Are Influencers Outside Your Circle of Trust?

Influencers Outside the Circle of Trust

“Did I not clearly explain the circle of trust to you, Greg?… Then is there something you want to tell me?… See if I can’t trust you, Greg, then I have no choice but to put you right back outside the circle, and once you’re out, you’re out. There’s no coming back.” In case you didn’t recognize it, that is part of a dialogue between Jack Brynes and Greg Focker from Meet the Parents, 2000. It is a very funny movie. Highly recommended if you have not already seen it, but, more importantly, the “circle of trust” is a fun and memorable metaphor for how we can lose the trust of another, and, once lost, it is hard to get it back.

That is what consumers are feeling when it comes to influencer marketing – influencers have lost the trust of their followers. Influencer marketing has become such a popular channel among marketers over the past 10 years that people in all fields are trying to be a social influencer – like it is the new path to fame and fortune. Well, it is exactly that, I guess. The more followers a social influencer has, the more famous he or she is, and the more he or she could demand from marketers. But, it seems fame and fortune are at odds with trustworthiness.

Social influencers are not the gold standard for word of mouth marketing they used to be. Consumers have lost trust in social influencers. According to the Wave study from media agency UM, the majority of global internet users have little to no confidence in what influencers say online. Only 8% of people believe that information shared on social networking sites is true, and that drops to 4% when the content comes from influencers[1].

What happened? It is a question of authenticity. There are enough influencers that are willing to endorse everything they are paid for that consumers have become skeptical of the influencer’s authenticity especially when he or she is recommending something like a brand, a destination or a product. Take Gigi Hadid, a Victoria’s Secret angel, for example. She partnered with McDonald’s[2]. Apparently, fans do not like it when their influencer endorses something that is obviously not something they would use – or, in the case of Gigi Hadid, eat.

The Gigi Hadid case is a rather obvious inauthentic endorsement – perhaps deliberately so by McDonald’s marketing team – but consumers are not blind lemmings. We follow influencers for their authority and authenticity in their field of interest. We would follow Gigi Hadid for her style and beauty, but not to get recommendations on fast-food. 

Micro Influencers Are More Trusted

The influencer marketing industry has been evolving. Marketers have shifted from seeking the influencers with the largest number of followers to a particular segment of influencers they categorize as micro-influencers -influencers with 1,000 to 10,000 followers. This is because micro influencers have the highest engagement rate and now “perform the bulk of successful influencer marketing (at least 90% of it).”

CircleOfTrust-MicroInfluencers

In fact, statistically, the fewer followers an influencer has, the higher the engagement rate as shown in the results provided by SocialPubli.com below.

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And it makes sense. Here are the main reasons why influencers with smaller followings have higher engagement rates:

Followers makeup: Their audience is still growing and made up of people they have met, people who have followed them from the beginning, people who generally love their content and people in their personal friends and family network. 

Their ability to be personal with their audience: Micro-influencers cherish their growing community, and they are readily available to attend events, interact with followers, reply to comments, engage with their community and have a presence offline, as well as online. 

Authenticity: Their audience trusts them, which is more uncommon when it comes to macro-influencers who regularly work with a wide variety of brands, and are known to take on paid advertising projects. 

However, as micro influencers grow to become macro influencers, it is almost inevitable that they will experience some degree of decreasing engagement rates. Their new followers would likely not have been connected first-hand with the influencer, and the influencers would have less time and ability to interact with most of their followers.

For Recommendations, Authenticity is Key

The one area influencers could maintain control in their quest for engagement as they grow is to be authentic, but that would mean loss of marketing deals. It is a conflict of interest. How can an influencer get paid and still maintain objectivity? Is it not almost a like switch: as soon as the influencer posts a paid recommendation, followers become skeptical at his/her authenticity?

Well, not necessarily. It is possible to be a mega influencer and still convey authenticity. Take Austin Li, the top reviewer of lipsticks on XiaoHongShu with 3.2 million followers. Despite such a large following and knowing Austin is being paid to recommend and/or sell the lipstick, his recommendations can still garner 3.8% engagement rate (which is relatively high for such a large following). Austin has been able to do this because of his authenticity and authority on lipsticks. He appears impartial when it comes to recommendations. If he is not into a particular product, his blunt criticism of big brands conveys trustworthiness.

