– Advocates who will speak on your behalf
– Evangelist of your brand
Influencers for marketers =
– People with significantly greater ability to influence
—cause a change in thought OR behavior through non‐
coercive and transparent means where the targets want
the changes even with no monetary compensation
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10. What does this mean to your business?
engage/
empower
mass public
consumers
awareness
purchase
interest
desire
brand X
potential (+) influence = promoters potential (−) influence = detractors
competitors’
your superusers your brand your unawared competitors’ brand advocates
(product experts) advocates customers consumers customers (your brand
(evangelist) detractors)
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11. What does this mean to your business?
Influencers help you:
– Drive effective WOM marketing/sales
• Move consumers through your purchase funnel increase sales
– Acquire customers from your competitors
– Cut cost
• Influence other customers to self‐help + help each other
‐ 11 ‐ | 16:14 @mich8elwu
12. Session Agenda
Influence basics
– What is influence? Who are the influencers?
– What does influence mean to your business
Influence mechanics
– Do influencers matter? How? How much?
– How to find influencers?
Advance topics on influence
– How to work with influencers without working with them?
‐ 12 ‐ | 16:14 @mich8elwu
13. Do influencers matter?
vs.
Malcolm Gladwell Duncan Watts
(best‐selling author) (sociologist)
Influencers matter Influencers don’t matter
– If they say/do something – Seeding a message from
thousands and millions any random person
will hear and follow eventually reaches the
same number of people
as seeding from an
influencer
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14. Do influencers matter?
The effect of influencers is not the number of target they can
reach. It is the speed at which they can reach those targets.
Number of targets reached is a very bad way to measure
influence. What is a better way?
Quantifying the value of WOM. Join work with
– Prof. Barak Libai MIT Sloan School of Management
Recanati B‐School, Tel Aviv Univ
– Prof. Eitan Muller NYU Stern School of Business
Recanati B‐School, Tel Aviv Univ
– Prof. Renana Peres The Wharton School, U Penn
Hebrew University of Jerusalem
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15. How does WOM turn into value?
W O M
?
Agent‐based CLV model based on real network structure
from 12 social graphs (6 from Lithium)
CLV model: Takes into account of
– Network value of referral (V. Kumar)
– Discount rate of money, b/c lifetime of customers can be very
long.
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16. How does WOM turn into value?
W O M
?
Agent‐based CLV model based on real network structure
from 12 social graphs (6 from Lithium)
Simulation parameters for investigating the effect of:
– Influencers: Influencer seeding vs. random seeding
– Brand equity: Brand monopoly vs. competing brand
– Seeding program size: 0.5% to 5%
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17. Summary of Lithium‐only data
Seeding Program
Competing
Random 10.3%
brands
Gain via acceleration
Influencer 17.4%
Gain via acquisition
Brand
Random 86.8% monopoly
Influencer 113%
0 20 40 80 100 120
Result 1: Two mechanisms combine to create
WOM values
Acquisition of customers
Acceleration of adoption
‐ 17 ‐ | 16:14 @mich8elwu
18. Summary of Lithium‐only data
Seeding Program
Competing
Random 10.3%
brands
Gain via acceleration
Influencer 17.4%
Gain via acquisition
Brand
Random 86.8% monopoly
Influencer 113%
0 20 40 80 100 120
Result 2: Influencer seeding increases gain
49.4%
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19. Summary of Lithium‐only data
Seeding Program
Competing
Random 10.3%
brands
Gain via acceleration
Influencer 17.4%
Gain via acquisition
Brand
Random 86.8% monopoly
Influencer 113%
0 20 40 80 100 120
Result 3: First mover advantage is huge
7.5x
‐ 19 ‐ | 16:14 @mich8elwu
20. What does this mean to your business?
engage/
empower
mass public
consumers
awareness
purchase
interest
desire
brand X
potential (+) influence = promoters potential (−) influence = detractors
competitors’
your superusers your brand your unawared competitors’ brand advocates
(product experts) advocates customers consumers customers (your brand
(evangelist) detractors)
‐ 20 ‐ | 16:14 @mich8elwu
21. Finding influencers involves 2 parties
Influencer
Domain Credibility: The influencer's expertise in a specific domain
of knowledge.
High Bandwidth: The influencer's ability to transmit his expert
knowledge through a social media channel.
Content Relevance: How closely the target's information needs
coincide with the influencer's expertise.
Timing: The ability of the influencer to deliver his expert knowledge to
the target at the time when the target needed it.
Channel Alignment: The amount of channel overlap between the
target and the influencer.
Target Confidence: How much the target trusts the influencer with
respect to his information needs
Target
‐ 21 ‐ | 16:14 @mich8elwu
25. Session Agenda
Influence basics
– What is influence? Who are the influencers?
– What does influence mean to your business
Influence mechanics
– Do influencers matter? How? How much?
– How to find influencers?
Advance topics on influence
– How to work with influencers without working with them?
‐ 25 ‐ | 16:14 @mich8elwu
26. Now you have influencers, so what?
You shouldn’t:
– Pay them, or blatantly promote them
• People will find out Not authentic They will lose credibility
– Work them like your employees
• They will hate you and turn against you
How to influence the influencers?
– Remember: No carrot, no stick, no annoyance, no tricks!
How do we work with them without actually working
with them?
– Do you just leave them be and let WOM propagate?
‐ 26 ‐ | 16:14 @mich8elwu
28. Uncoordinated WOM has low efficacy
WOM do not propagate vary far. What’s wrong?
– Passionate influencers are too far apart.
– WOM decays before reaching another influencer who will
pass it on.
– Over time, even the passionate influencers lose their
enthusiasm.
The problem is distance and time. How can we fix it?
– Shorten the distance between the passionate influencers.
• In‐Real‐Life (IRL) meet‐up
• Community
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30. Community WOM is effective
Community can overcome the decaying effect of
distance and time.
– Key: High concentration of passionate consumers
– Many of them + close proximity to each other
Result:
– Ongoing conversation heightens enthusiasm
– Persistent content prolonged message lifetime
– Ideation and innovation increase relevance and adoption
‐ 30 ‐ | 16:14 @mich8elwu
33. A repeatable influencer strategy
Co‐create value with them using a community
Community
– Provide audience for the influencers
– Amplify their influence
– Cultivates influencers: Allow ordinary customers to gain
status/recognition build their influence
Community members + sponsors
– Benefit from influencers’ domain expertise
– Effective WOM + cut support cost
‐ 33 ‐ | 16:14 @mich8elwu
