Not everyone likes to use the word influencer when it comes to marketing, but no one can deny that influencers are a key part of most company’s marketing plans.
In today’s episode, our guest Melinda Byerley, shares her experience on building a successful influencer program for DVD Netflix.
Melinda is a serial entrepreneur and the founding partner of Timeshare CMO. She’s held marketing and e-commerce leadership roles at companies such as PlantSense (sold to Parrot), eBay, PayPal, and Checkpoint Software. Join us as we discuss how to identify brand influencers, keep them engaged, and help grow your business.
listen to this episode
- How the FYRE Festival actually proved the power of influencer marketing
- Delivering an influencer program that fits inside the FTC’s guidelines
- Why you need to identify which customers you are trying to influence first
- Quantitative research was important but qualitative research is what led Melinda and team to identify influencers and their target market
- The best tactics to collect honest and sincere customer feedback
- Why forming an online community was important for DVD Netflix’s influencer program
- B2B Companies and Influencers
- Melinda’s advice for marketers and her favorite marketing resources
- Timeshare CEO
- Melinda on Twitter
- Staying Alive in Tech Podcast
- Venture Beat
- Growth Marketing Conference
- DVD Netflix
- FYRE Festival Hulu Documentary
- FYRE Festival Netflix Documentary
- Cialdini’s Principle of Persuasion
- FTC’s Endorsement Guidelines
- South x Southwest
- Social Media Strategy Summit
- Avinash Kaushik
- Seth Godin Podcast
- In Search of Excellence – Tom Peters
- The Excellence Dividend – Tom Peters
- The Dip – Seth Godin
- The Icarus Deception – Seth Godin
- Ogilvy On Advertising – David Ogilvy
Louis: Bonjour, bonjour and welcome to another episode of everyonehatesmarketers.com, the no fluff actionable marketing podcast for marketers, marketing consultants, founders, and tech people. Who are just sick of shady, aggressive, marketing.
I’m your host Louie Grenier. In today’s episode, you’ll learn how to build influencer programs that actually work. My guest today is a serial entrepreneur and the founding partner of Timeshare CMO. She’s held marketing and e-commerce leadership roles at companies such as Plant Sense that was sold to Parrot, eBay, PayPal, and Check Point software.
She has a few superpowers, including marketing & analytics, campaign attribution, budget allocation, storytelling, and content marketing. She contributes to Venture Beat, the Growth Marketing Conference, and is a guest lecturer at Cornell University.
She described herself as a rather direct and provocative character, especially on Twitter. So we’ll give a few more details on this in the next few minutes. But, let me welcome you Melinda Byerley on the show, where welcome aboard.
Melinda: Thanks, Louis. Glad to be here.
Louis: So let’s talk about influencer programs, but actually no, let’s not talk about that just right now because I think there’s a fun story to tell about how we came to talk to each other and why you’re on this podcast right now. So I’m just going to stop, and maybe you can complete the story.
So I think there’s a listener of the podcast a few weeks ago who replied to a thread where you’re included, mentioning my podcast and I think you saw the title and then all hell broke loose in the sense, right? So tell me more about what happened when you saw the title, what happened after that?
Melinda: So it wasn’t just you, believe it or not. So I very rarely start ranting on Twitter when it’s just one thing I see. I’m really good at picking up on patterns, and I’d actually seen a LinkedIn post that day where a person who was a marketing consultant said that somebody called him a marketing consultant and that made him embarrassed and ashamed.
And I thought, oh, that’s really strange. Like if you don’t like what you’re doing, maybe you shouldn’t be doing it. Poor Louis, I came across your podcast. That is how I discovered your podcast.
I think since we’ve both come to understand that we have more that unites us than divides us. But what I was reacting to was something that we see our clients going through all of the time. They feel inside of their organizations like people hate them.
And particularly in tech, there has been sort of a backlash or a response even to good people, right? The baby may be throwing out with the bathwater. So marketers often feel even good ones, under siege, and so I feel fiercely protective of them. That’s why I got excited on Twitter.
Louis: Yeah, and I completely agree with you, right? And this is actually why the podcast even exists because I feel the same and a few people misunderstand marketing, and as you said, you said it like very well on your Twitter rant saying that a lot of companies would be for ego or competition gold rush, but success only comes when you build what people either really want or desperately needs.
You also said something that I completely agree with, which is, “I can’t tell you how many times founders say that they want strategic marketing but are unwilling to do the hard work of defining mission, a customer segment, and messaging structure. Without these artifacts, you’re wasting your time and money.” Amen to that as well. Completely agree 100%
I guess the sucker seek title of the podcast is really to play on this emotion, and you know, to play on the emotions that people already have. So a lot of people feel that they are being hated, and to show that there is a real way to do marketing that is not hateful, that is based on focusing on people and that drive results.
Melinda: And if we’re pulling in the people who actually think this is a hating podcast and then they start to like marketers, that’s a win.
Louis: Exactly. I don’t know if I had that many of them. I do know for sure that a lot of people are not, marketers are listening to this because they know that they need marketing in their life, but they don’t want to use the shitty marketing they see.
But that’s the trick with marketing that’s also something that I think is interesting is I think good marketing doesn’t seem like marketing to people outside of marketing the marketing world. Right?
It’s like; it’s so good that you just talk about it with your friend, it’s so good that you buy the product, it’s so good that you just feel like these brand understand you and you wouldn’t call it, oh that’s brilliant marketing. So however bad marketing that gets noticed.
Melinda: That’s right. It’s often when it’s done well, it’s taken for granted, and the credit is given to product and engineering, and when it’s done poorly, it’s blamed on marketing.
Louis: Exactly. So let’s go to the topic we picked together, right? Which is quite specific and actionable. Which is how to build influencer programs.
I talked about this topic a few months ago, and I remember receiving an email after that saying, you know, I didn’t think you would ever talk about influencer marketing in this podcast because it’s a lot of bullshit, to which I answered that good influencer marketing is just marketing 101, and so even though I absolutely hate the term, I have to admit, it’s something that always existed and that will always exist, and you need to harness the power of people who are trusted by others to sell your stuff.
So you, I think have a similar view on it. So on our email thread, you were saying that there’s a lot of crap around the inferencer programs, influencer marketing. Can you tell me more about this?