Authenticity plays a very important part in follower engagement rates, but not all influencers are or can be as authentic as Austin Li. The web is riddled with stories telling of social influencers asking businesses for discounts or services for free with the promise of sharing a favorable post on them. While this business proposal may be mutually beneficial for the influencer and the business, as consumers of the influencer’s post, we have to wonder, how authentic is this recommendation?

While there may be exceptions, the inherent conflict of interest between influencer and influencer marketing no doubt exists. 

Avoiding Conflicts of Interest

As consumers, we should always be weary of conflicts of interest when someone is recommending something to us. We have to judge whether a recommendation is trustworthy or not no matter who it comes from. Influencer marketing is a difficult channel to trust given the inherent conflict of interest – at least when it comes to recommending things. Marketers and influencers need to find a compensation solution that does not dilute the authenticity and authority of the influencer and at the same time conveys the desired message to the intended audience.

One solution that influencers could do to maintain a sense of authenticity is to show on their recommendation post that it is a sponsored ad. This way it is more transparent. Followers can judge for themselves if the post is authentic knowing it is paid. However, for the same reason, it could hurt the marketer’s ROI, and so there may be pressure from marketers not to do so.

Community Forums, a Trusted Recommendation Channel

Reviewers, such as Consumer Reports, whose compensation is not paid by the marketers, are more trusted for recommending products, but, these review channels work best for hardware and have problems attracting the younger generation, because such reviews lack personal attachment. 

Search apps, such as Google and Yelp whose reviews are generated by users, can be authentic, but they do not only lack the authority that influencers and professional reviewers portray, they also lack psychographic alignment and curation provided by those other channels. 

Community forums like Facebook Groups and Reddit are good channels to get custom recommendations. Recommendations from community members are perceived as personable, authentic and psychographically-aligned, and, while they may not portray as high of a sense of authority as influencers, the reputational risk taken on by the recommender in front of his or her peers does provide a sense of assurance. From this perspective, I think community forums are most similar to influencers’ recommendations compared to the other alternative recommendation channels, and community forums are not subject to conflicts of interest – at least not yet. 

CircleOfTrust-Communities

However, community forums are a different kind of social platform. They are different from the likes of Instagram and Weibo where users follow influencers and discover recommendations. These Instagram-type social platforms are much more pushed based than pull. Whereas community forums are more equally pull and push. Members can ask questions, suggest recommendations, or simply discover what others are saying. Where push-based social channels are like watching your favorite celebrity on TV, community forums are like discussing what you just saw with your friends. I believe they are complementary. Your favorite celebrity chef, Gordon Ramsey, recommends his own chain of restaurants. Your foodie community members can tell you what they thought of the restaurants and suggest alternatives.

Can Marketers Leverage Community Forums?

We know marketers gravitate to social influencers. While community forums usually have a focus on a topic, as opposed to a focus on an influencer, they can still be great channels for marketers nonetheless. 

If a community is formed on the basis of recommendations (as opposed to general discussions) then members are essentially there to “shop socially” with like-minded people. This particular type of community forum would be like a direct sales party – think Amway and Tupperware – but instead of just a party for one brand, it is an on-going party that members can introduce any brand. In this party, marketers can find existing members, who would be willing to try out their products and have them introduce the product to the community. While the member might not have the same authority as an influencer, he or she would likely be trusted and because he or she is more of a peer would foster more dialogue about the product.

Taking this direct-sales party model further, XiaoHongShu is effectively one large direct-sales community for fashion and beauty products and mega influencers have grown out of XiaoHongShu’s platform. So even within communities, assuming they are large enough, influencers can play a role. The problem is once it gets that big, the sense of a community may diminish, and the platform becomes more like that of a platform for following influencers rather than one for joining communities. To maintain the feeling of a supportive and engaging community members must feel they can always give and get open and direct feedback no matter how big the community gets.

The Bumping App – Recommendations from Trusted Communities

Having had a number of disappointing experiences dealing with service providers and witnessing how conflicts of interest result in questionable authenticity and hence trustworthiness, we decided to create a tool that aims to provide consumers with trustworthy recommendations. To this end, we have designed the Bumping App to leverage the trusted and engaging characteristics of community forums with a focus on recommendations. We want to make giving and getting recommendations as trustworthy, efficient and relevant as possible. The Bumping App is designed to make you feel you have the validation of your support group no matter what you are doing. Give it a try today!

