Economy

The right words, the right mouths

SmartCompany /

A new Australian company is marrying the latest technology with the oldest form of marketing, word-of-mouth, and creating a buzz among consumers right across the generational divide. By SIMON LLOYD.

Harnessing the power of word-of-mouth with an online portal and using ‘trend spreaders’, Yooster is spreading the word about products – sometimes before they launch.

By Simon Lloyd

Piers Hogarth-Scott

Piers Hogarth-Scott has known all about the power of word-of-mouth marketing since his earliest ventures. In the late 1980s, he organised acid house dance parties in London, underground events which by their nature had to rely exclusively on social networking and word-of-mouth marketing to be viable.

Almost two decades later, and with a successful career in advertising under his belt, Hogarth-Scott still harks back to those parties as laying the philosophical foundations for his new business, Yooster.

Yooster is the first word-of-mouth opinion panel of its type in the world, an online portal that uses what Hogarth-Scott calls ‘trend-spreaders’ to give feedback to companies about new products, services and brand extensions. In doing so, Yooster panel members are rewarded by being the first to try out and own new products, in turn spreading the word about them to their friends, family and colleagues.

The business went live on the internet in October last year, and since then, the response has been ‘truly spectacular’, according to Hogarth-Scott, Yooster’s co-founder and chief executive.

“We have signed up almost 50,000 opinion leaders to the Yooster ‘community’,” he says. He adds that this is not some random process. People wanting to sign up as Yooster members have to undergo a test online, a kind of psychographic profiling, to ensure they fit certain criteria.

“Basically they have to be more connected in the sense that in a group of 10 people, you’ll find that one influences the others on what to buy, where to buy and so on,” Hogarth-Scott says.

The demographic of the Yooster community is skewed slightly towards female members – 63% are women (“they tend to be more socially connected than men and more open to sharing their opinions,” says Hogarth-Scott), but the age appeal is universal. Yooster’s youngest member is 14, the oldest 87.

One of the biggest challenges for any start-up, however innovative and entrepreneurial, is persuading your potential new customers to put their faith in your venture. It’s an enormous risk, of course, but in Yooster’s case, Hogarth-Scott realised the concept had struck a nerve when one of its first clients was consumer goods behemoth Unilever.

Earlier this year, Unilever wanted to launch a hair-care extension to its well-established and popular Dove skincare range. The company had two possible promotional gift items to use in retail outlets. Rather than follow the usual route of trialling both on thousands of supermarket shelves – an expensive hit-or-miss tactic – a sample of Yooster panelists matching Unilever’s target demographic received both gifts and were asked to vote on which they preferred. In turn, these Yooster panelists spread the word about the new Dove haircare range even before it appeared in stores.

Other businesses to have used Yooster to date include ninemsn, the Starlight Foundation and Hoyts.

“This is about fostering advocacy with people, and driving word-of-mouth through participation. We’re marketing with people, rather than at them,” Hogarth-Scott says. “These days traditional mass marketing is so uninspiring and doesn’t reach people. With this model we’re asking consumers to call the shots on certain aspects of communication. We’re asking them to choose what they want in their brands. And the more manufacturers, inventors, entertainers and marketers know about what people really want, the less rubbish is produced and the better the end result for everyone.

“Mass marketing works on the principle that you market to many to reach the few. We turn that on its head, marketing to the connected few, influencers who reach the many by word-of-mouth,” he says.

The Yooster concept was three years in the genesis stage. Hogarth-Scott’s co-founders all have similar backgrounds in digital and traditional advertising in Europe, and have known each other for several years. Justin Kirby, Great Macfarlane and Mathias Bauer will be responsible for starting UK and German versions of Yooster later this year. In Australia, the company employs 10 staff full-time.

Hogarth-Scott is cagey about Yooster’s revenues, saying that he won’t discuss earnings when the company has yet to complete a year of trading. However, he’s happy to let on that he and his co-founders have invested well over $1 million of their own funds to bring Yooster into being.

Is Hogarth-Scott concerned that another entrant, a big research organisation with huge financial resources for example, might decide to challenge the Yooster model with its own version?

“The more competitors we have the more credibility it adds to our emerging industry,” he answers. “Although I would add we do have proprietary intellectual property, and global patents-pending on our word-of-mouth methodology, process and technology – plus my partners in Yooster are some of the most experienced word-of-mouth practitioners in the world.”

As for Hogarth-Scott’s longer-term ambitions for Yooster, he gives a clue when he reveals his one great regret in business.

“Being offered millions for a business [he doesn’t specify which one] I was involved in during the dotcom boom, and refusing it because at the time I thought we were undervalued. Then the bubble burst. I will never make that mistake again.”

Advertisement
SmartCompany

SmartCompany is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.

We Recommend

FROM AROUND THE WEB