Melinda: Well, certainly most famously, you know, the influencer marketing has been in the news in the negative way on the FYRE Festival. I mean, that’s going to be exhibit A for anyone who has the position that influencer marketing is crap.
I actually believe that the FYRE Festival program proved the power of influence or marketing. It actually proved the adage that nothing spreads the word faster about a bad product than good marketing.
Louis: For people who have never heard about the FYRE Festival or what happened, can you describe briefly what happened?
Melinda: Well, I’ll do my best, but essentially there was, I’ll call him, the person who decided to do it, and I’m sorry his specific name escapes me, but the gentleman who started the FYRE festival, who’s now in prison for this essentially perpetrated a fraud. He got several high profile celebrities to endorse his music festival under sort of false sort of pretenses.
Some of them also did not adhere to FTC guidelines, which we can talk more about, and essentially people showed up at this festival in The Bahamas. Since I know you curse, it was a shit show. I mean, you can look at the pictures on Instagram. They were promised first-class accommodations; they got cheese sandwiches and Styrofoam. They were promised fancy lodging they were staying in tents. They barely had enough water. It was a disaster.
People were wringing their hands over influencer marketing. But I’d argue that the problem wasn’t influencer marketing, the problem was the fraud. The problem was that the product, the festival itself was not a product.
Louis: Absolutely, and if the festival delivered on its promise, if the product that they were selling were actually good, it would have been massively successful influencer marketing campaign that would have led to a massively successful festival, that probably would have gone for years and years.
If people want to know more about this actual issue with the fraud that and the entire story, you can check out on Netflix. There’s an entire documentary on it.
Melinda: And Hulu, there’s two of them. Yeah.
Louis: It’s fascinating. It’s really fascinating in terms of psychology and how they completely forget about the people that would actually attend the festival and just focused so much on the fame, on the all those emotions that you shouldn’t really think about when you use the marketing the right way.
So that’s actually a perfect example to talk about the fact that it’s not necessarily the influencer marketing that is bad it’s when it’s not done properly that you’re starting to see some issues.
So maybe you, before diving into how to do it properly, what in this example the influencer marketing campaign was done very well, right? They reach out to some models and all of that.
Melinda: Yes, it was brilliant. I mean they sold what? 4,000, 5,000 tickets they sold out at 1,000 bucks a piece in like four days.
Louis: Yeah. I think it’s even more expensive than that.
Louis: They made crazy ton of money, and they manage to get artists to be booked and all of that without a venue and yeah. Fantastic. On the marketing front, they really managed well but of product was shit. But on the contrary, then, can you pinpoint some examples or like maybe some components of bad influence of marketing like per se. Like what is what you shouldn’t do when you do influence in marketing in the first place?
Melinda: Well, the most are, the most important thing is actually to be compliant with the law. After the FRYE festival, and it’s hard to tell in this current administration in the United States how the law might be enforced, but certainly that the trend was towards the FTC cracking down, and in fact, some influencers did have problems.
If someone is an influencer, they actually need to know the law, and they actually have to be compliant with the law, and there are ways to do it. The software platforms right now are not doing a great job of enabling brands and influencers to be compliant. We think we have found a way to handle that, but that’s the most important thing. You need to be using Hashtag Promo, hashtag ad, or somehow disclose.
So think of it this way. If years ago, if you had a television commercial and you had a brand spokesman, if you’ve noticed in the television, it’ll say paid spokesman, even in late night TV when they’re selling, you know, whatever it is they’re selling, it’ll say paid spokesperson. There’s always a disclosure that the person was paid for the testimonial and it’s not okay, to not disclose that, because that leads to a trust problem and we can prove that the results were just as great.
You can get great results because people know that this happens. People aren’t stupid. I mean people understand that there are paid celebrities that doesn’t stop them from buying a great product. So there’s no reason to hide it or, or to fake it. I think there’s only downside.
Louis: Can you just define briefly with the FTC is for people who may not be aware of it in the inside the United States or even outside?
Melinda: Oh yeah. The Federal Trade Commission. It’s a government agency. It is designed to sort of enforce a number of different things in the way that interstate commerce is done in the United States. But they also cover advertising regulation, Advertising Law, and we do have laws in the United States about truth in advertising and disclosure of payment for endorsement.
Louis: I suppose the FTC is quite obviously leading the way when it comes to legislation in this domain, and I suppose the European Union and other countries might look up to them when it comes to those regulations. So even though what we’re going to talk about now is going to be, how should I say that? Strictly linked to the US when it comes to the law?
I think what you’re going to say, what are we going to say in the next few minutes, apply to everyone who are looking to do those types of campaigns to make sure that they are in line with the law and they are treating their people, the people they’re reaching out fairly as well, right?
Melinda: I would suggest it, and I can’t speak to the laws in other countries, but in the same way that I would advise my clients to be compliant with GDPR because it’s the right thing to do, even if they only sell to Americans, it’s to be fair and respect consumer privacy. It’s just as important to disclose advertising even if you don’t have laws in your country; it’s psychologically and morally and ethically the right thing to do.
Louis: Absolutely. So before we dive in into what are the actual laws that the FTC cover in this case, and how should you deliver a program that fits within this law? I just want to have as a quick rant about influencer marketing briefly, and then we go into it.
The reason why I want to rant about it is because it seems like this is very novel. You know, it’s something that had happened in last five years. Everyone is talking about that before that there was no influencer marketing. I want to call bullshit on that for several reasons, right?
And it’s all based on the Principle of Persuasion that that Cialdini, talked about in his book, right? Influencer marketing always existed in marketing since marketing exists even before that. The three reasons behind that is one, the authority, you know, people follow the lead of credible knowledge about experts. They have the consensus. People will look to the actions and behaviors of others to determine their own. And then you have the likability, the liking. We like people who are similar to us. We like people who pay us compliments, and we like people who cooperate with us towards mutual goals.
So if you combine the liking your authority under the consensus that gives you the power of, of influencer marketing. So half of the persuasion principles that Cialdini talks about in his book are relevant to influencer marketing. So it’s something that you should always focus on when you do marketing used to focus on those persuasion principles that go back to the very basics of what marketing truly is.