Sources:

[1] Hands up. Who Trusts Influencers?, Dominic Carelse, Miappi, May 24th 2019, https://miappi.com/alternative_to_influencer_marketing/

[2] Do your customers trust influencers? KELSIE RIMMER, Tribe, https://www.tribegroup.co/blog/do-your-customers-trust-influencers?

[3] 50 Influencer Marketing Statistics, Quotes and Facts, Influencer MarketingHub, Nov 14th 2019,  https://influencermarketinghub.com/influencer-marketing-statistics/#:~:targetText=There%20are%20three%20types%20of,least%2090%25%20of%20it).

https://www.scrunch.com/blog/micro-influencers

https://www.linkedin.com/pulse/top-1-lipstick-kol-xiaohongshu-guy-miro-li/

Would it Take Teleportation to Save Brick-and-Mortar Businesses?

Difficult to Discover Brick-and-Mortar Businesses

Those of you who have been to Hong Kong know there is a shortage of space here. For a lot of small and medium-sized businesses, this means they have to locate on upper floors of buildings to be able to afford the space. As a result, their locations are out of sight of “curbside” traffic. A consumer really has to know the business is up there to go there. That is why a lot of small businesses struggle in Hong Kong. Rent is extremely high, and businesses have to be very creative to attract customers to their store. 

Ecommerce Marketers Gravitate to Influencers

An effective solution for ecommerce businesses to attract consumers has been influencer marketing. However, influencer marketing has not been the panacea for brick-and-mortar businesses. Why not?

In its most innocent form, influencer marketing is simply a friend telling us about a product he or she finds good and is relevant for us. Yet, that is arguably the most effective form of marketing. When a trusted friend tells me about a product, I tend to look it up online, discuss it with him or her, and see what it is and why it is so great. I might or might not buy it – depends on a number of factors – but at least I checked it out, got familiar with the brand, and would probably talk to my friends about it later. How awesome is that for the marketer? When it works, it results in a very efficient, seamless customer journey as shown in the flow diagram below.

Influencer Brick Mortar 1

Notice how the flow diagram above does not show the consumer Googling for competitive comparisons and social proofing, and price comparisons? These are steps we often take when we are left to our own devices without a trusted influencer or friend to recommend something. This is because, when our friends make a recommendation, they take on some reputational risk. If what they recommend is not good – they look somewhat foolish. So we feel our friend must be quite convinced of the product or service before recommending it. For the same reason, we also expect their recommendation would be relevant for us since they know us, know what we like and our lifestyle. In other words, we no longer feel the need to read reviews on the product or comparison shop.

So, for brick-and-mortar businesses, how effective is influencer marketing? A recent survey shows 91% of restaurant customers have gone to a new restaurant solely due to a friend’s recommendation. So being able to get friend’s recommendations on where to go is valued, but why have not brick-and-mortar businesses benefitted as effectively from influencer marketing as compared to ecommerce? While I have not been able to find specific statistics on influencer marketing’s effectiveness on helping users discover brick-and-mortar businesses and resulting in their arrival to the location afterwards, practically all of the “Ultimate Guide to Marketing Your Brick and Mortar Business” publications that are available online suggest businesses should implement their marketing strategy through optimizing local search followed by brand building and local content marketing. Recommendations to use social media are mainly for social-proofing, and not for helping consumers discover their business.

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Source: https://www.touchbistro.com/blog/how-diners-choose-restaurants/

Influencers cannot Break BARRIER TO ACTION for Brick-and-mortar Businesses

Brick-and-mortar businesses in different industries would get different value from influencers, but common to them all is one glaring issue: brick-and-mortar businesses require the consumer to go to their location. This poses a barrier to action.  While a recommendation to go to a place by a trusted individual still confers reputational assurance and relevance, when we are at home browsing social platforms, being inspired to go to a location or a store is not immediately actionable; we would need to transport ourselves from our homes to the location somehow and that is a large effort to overcome – it is a barrier to action – unless we could teleport there and back easily! As opposed to having a seamless integration between the recommendation and the location, we would have to store the recommendation in memory and recall it at the time when we need it. This of course does not usually happen. We tend to forget.

When we need recommendations We Do not have them, So We Use Search Apps Instead

We as consumers typically look for services or businesses when we need them or when it is convenient for us. The need motivates us to invest the effort to find the place, and it is usually not triggered by advertising but at our own timing . At that time, we usually use a search app to find a list of relevant places (as we would have likely forgotten any prior recommendations), but search apps do not provide curated recommendations for us. We have to spend time and effort sifting through the result list to find something that might be okay for us. It is risky.

