Index cracks code on word-of-mouth advertising
Word-of-mouth recommendations have long been recognized as the "holy grail" of marketing success for any product or service. Through the launch of the newly created Recommendation Index, marketers now have insight into which brands are most recommended across a variety of consumer categories—and why.
 
In addition to providing an overall ranking of both positively and negatively recommended brands, Recommendation Index, a joint effort between Zocalo Group and M/A/R/C Research, also creates a score that marketers can use to compare against other brands in the same category.
 
The Casual Dining Restaurant segment is the initial focus of what will be quarterly reports examining a variety of industries. Leading the Recommendation Index of the 10 most recommended brands are California Pizza Kitchen, Texas Roadhouse and Outback Steakhouse, followed by Applebee's and the Cheesecake Factory. Except for buffet-style restaurants, CDRs typically provide table service and comprise a market segment between fast food and fine dining establishments.
 
Unlike previous metrics that only ask "Would you recommend this brand?" the Recommendation Index evolves the measurement to determine why, where and how often people recommend individual brands as well as how each brand compares to the overall category.
 
"The recommendation of a friend, family member or expert is the No.1 reason consumers buy in almost every category," said Paul M. Rand, president and CEO of Zocalo Group. "Marketers who understand where and how their category is talked about and recommended — and how their brand stacks up — gain clear competitive advantage."
 
The study identifies the top words or characteristics that consumers use when making a positive or negative recommendation for a casual dining restaurant. Triggers such as "fast," "variety" and "friendly" are among top indicators.
 
"The Recommendation Index looks not just at how consumers talk, but also at their actions," noted Merrill Dubrow, president and CEO of M/A/R/C Research. "We wanted to move from the hypothetical to the actual. The potential implications for brands are significant."
 
The average Recommendation Index for CDRs of 3.01 is the average index value of the most recommended brands in the category. The average provides brands with a means for gauging the level of recommendation against the overall industry.
 
"Once marketers truly understand why and how brands are recommended in their category, they can adjust their messaging, communications — and even their operations — to ensure that they become and stay the most recommended," Rand said.
 
Methodology
 
The Recommendation Index was compiled through both offline and online analysis of conversations about casual dining restaurants. A representative group of 1,020 CDR patrons was asked about brands the patrons most often recommended positively and negatively and the attributes they use to make these/their recommendations.
 
The most frequently recommended brands identified in the survey research were then analyzed in online conversations occurring through blogs, forums, Twitter and other discussion venues. Online analysis focused on the naturally occurring organic conversations about those brands and the words consumers use in talking about the most recommended restaurants.
 
The Recommendation Index is the relationship between the volume of positive recommendations and the volume of negative recommendations. The Index will be released quarterly and focus on different industries and brands with the intent to also show the change in recommendation by industry year over year.
 
To learn more about the Recommendation Index, marketers are invited to participate in a webinar hosted by Zocalo Group and M/A/R/C Research on held Dec. 14, 2009, at 2 p.m. Central Standard time. To register for the webinar, please visit www.zocalogroup.com or www.recommendationindex.com.

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