I just want you to say that because there is nothing new, and even if you call it something else in the next 10 years, it’s still going to be relevant to make sure that people will always look up to other people who look like them, who they find credible and they will follow their lead. I just wanted to say that.
So let’s move on to the FTC and the laws. So what are the laws, or what are the criteria that in the US in particular that you must abide to when you are building an influencer program?
Melinda: Well, we also have a law in the United States about talking about the law, and the first important thing is to say, I’m not a lawyer. So I’m not giving legal advice, I am not a lawyer, I’m not qualified, I don’t know your situation. If the larger your brand, the more important it is that you work with in house council on this so that you can have access to the most up to date knowledge. If you’re a small firm. I think that the FTC actually has a really, they did a great job.
Even if you’re not in the United States, you can go to the FTC, you can probably Google FTC guidelines for influencers, and they put them out, I think it was last year or the year before, and they’re very clear. They tell you how to comply.
And it’s very simple. They just want you to disclose it. They just don’t want you to hide it. And they approved, I think, you know, and they say that it is up to the individual influencer to be compliant. So brands have to ensure that they’re, they’re influencers are as much as they can, right? They can’t control everything. But to the best of their ability and the influencers themselves have to take it upon themselves if they participate in these programs to disclose their relationship.
My understanding is, from the lawyers I’ve talked to, again, I’m not a lawyer, but my understanding is that even if you give so much as a tee shirt, right, or a Starbucks gift card, that is a paid relationship, and it should be disclosed.
Louis: Right, so anything from swags that you send out a post in exchange for a tweet, or just an actual sum of money in exchange for them to like share something on Instagram or to their list, that’s a paid relationship, right?
Melinda: Right, so it’s not someone said something nice about you on Twitter, so you sent them a tee shirt. That’s not the same thing. This is, please blog about us, and we will give you X. That is what they call quid pro quo or a trade essentially. When that happens, then you’re required to disclose.
Louis: So I mean the other way around, which is we’ve sent you a tee shirt on an exchange you’re going to post a tweet about us?
Melinda: Right. Makes Sense.
Louis: So, okay. You’ve actually built inferencer programs like this that are compliant to the best of your knowledge obviously as you said, very rightly so you are not a lawyer, but you did talk to some. So let’s maybe go through the steps you took to build a very effective influencer program that worked and that was in line with the law, right?
Louis: So you probably, you’d be able obviously to give us an example of a company you work with, that you did that, but for the sake of the show, let’s try to extract the steps you took to make it happen. Shall We?
Melinda: Sure. So-
Melinda: Go ahead.
Louis: No, no, go ahead. Step one, let’s do it.
Melinda: Step one, you have to know who else as always as Louis said, nothing changes in marketing, and so in the sense of what are the basic steps, you have to know who you’re trying to influence specifically. So, if you’re trying to influence, if you’re trying to sell makeup, who is going to buy your makeup.
Then you want to look for the people who can actively influence them. If you don’t start from the customer first, it’s not going to work. So that’s the most important step, and I would say that when we get to talking about the specifics, this program was successful because this client knew their customer and has done their segmentations so clearly that the selection of the people in the program could be done well.
Louis: Right. Let’s go into the specifics right away, because I think this is already the super important and super interesting. So the company you work for did it very well, but perhaps we can teach people how to do it.
What are the things they should really do to make sure that they have a clear customer segment in front of them that says, okay, those are the people we must influence, and those other people that will bring us the highest revenue, the highest profit, that would be the easiest to sell to. They might be of highest criteria. So how do you advise companies and people listening to do it efficiently?
Melinda: So there’s no shortcut. In fact, in one of, in our pitch decks to clients, we have a meme that says one does not simply growth hack.
Louis: Thank you very much for that.
Melinda: Yes, and it says there are no silver bullets, there’s only persistence and determination, and sometimes you get lucky. And our client, which is DVD-Netflix, we’ll talk about the specifics of that in a moment, had not only Netflix is sort of power of segmentation and data-driven, but the client actually went into the, through sort of deep research and surveys and customer interviews got at specifically who was, would be interested in the DVD-Netflix, which is not entirely the same.
Although, shockingly three quarters of the people who have DVD subscriptions also have a streaming account. So it’s a Venn diagram. There is a subset of people who do both, and there are some set of people who are DVD only. It’s a smaller group.
So knowing what made them different, unique and special versus the larger Netflix segmentation is absolutely a best practice and all credit to Vanessa Fisk and her team at DVD-Netflix for that.
Louis: Let’s talk briefly about Netflix and how they came to be in this multi-billion dollar company. They started selling DVD, right?
Melinda: In fact in the user testing research that we had done long before we did this program our favorite when we were doing sort of user testing, we put it in front of someone who didn’t have the DVD account, and they said this is like Netflix but for DVDs.
Louis: That’s really good. Yeah.
Melinda: Which was awesome.
Louis: I think Netflix is, I don’t want to say something stupid, but I think that what 20 years old, something like that?
Melinda: Yes. In fact, the DVD just celebrated its 20th anniversary this last year, and we actually helped build a campaign around where we asked longtime customers to open to try to remember what their first DVD was. We looked it up for them and then surprise them with it on camera, which was really well received.
Louis: Oh, Nice. That sounds really good, isn’t it? We might have time to talk about this. So you, you said step one is to know your customers inside out, and it seems like Netflix on the side of the DVD, Netflix, they did some research in term of what are the common characteristics of people who subscribe to DVD-Netflix, right?
Melinda: Yup, and they also looked at RedBox, right? Because there’s a, there’s an overlap. So one, you have to have a DVD player in your house. So if you don’t have a PlayStation or an Xbox or a DVD player, you’re not going to be in the target market. But it turns out that five of seven, and they knew this from their research, five of seven RedBox users subscribe to Netflix. So if they knew-
Louis: So what’s RedBox for people who don’t know it.
Melinda: Yes. RedBox is also a; it’s a local DVD distribution. So imagine a kiosk in a grocery store where you walk in, and they’re physically disks inside. It’s like the old movie rental places of, for those of us who are old enough to remember them, like Blockbuster, but it’s a kiosk in a grocery store.
So you can go in, you put your credit card in, you pick whatever movie or game you want, and then you rent it, and it’s so many dollars a day. And you can imagine like people forget to return it. They have late fees just like you used to with a video cassette.