Influencer Brick Mortar - Forget when Need

Another time when we could do with recommendations is when we are outside where it would be much more convenient to visit the recommended businesses. At that time, the barrier to action is effectively lowered, and we would be much more inclined to pay the business a visit if only we recalled the recommendation while we were there, but again this doesn’t usually happen. 

Influencer Brick Mortar - Forget at Nearby

So Brick-and-mortars Rely on Search Apps

As a result, many brick-and-mortar businesses to attract consumers to their location focus their marketing efforts on SEO, SEM and Review apps, because, well, we use them. But, as mentioned earlier, these apps require effort and still leave us feeling at risk every time we venture to a new destination. Brick-and-mortar businesses do use influencer marketing and social marketing, but more so for customers to get social-proofing after they have arrived at the store.

What Do Consumers Want?

Teleportation…

Ok… Another solution would be to have a Jeeves, a know-it-all butler who is always in tune with the rhythm of the city, knows our preferences, and is always by our side giving recommendations when we need them, and informing us of things we would be interested in without our asking. When Jeeves recommends something, we would feel confident that it is not only relevant to us but also the best option out there as he is informed of all the options available for all topics.

If we had a Jeeves, I believe he would solve the barrier to action as we could get curated recommendations when we needed them and be notified of interesting things when relevant. In other words, we overcome the barrier to action by getting relevant recommendations at the right time.

Now, needless to say (but I am saying it anyways), we could not all afford a Jeeves (even if he exists) so the next best thing would be to simulate a Jeeves. A simulated “Jeeves” would have the following characteristics for providing recommendations:

Screen Shot 2019-11-14 at 3.34.18 PM

Ok. Sounds great… So the big question is how do we provide our simulated Jeeves with trustworthy sources of recommendations that are psychographically aligned with each of us and with sufficient coverage across most if not all industries?

Just-in-time Trustworthy and relevant Recommendations

At Bumping App, we believe communities are the answer. Instead of looking for an incredibly connected and knowledgeable Jeeves who knows each of our values, interests and lifestyle, we connect ourselves with a community of like-minded individuals who would provide us with recommendations that are relevant to us and the community. Since there are many individuals in communities, we can feel more assured that there is sufficient coverage of businesses. We then store and organize recommendations as they come enabling users to search for relevant recommendations when they need them. We can also deliver relevant recommendations to the user when the user is nearby the recommended location, or when the recommendation is relevant timing-wise. 

Influencer Brick Mortar - At Time of Need
Influencer Brick Mortar - Nearby

Until teleportation is a reality, the Bumping App providing trustworthy and relevant recommendations at the right time might be the solution we are looking for.

How Big a Problem is Fake Reviews and What Can Consumers Do to Avoid Them?

By now, we are all aware that there are less scrupulous businesses that post fake reviews, but what you may not be aware of is just how prolific fake reviews are. A recent article (Nov 6th 2019) by BrightLocal cites the following statistics:

• 74% of consumers have read a fake review in the last year
• 89% of 18-34-year-olds have read a fake review in the last year
• One in seven TripAdvisor reviews could be fake
• 61% of electronics reviews on Amazon are fake
• 55,000 fake reviews are generated on Facebook per month
• UK’s Competition and Markets Authority (CMA) estimates fake reviews potentially influence £23bn of UK customer spending each year

Fake reviews are a serious problem not only for consumers but also honest businesses, and there is not an effective way for review platforms to combat them.

What can we do as consumers?

Review platforms and business competitors will tell you to report suspicious reviews to the host platforms, and the platforms would punish or ban businesses that purchase reviews. However, fake reviewers are getting more savvy, and it is not easy to spot them. If they were easy to spot, then the statistics shown above would not be so pervasive.

Of course, one solution is getting recommendations from people you can trust. For one, this will effectively eliminate the concern of fake reviews, and, if enough people are avoiding ratings from the general public, fake reviewers would be in less demand. Businesses would then be able to focus on good old fashioned customer service to get their customers to tell their friends.

But for most of us, we do not know enough people to get sufficient coverage of all the types of places and products we would like to get recommendations for. For example, what if you wanted to find a good, authentic Korean restaurant in Hong Kong? What are the chances your friends, accessible to you now, know most of the Korean restaurants in Hong Kong? Chances are they know a few Korean restaurants and perhaps one they consider authentic, but there could be others that are better. Our immediate circle of friends generally does not have first-hand experience at a sufficient number of establishments for us to feel that we would get comparably-good recommendations.

