Ted Wright, the CEO of Fizz, tackles the biggest deals of the summer—Amazon Inc. (AMZN) buying Whole Foods Market (WFM) and Walmart Inc.'s (WMT) purchase of men's wear e-tailer Bonobos—and also some nagging questions in the retail sector, such as how Macy's (M) stacks up against Nordstrom (JWN) , and why some iconic brands are dying.
Here, Wright, one of the foremost proponents of word-of-mouth marketing and author of "Fizz: Harness the Power of World of Mouth Marketing to Drive Brand Growth," discusses the "secret sauce" needed to succeed. What moves products, he contends, are influencers, conversations and story.
This interview has been edited for length and content.
Question. What is an influencer?
A. An influencer likes to try new things because they're new, likes to share information with friends and is intrinsically motivated. He or she shares a story that is authentic, interesting and relevant. About 10% of consumers are influencers or have an influencer personality and they are sharing it with the other 90%.
Q. That leads to a second question. Are people really talking these days, having conversations? Because a lot of the people I see and deal with seem to be glued to their devices.
A. They are having digital conversations, but they are having one-on-one conversations, too. In fact, 7 out of 10 word-of-mouth conversations happen face to face, another 20% take place over phone and only 10% of all word of mouth happens digitally.
Q. So how do these influencers and conversations impact the retail landscape?
A. We consumers want stories that are authentic, interesting and relevant, and we aren't getting them from broadcast, politicians or organizations. We have been personally lied to at least once by a corporation, or a politician or an organization. This experience is juxtaposed against a recommendation from an influencer. After we figure out what he or she said wasn't a lie, we listen to their stories and have conversations. What that means for sales is that the translation rate from a word of mouth conversation from an influencer to their friends is on average 95% effective as long as the product they are talking about is under $1,000.
Q. Can you talk about the value of "story" in marketing?
A. Every company needs to have a compelling story for the customer to latch onto, which determines whether he or she spends money there.