Louis: Right thanks. So they realize that people subscribing to DVD-Netflix seven out of eight you said?
Melinda: I think it was three-quarters of the people that, that subscribed to DVD also had a Netflix streaming account. So they weren’t, people think people think of them as old. Right? People Think, Oh, who, who has DVDs? Right. Well, the other difference is that Netflix-DVD has about a 100,000 titles, and Netflix streaming has about 6,000 titles.
Louis: Right and Netflix streaming service also takes off titles every day, new ones, so their libraries is that actually not expanding that much? They don’t just add movies, right? They take them off as well. I know for example that I’m a big fan of The Office, you know, the US TV show?
Louis: In the European Netflix, I mean in Ireland, at least they took it off, and that was just a stab in my heart. It was terrible news for me.
But okay, so go by going back to knowing your customers, something super interesting here. They’ve done a research when it comes to understanding who exactly are their people, and they all know thinking of Netflix DVD as the silo of a company that just doesn’t wear the consumers, only deal with Netflix and then they don’t deal with any other companies in the world, right?
They realized that they also subscribe to Redbox; they realized a lot of other things. So what other stuff have they realized from, and you mentioned customer interviews and surveys, which I would be super happy to dive into a bit more. What questions did they ask or what do you do want to know from those customers?
Melinda: They did a brilliant job in their survey research that got to the heart of how, when, and how people watch DVDs. So it’s a different, in many cases a different experience. People who were renting DVDs, we’re often doing it with other people.
Also, there’s a sort of a belief that people who watch DVDs in the United States must be living in the Midwest. They must not be, you know, with it people on the coast. But it turns out a huge number of DVD subscribers are on the coasts.
So often I want to watch this movie, and I want to watch it with a group of people. It’s the movie night experience. I’m going to have food. We’re gonna watch this together. And understanding that sort of drive for why to, um, to make movies sort of like a community or a collaborative experience, a shared experience versus Netflix and chill, which is maybe not always alone, right? But is often alone, is often a thing that’s done alone.
So they’re very different experiences and understanding the context in which the product was consumed was really sort of the basis or the kernel, if you will, for where we ultimately went on the influencer marketing
Louis: This is why I love customer research, and I strongly believed the same thing than you. It’s just step one or even zero of your marketing, and understanding the context is so critical because we as marketers, we tend to forget the entire context. We tend to think that our company or product is the only thing that people care about in a daily basis. We tend to think that the use it in an easy way compared to all of the rest.
Understanding the context is so critical because you can then embed your marketing within the context instead of thinking of the product, you think about, as you said, the community-driven thing. Like the fact that you’re sharing an experience with your friends instead of watching a DVD.
So do you remember or do you know, what question did they ask in the survey to understand this particular element that was critical for you to build the influencer program?
Melinda: It’s been awhile because they’ve been our client for four years. So I’ve had that survey, the results of that survey sort of living in my brain for four years. So it’d be hard to remember the specific question. But I will say it was quantitatively exhausting.
I mean they hired really good people who knew what they were doing to do, to really ask in depth how many times a week do you watch? Who do you watch with? And then you start being able, when you have enough statistical significance you can then cross tab and see, you know, where do the users live.
So one of the primary segments, there were about five different consumer segments. But out of all of this research came this one segment that we wanted to focus on for the influencer program, and it was a segment that they call bond builders, which are the people that, that to have these relationships. Often they were women. They were often moms, and they were sort of family driven, and they often lived in the south or the Middle West.
So this was sort of part of there, it not all right? No segmentation is, you know, a perfect segmentation is mutually exclusive, collectively exhaustive, but you’re always going to, human nature isn’t like that. And so, but by and large, that was the group of people we were going after.
Louis: Why did you pick this one as opposed to the other four?
Melinda: That’s a great question. So couple of things. One is, Netflix DVD and Netflix streaming are part of the same company. Netflix streaming has its own influencer program called the Stream Team, and they have their own segments they’re going after. So one is sort of, you know, friendly.
We want to be friendly, we’re all on the same team, but another is market confusion. We don’t want to have two different programs targeting the same people. So one is sort of respecting our colleagues in the growth part of the business, right? DVD under Netflix.
I think when I talked to my business school about this when I lecture to students, I say as a marketer you also have to understand the context in which you operate inside your company and where you fit and understanding that streaming is the growth engine and DVD was the cash cow. You’re not going to get all of the same influencers that are going to use the Netflix sort of stream team program.
Louis: Makes complete sense. I just want to go back to the questions, and I know it’s been four years, so you don’t necessarily remember them, but it’s, you mentioned that a few minutes ago to basically the what, the when, the where, the how, the why, and it seems like those are the questions that you really need to care about when it comes to the use of your products. Right?
Melinda: Yes. It’s not just what they do; it’s why they do it. I always say to my team; I love data. This is what we do is quantitative marketing. But the data only tells you what. You need user testing, you need interviews, you need home visits, you need empathy to really understand why and when you understand why that’s where the best marketing can come from.
Louis: So why they buy or why are they using the product right now? Is that-?
Melinda: Yes, and in this case and that’s going to vary, right? I would think. So, this is an established brand. And what DVD knew was that people were passionate people have been subscribers for 15 or 20 years. So, in this case, it’s a different question than if you were a brand new company and trying to figure out who might, but in the end, you still have to start with who is using your product and try to build out from there.
Louis: The question always around, yeah, there’s the side of stuff. So the what, the when, the where, the how, as you said, how often when exactly during the day, with who, why, and just asking those questions in surveys and then customer interviews, just talk to people. And this is something we talk a lot on the podcast.
You also said user testing, which is like more kind of a where you show them a website or your product, and then you say something else, which is super interesting. Home visits, which I think something people would be like home visit. What do you mean? So tell me just a bit more about these methods of customer research to train and understand customers.
Melinda: So it’s fascinating. Netflix actually had a, by the way, it’s such a best practice. Netflix Corporate has a website where you can take a quiz. It’s for people who work inside the company and the people and like vendors or contractors or consultants. They ask you to take the quiz, and they actually tell you which Netflix segment you are most like. They actually know their customer that well.