We believe the answer is in participating in a trusted community where you can share recommendations.

Asking community members for recommendations is evidently effective. Just look at Facebook Groups, Reddit, and Quora to name a few. Asking community members enables users to get more trustworthy recommendations as members of a community are not anonymous – instead most communities require invitations to join – and there are usually large numbers of members in communities. Further, communities tend to attract members who share similar interests, values and lifestyles. Therefore, recommendations from members of the same community tend to be naturally aligned with the requester’s interests, values and lifestyle.  

We created the Bumping App so that we can feel safer about recommendations. The Bumping App fosters communities of like-minded people to share recommendations on places, services and products, and curates the recommendations so that finding what you are looking for and discovering things and places that interests you are trustworthy, easy and fun. 

With Google at our finger tips, why do we still ask our friends for recommendations?

Why do we prefer asking our friends for recommendations when review apps like Google, Amazon, OpenRice, TripAdvisor, and Yelp are widely adopted?

I do not think it is for fear of fake reviews. I mean, we should be weary of fake reviews – there certainly is a proliferation of fake reviews – but, at least for me, that is not the primary reason why I ask my friends for recommendations. Right or wrong, when I see ratings from thousands of reviewers, I feel quite safe that the average rating is trustworthy. So then, what other reasons are there for why we ask rather than search?

I believe there are four reasons why I still ask my friends for recommendations:

The first is that we are not all alike. My interests, values, and lifestyles – my psychographics – are likely different than say a young teenager’s. What one person likes does not mean others will like the same thing. When I see thousands of reviewers giving high ratings to a particular restaurant, I still need to read the reviews to get some assurance that a like minded individual finds the restaurant good, because the thousands of reviewers could all be tourists with different tastes from mine. 

Second, I often find myself looking for something specific based on how I feel or on my needs at the time. For example, I might be looking for a vacuum cleaner that can be serviced in Hong Kong that is good for cleaning carpets in households with yet-to-be potty-trained puppies. I might be looking for a dentist who is good with kids. When my request is this specific, I do have to ask my friends or end up calling a whole bunch of places to ask them. 

Third, not all business types get reviews. I find that social establishments like restaurants and tourist locations get a lot of reviewers whereas less sociable establishments like dentists, doctors, plumbers, faucet retailers do not receive many reviews if at all. Again, for these businesses, I end up having to ask friends and family. 

Lastly, there is a lot of information out there (perhaps not for non-social businesses), and trying to sift through all of them simply is not possible for someone with very little patience like myself. I rely on others whom I trust to curate this information for me.

Well, in short, I think recommendations are more trustworthy, more suitable, more relevant and easier to get when we ask a friend for them. Sounds obvious? Yet, I can’t help but wonder in this day and age with data abound, ubiquitous access to mobile computers, artificial intelligence, and behavioral tracking software, why do we still resort to asking friends for recommendations? Why has not technology provided a solution that addresses the above issues? I guess it is not that big of an issue if you had a lot of friends who are always available to give you recommendations, but for me that unfortunately is not the case.

I started this journey of trying to solve this issue several years ago when I ordered a generous amount products from a bathroom supply retailer. I was renovating my apartment, and needed a bathtub, faucets, sinks, etc. I put a 50% downpayment and expected the products to be delivered shortly. Months went by and no delivery. I called. I went to the store. I complained and complained. Many, many times over a period of several months. The retail store staff said it is not her fault, she sent the order to the manager. The manager said it is not her fault, the brand supplier was not delivering, and so forth. (I learned a Chinese saying then which translates to “pulling a cat’s tail”.) At the end, finally after much delay in the renovation and plenty of frustration, the products were delivered. The store staff finally admitted that it was her manager who for some reason did not want to send out the products (probably for cashflow reasons).

After that experience I really wanted to give some serious feedback to the public about the store, but there is no active BBB in Hong Kong and Yelp was not widely used in Hong Kong at the time. Google Place reviews were not yet around either. I had no recourse, and that experience is how I have come up the Bumping App today. 

The Bumping App is a tool that curates recommendations from individuals with similar interests, values and lifestyle as your own, and provides them to you when you need them. I believe it addresses all the concerns I listed above about why we still ask our friends. Give it a try and let me know what you think!