What I learned from that, and I’m going to answer your question in a minute. It’s a roundabout answer, but I’m going to get there. What I learned from that was that I’m actually not the target, I personally, as much as I love movies, I have a theater degree. I have been a DVD subscriber, I swear for almost 20 years. It’s one of the reasons I think they were happy to work with me is I loved and knew their product, but I wasn’t their target.
It turns out my better half; my husband was the target. Because he had the psychology they were looking for, which is the person who cares more about the quality of the film than they do about having instant gratification. You want to watch; he wants to watch the best thing. If he has to wait two days in the mail, he doesn’t mind. He’d rather wait two days for a better movie than watch something that’s less interesting on streaming, and that’s the person they’re trying to get at.
So being able to identify sort of exactly that and have somebody I could relate to, then myself and everyone else in the team, we are looking for people that were like that because it turned out very few of us fell into that category. So everyone in our team subscribed did the study, and then we set out to find just simply people that we knew who would fit that profile and then ask them lots of questions.
When do you use Redbox? How do you use it, why do you use it? What’s DVD all about? Do you know about it? Where would you learn?
And I as a marketer, there’s no substitute for it. I learned it at eBay, which was my first job in tech outside of business school, which is just pick up the phone. You’re customers are so excited to hear from you.
Imagine any brand that you love, and someone from that brand calls you and says, I want to hear your opinion. You would be flattered, and your customers will be too, and that gives you so much more fuel and creativity. I like to actually take notes about the words people use on calls and in these days now where you can actually record and transcribe the call; you can do it even easier because using their language for describing the product is so much more effective both in search queries, SEO but also in conversion and effectiveness.
Louis: Yeah, that’s a fantastic answer. There isn’t much to add this I completely agree with you, and this is the beauty of good marketing when you understand customers so well is that it gets easier, doesn’t it? It really, really gets easier. You’ll note wondering where can I reach them? Which channel are they on? Who influenced them? How should I talk to them? No, if you do your research very well, you described, you should nail it.
Obviously, it takes work, but it should be easier. And about home visits, tell me more about the concept of actually going into someone else’s home to see how they use a product in context.
Melinda: Yeah, there’s actually your user researchers if you have them, if you’re in a large enough company or a few or, but the basic thing, it’s just like picking up the phone except that you’re doing it at home. You’re asking them, so you usually give them something for their time. Just like a survey. I learned it at PayPal when I worked at PayPal, we flew to Arizona I remember, and went to home visits, and we sat with people in their homes while they used PayPal.
There’s a difference between bringing them into your office where they’re more inclined to tell you what you want to hear because they’re in your world than when they’re in their home. DVD is a very intimate brand; you watch it in your home.
So it has different connotations. I mean just not to give away the ending of the story, but one of the gifts we gave our influencers the first year was Pajama bottoms and hot chocolate because that’s the experience you have when you use DVD.
Louis: I’m glad you mentioning eBay and PayPal because I do remember a colleague of mine mentioning that he went to this conference and I think that’s probably around 12 years ago, where eBay talked about how they do home visits and customer interviews to actually understand people. And I found that was just something crazy that most people were like how can you do that? Like how, how helpful is it.
But I suppose when you went to Arizona, did it, how it’s going to be a very leading question, but did it really bring you a lot of clarity to as who you should serve?
Melinda: Oh, in fact, I mean I worked at both eBay and PayPal, and that experience actually helped me come up with the plan for this. I was the one who proposed influencers and worked with Vanessa to tie it through. So it came up. I can draw a direct line from that experience all the way through to what we did at DVD.
Well, one, it’s, it’s your senses are all awakened. Look, we’re all in. And in those days we didn’t have Skype. It’s hard to believe like that was long before eBay acquired Skype. We had AOL instant messenger, and we had, you know, we just weren’t doing things the same way.
And so one, it makes it very tangible, you know, user experience. People talk about making personas, but it’s one thing to look into a persona on paper, and it’s another to go to Fred and Mary’s house and see how they live and breathe the air that they breathe and look into their eyes. And then you know them in a way that you will never know them on a piece of data or a piece of number.
So that is very related to sort of Ebay’s way of doing this work, which is a little bit different from PayPal, but eBay had a program, I think they still do, called Voices. Voices every six weeks, a group of people, I think it was 12, would be flown in and EBay’s expense for several days, four, five days. Now, remember, we were the Google and Facebook of the time we were darling, we were throwing off cash, 85% gross margins.
So we had cash, and we would fly in these people, and they would sit in a room was always a, it was a well-chosen mix of buyers and sellers from different categories, no competitors, right? So you want to have this sort of like open group that feels comfortable and safe and executives would come and talk to them. But the most important part of voices was that every product manager had to present their product to voices and get feedback, and that product could not ship to site without community sign off.
Louis: If only the companies were doing this today. I mean, I know some of them do, but the vast majority don’t, and if only they did that, they would bring so much clarity and so much understanding of the market.
Just a small, a small thing, I interviewed recently 25 customers, that was three, a few weeks ago on just, I spent thirty minutes each on the phone and just, as you said, it just awakens all your senses. It brings so much clarity. You start to understand how to talk to them. You use the same words. It just changed everything as a marketer.
So I would really encourage people listening to this to do it. Do it now. There’s no excuse. People, as you said, love to talk to you when you ask about their life and their problems and all of that.
Going back to this influencer marketing because we haven’t really talked about that yet, but I think this is a very strong basis for it, now that you knew the segment that you needed to go after, what did you do next to identify who to pick from on the influencer side?
Melinda: Well, the reason this conversation happened was that Vanessa had engaged an influencer agency. I want to be careful about how I talk about it because I don’t want to be self-serving because I do think that traditional sort of influencer marketing agencies, they do things for the way, for the reasons that they do them and many of them grew out of the PR function.
PR is important. Oh my gosh, it’s incredibly important. It has traditionally had different goals and different objectives, that are, or may not align with the things that we just talked about. And the influencer program that she had started with that group, was just not, it wasn’t giving her results that she, that that could be sold internally.
That Netflix is a very data-driven culture. The man at the leader of the, of that line of the business as a mechanical engineer by trade. He’s not comfortable with things that are too squishy. He really wants something. He wants us to be able to put metrics around things and so that he can justify them inside of the data-driven culture.
So she just didn’t feel she was getting the results she was looking for. She felt it was hard to manage and maintain, even with only 20 people in the program. She felt that some of the people there were what I would call mercenary, you know, they were pay for play. They were not, you know, engaged in loving the brand. So there were just a number of things that didn’t work for her and we were, we had been doing, you know, for anybody, this is not an overnight sensation.
So when I tell this story, you got to know that there are two and a half years of history of Vanessa and I working very closely together on analytics around the business, around the surveys, on a ton of other work that we had done for her.
So this didn’t just like come out of you know, there’s no like, “Ooh, I was sitting in the bath, and I suddenly had this stroke of genius.” There is just nothing but years of hard work that came to this moment. One of the monthly visits that I do, because I’d go once a month and we, we just sat in a conference room and talked about this problem and we, and I will tell you, it was probably six hours. It was very intense. We just sat down and said, what are we going to do about this?
As we were talking and talking and talking, the word community kept coming up, and that’s when I drew the straight line back to eBay. I said, oh my God, Vanessa, that’s what’s missing. There’s no community here. Netflix is such a; it’s a technology company. It’s a brilliant company. You have the movies. Movies are the things that we love as Americans, and when I did the brand pitch because this is a US only based company, I had the luxury, it never happens anymore and probably shouldn’t where you get to talk about things from a uniquely American perspective.
So I got to talk about, this was in the middle like we were in the thick of the post-2016 election and we both realized that movies were one of the last places that people could connect with each other no matter what political persuasion they had. People like Star Wars, no matter who they voted for. People like the Matrix, no matter who they voted for.
So those are things that bring us together, and so we realized there was this opportunity, a rare and unique opportunity to bring community. We wanted to build a community around film. And that was the basis for this program.
Louis: Again, the sense of belonging to hang out with people who believe in the same thing. All like the same thing is deeply rooted in customers and people, right? And again, you can’t really go wrong with this feeling to know that you need to harness the power of community, of helping people connect with each other based on specific criteria.
I just want to go back to that because as you said, and as I said, marketing hasn’t changed. People haven’t changed. It’s just the methods perhaps to get to are different, but the roots, the principles are the same. So I’m glad you mentioned that. So once you’ve identified that the community was the core thing you wanted to go after, how did you execute on it, and what did you, what did you do after that?
Melinda: So we then went and looked at the program that she had and how I got her over the hump was to talk about micro influencers in particular. So the beauty of Netflix, again, this is where tactic meets company. I think good marketers don’t just use the same tool you have. You have a toolbox, and you pick the tools that fit the situation.
In this case, DVD, with hundred thousand titles had this long tail opportunity. There are blogs on the Internet about Japanese Sci-Fi anime horror, and those people have strong communities around them. There are blogs around classic film and Black Film, Blaxploitation, right? And there’s Tugolic. The Filipino community loves film and has its own community. So being able to find the data on micro influencers was so compelling. Consumer trust is off the charts relative to macro influencers. Engagement rates are 8% plus.
They have almost half a percentage point of posts with comments. That’s 10 times, okay, 10 times the comment rate on a macro influencer. So instead of this sort of mercenary, we pay you x-thousand dollars, and you and you build do a thing for us, we build a relationship with the group of people, and we encourage them to build a relationship with each other because that was the big learning from eBay.
When you help connect your customers to each other, the sort of evil marketing horns side of it is that you saved money and customer support costs, but you also build a brand of people who love each other, and they come, and they stay for that, which was a very powerful part of eBay‘s success and turned out to be a very powerful part of the success of the DVD nation.
Louis: Again, I’m not a big fan of the world micro influencer, and we have to use it because people use it, people understand it-
Melinda: You have to have a word.
Louis: You have to have a word indeed. How would you describe it, like briefly?
Melinda: Well, there’s, you know, there’s like seven different definitions right now. We defined it; we were not afraid of people who had as few as a thousand followers if they were legitimate. So there were theater or film professors who had very small followings but knew what they were talking about. Since then, by the way, one of our DVD directors has actually gone on to produce her own short film with equipment that she bought from what she earned from the program.
Another person, out of this, started out as just a blogger around classic film and now she’s a recognized journalist and goes to South by Southwest and Con. So it was recognizing even small folks who were doing what they did out of passion and love and finding a way to encourage them to do more of it. So that number, you got to define it for yourself. We defined it at the time is somewhere between about one and 10,000 followers.
Louis: Right? So people who have a decent following egg, a small following, but people will not like, we don’t have fake followers per se. You just have a very niche thing that they own. As you said, it could be like some few very narrow like classical movies into Japan and Japanese history, like someone who just focused on that, what else? Whatever else.
There are people that follow them out very much more engaged in the traditional influences. We have a massive following because they have such a niche that people just dig what they say, what they do much well done than bigger influencers. So that makes sense. How did you identify those people and in the first place?
Melinda: Well, it’s interesting. So there were, I thought one of the things that DVD team did on this is them, is they had been, they watched on social media to see who was already talking about them. So they, they first did that. They just paid attention to the conversation who was regularly, whenever some weird post would appear on Reddit about who rents DVDs anymore. Who was saying that that was bullshit on social media, they knew that that was the core.
The second thing they did was put a very vague announcement, very vague because we still didn’t know, once we got approval, we were rushing as fast as we could to ship a platform. We still didn’t know what, what would the rewards would be. So there was this vague sort of call in their monthly email, and they got almost 8,000 applicants for the program.
Louis: What was the call about, like what was, briefly?
Melinda: It was very soft. It was very much like, do you like movies? Do you have a social media account? Do you want to try being part of a program where some vague reward may come to you at some point? I mean phrased much more professionally, but you don’t know very sort of soft call, and at the bottom, it wasn’t even like sign up now. It was just, “Hey, if you happen to be reading this, and you’re curious.”
Then we drove them to a Google form where we asked, okay, what are your social media handles? Who are you? And so on and then we actually vetted all of them one at a time. We went through, we did a pre-pass my team did, but then the DVD team took their own look because there were, you know, because this is a conversation, right?
So we learned from them, and we got better at filtering, and then we would do multiple passes. Yep, this one looks like they have a lot of fake followers. Nope, this one isn’t right. That’s how we got down to the original group of about 200 that we finally went with.
Louis: For companies who don’t have a massive following or email like Netflix would have, how do you advise people to, to identify their influencers and reach out to them?
Melinda: So certainly as Netflix did or DVD did, identifying who’s already talking about you. It’s always better to encourage behavior that’s already happening. Another thing that DVD Netflix did, very smart idea was that when we were doing the 20th-anniversary campaign last year, they asked the people that were already going on camera so that they, we added more people into the program because they were already talking about us though.
The other thing that they did was once people are in the program, and they would ask, they would give them rewards for inviting people into the program that they knew would be good additions. So those are things that you can do even if you’re a small firm, you know, it’s starting with a nucleus, get that first seed of people right.
That first sort of, you know, start or even if it’s only 20, believe me, I just came back from the Social Media Strategy Summit and even the largest companies dealing with sometimes influencer programs as little as 20 people there a lot, they can be a lot of work to manage. Start with that small seed of people and then when you get that right, then you’ll build out in a more effective way.
Louis: Right, and you focused on the tiniest audience possible, right? The ones that really, really fit everything you believe in, in terms of values, in terms of culture, in term of, as you said, the amount of fake followers versus not et cetera, and you start with this nucleus as you said, and you asked for recommendations from the small group because they are likely to know or people like them, right?
Melinda: That’s right.
Louis: Now you’ve selected from 8,000 to 200 people, right? And you’ve looked at criteria like fake followers and whether they felt right, whether the values were there, whether you could feel like you could work with them. Then what happened? How did you go from that to next step?
Melinda: So then, so actually there were the original 20 people which were, that were in the previous program. They were grandfathered in at the highest level, and then we built a four-tier program for the new folks to work their way up to. What this allowed the DVD team to do was essentially start to manage and measure the impact. So we actually customized and built a platform for a lot less money than you would think that enabled people to both tweet and Facebook from that platform.
So we could measure their activities, but also they would upload that, those activities, whether by URL or so on to the platform. And then that way, we can confirm FTC compliance before rewarding them. And so we built a gamification and points reward system behind it where folks could earn everything from Amazon gift cards to popcorn balls.
So we built it, and it’s beautiful that I’ve got pictures I could show you, but the, the most interesting part of it was that you’d think there’s, so I’d love to tell you, “Oh gee, no problem.” Happy ending, right?
Except that what happened was that the people that were originally in the program loved it, loved it, thought it was better than any brand program they’d ever been in. They loved that everything was clear that they understood what was going to happen, and in fact, they gave us a net promoter score of 93.
But all of these new people we brought in gave us a net promoter score of 36. So this was a problem because engagement rate, they’re, their participation rates, activity rates were not great, and this was bad. So what we had to do was iterate quickly and find out what was not working for them. What we realized that a lot of these folks with these small followings, they were passionate about DVD and loved it, but maybe they didn’t know how to be productive, and they also weren’t as connected to the brand.
So the DVD team started holding monthly webinars for every new batch of every cohort we brought in. And we measured performance by cohort, right? So the people that are brought in before the change versus the people that brought in after the change. They had monthly webinars to introduce themselves and make a human connection so that people said, “Oh”, because what we discovered was that people really liked interacting with Vanessa and Annie and they felt more connected to the program when they knew they were talking to them directly.
We built a Facebook group so that they could talk to each other and have constant communication with the brand and, and we made it easier, you know, we made some changes to the platform to make it easier and all of those things essentially just, you can just see the level uprates we have in our presentation. You can see the hockey stick that comes when you listen to people, and you make it easier.
So by the numbers you know, the, there was essentially per user on average there were 27 value-added activities they did per user. 163 for the directors who run the largest end of the program, seven-x, the number of blog posts in one year, their entire 2020 or 2019 content calendar is done. It’s been a pretty remarkable ride.
Louis: All right. When you’re talking about the value-driven thing that they did, so is it like sharing a tweet, showing a Facebook message, writing a blog post, what else?
Melinda: We sat down and created a whole sort of, you know, value-added activities system. So everything from downloading the app, to writing a blog post, to hosting an Instagram story or a Twitter chat, and those had points, you know, various, levels of points associated with them based on how much effort they were giving, right? Hosting a Twitter chat is a lot more work than tweeting something. So we, basically, and then those points they can cash in for rewards on the platform.
Louis: That sounds like, yeah perfect influencer program that respect the law, that also is in line with the company culture, that respects the people being part of it.
How do you advise smaller firms again, to do something similar? Have you come across any, I don’t like to talk about software perhaps too much on this show because softwares come and go, but do you have any advice for people to, to achieve that at a lower cost perhaps or without the resources?
Melinda: A lot of the work that we did could be done with a Google sheet and a Facebook group if you’re willing to put the time in. I love the way the VCs talk about money as frozen time, right?
So you’re going to spend one way or another. So you could do this, if this was the focus of your company, you could do this with one person, a Google sheet, and a Facebook group, if you keep it to like 10 to 20 people.
It’s a lot of work. It is a lot of work. It is a full-time job, but it can be done. And so it’s a question of focus, which is what I would tell any startup founder anyway, is that you shouldn’t be in every channel all the time. You should pick one or two and really sort of concentrate and focus on that.
So it’s not, it’s again, you know, pick your analogy toolbox, golf club bag, whatever. You have all of these things in here. Influencers aren’t for everybody, but I think there for a lot people than are, are thinking about them right now and there’s some really interesting work that’s being done even on B2B side.
So I, I want to be careful not to sort of imply that this is the type of program that only works on a consumer basis. Humans are humans we’re influenced by each other, whether we’re at work or we’re at home.
Louis: Absolutely. There, there’s no difference there, apart from the role they have in decision making when it comes to buying. But as you said, humans are humans. When it comes to the prices. So you mentioned that an interesting prize you would give away, which of all like pajamas and a cup of hot chocolate or something like that, was it?
Melinda: Yeah, that was the annual gift for directors. So on top of their points, people who are at the highest end of the program get a special gift, right? There’s a lot of surprise and delight. You want to really have people who are doing the most work for you, feel nurtured and cared for, and so they got a special reward, and that’s, and we put a lot of thought into it. What is the annual gift? What is it that makes them feel part of the community and, and fits with the brand.
Louis: And it ties back to the entire context that you understood from the consumer research, which is, you know, the fact that when you’re watching, when you’re using Netflix DVD, it’s more about watching something with friends and like movie on Saturday nights with friends and family rather than just watching it on your own. And so the prizes that you picked are probably in line with that.
Melinda: Yes, and that’s exactly what that’s about. On top of that, I was talking about community. Vanessa took that group of, that core of 20 people this last year; they had, they took them on an annual trip, which they do every year now. They, took them to the big DVD hub, you know, where the, it’s fascinating where all the DVDs are processed and mailed in Anaheim, and they went to Disneyland.
But the one other thing that she did was, David Raether, who works with us and them who was a Rosanne screenwriter for 11 seasons, a really experienced writer, worked with them for a couple of hours on how to do a better blog post about movies. And the quality of the blog posts that went up after that, but also people’s commitment to the program because they felt invested in.
So back to this idea of growing your own, you know, you’re not going to have the money to pay Kylie Jenner if you’re a startup. But finding really passionate, enthusiastic, and engaged people and finding a way to invest in them and nurture them creates incredible loyalty and commitment, which, you know, Vanessa likes to say that you don’t buy passion, you earn it. And I think that’s true.
Louis: Well, that’s probably the perfect way to end this step by step towards building proper influencer marketing programs. Melinda thanks so much for taking the time to do this. I have just three questions to ask you before I let you go.
Melinda: Sure, happy to.
Louis: What do you think marketers should learn today, that will help them in the next 10 years, 20 years, 50 years?
Melinda: Well, I just had Avinash Kaushik, the evangelist for Google analytics on my own podcast, the Staying Alive in Tech Podcast just this last week. And I asked him this question, and I think it’s the right answer. He said that if a marketer understands not only how to interpret data, but also how to communicate insights to others about that data and tell the story about the right thing to be done. They’ll always have interesting and meaningful work.
The other thing is I asked my team this question. So, you know, full disclosure, Louis did give me some heads up, but I wanted to ask my team because I really think asking them is important too, and to a person, they said how important they felt it was to learn about people. And it was, we talked about the data will tell you what, but the people is the only way to know why, and it’s in the why, where the solutions are.
So I personally read in a wide variety of fields. I read in neuroscience, consumer psychology, leadership, rhetoric. I have a theater degree. So I got a lot of training about storytelling in my younger and wilder days. But if that’s not your field, storytelling, whether it’s writing or theater is another great sort of field of inquiry. To that end, I think it’s important to learn about other people. It’s important to take the time to learn about people other than your cohort.
I especially mean this in other countries. We, Americans are really bad at this. We need to be better. Um, other races, other religions, other ages. A good marketer should be able to be empathetic, and my favorite example of that is the business school classmate of mine, a guy and a particularly “guy’s guy”, who was the brand manager for Tampax tampons.
I love this story because it’s true. You can sell tampons as a man if you are empathetic enough, and if you understand your customer well enough. In some ways, I’d argue it’s actually easier when you’re not the target because you can step back and distance yourself from your own emotions.
DVD is actually one of the hardest clients I’ve ever worked on because I love the product so much, but I’m not the target. I have to constantly remind myself that my first instinct with them may not always be right, because I am not this like this, you know, the psychological target.
And lastly, I will tell young people because I made this mistake, don’t get too comfortable because only a few years ago I saw agencies basing their entire practice on Facebook video. And you know, recently it’s come out that Facebook’s been overstating that. And now we got problems.
So when I was a young marketer, Twitter, Facebook, even Myspace, they didn’t exist. And so you’ve got to stay ahead of the curve. I had Tom Peters, the author of I’m in Search of Excellence and is one of my books I recommend. He was for many years, one of the top 100 most influential people in Silicon Valley. And he told me he’s 75. He said one day I looked up and saw that the herd was like, you know, a half a mile in front of me.
So I had to double down, and he spent a year reading a hundred books in order to catch up with the herd. So now he’s on fire again and his Twitter feed is also just an inspiration. Like you just have to keep staying in front of the curve. Don’t get complacent.
Louis: On the back of that. What are the top three resources you recommend our listeners?
Melinda: That is a super hard question. I thought long and hard about that because it really depends on what your training is and what your goals are.
So we’re in a growth phase now and even though I have, you know, have a business degree and have studied leadership, I have come back to reading books about entrepreneurship and leadership because it’s one thing to learn about it in school and it’s another to do it. So it’s like a refresher, and a reminder of that’s what I want to be studying in leading.
But if I was a junior marketer these days, I would say you can’t go wrong with Seth Godin, who you had on your podcast. Pretty much anything he’s written, you should read. I’m personally a big fan of The Dip. And the Icarus myth both are just like so tight, so brilliant. I aspire to, to speak with the efficiency that he does. Um, of course, David Ogilvy’s on advertising. If you just want to remind her about how nothing ever changes.
I also recommend Tom Peters’s book, because it’s called the excellence dividend because he is so clearly talking to us in tech about extreme humanization. It goes right to what we’re just talking about earlier, Louie, about people and the importance of people of making technology work for people, not the other way around.
Louis: Well, what an answer as well. Melinda, I can say I’ve really enjoyed our conversation and super glad we connected on Twitter even though it didn’t start necessarily on the right foot. You’re clearly an expert in your field. I learned a lot from this hour conversation. So thank you very, very much for your time. Where can listeners connect with you, or learn more from you?
Melinda: They can certainly find our company at timesharecmo.com as well as on Twitter. My personal Twitter feed is at MJB-SF, and I welcome you to the conversation and likewise, Louis, you know, it doesn’t matter in the end how you found each other. We found each other, and it’s awesome.
Louis: And you have a podcast as well. So repeat, what’s the title?
Melinda: Oh, yes, thank you. The title of my podcast is called Staying Alive in Tech, and it’s all about war stories from the past as well as sort of practical advice for today, but it’s really if you want to really understand people who’ve been doing tech for a long time come and check us out. We’re trying to do oral history of Silicon Valley. That’s some great stories.
Louis: Fantastic. Once again, thank you so much.
Melinda: Thanks, Louis.