One of Estée Lauder's favorite sayings was “Tell-a-phone, tell-a-graph, tell-a-woman,” based on her strong belief that once a woman tried and liked a product, she'd share it with friends.
This conviction led Mrs. Lauder to pioneer the “free gift with purchase” tactic so popular in cosmetics marketing to this day. And it also shows she would have been a strong believer in the social media strategy her namesake corporation is employing today.
Today the Estée Lauder Companies — with a diverse portfolio of 28 premium beauty brands including Clinique, Aramis, Bobbi Brown, M*A*C, Aveda, Origins and Prescriptives — is using customer reviews and word of mouth to let women “tell” their friends about its products online. The reviews are building brand presence and ROI.
“We were tentative in the beginning about reviews — it was tough to allow consumers into the tended garden of our website,” admits Marisa Thalberg, vice president of global digital marketing for Estée Lauder. “But there is a correlation between customers who write and read reviews to those who buy.”
Like many brands, Estée Lauder is faced with the challenge of connecting with an increasingly distracted consumer. “We've never been in an age with this much fragmentation of attention,” she says. “And media consumption is exponential to what it was 10, 20, 30 years ago.”
Thalberg has been with Estée Lauder for a little over four years, and in advertising and marketing for almost her entire career. A good chunk of that has been in the beauty niche, including experience on the agency side working with Clairol, and on the client side at Revlon and Unilever.
A blessing in cosmetics and fashion is that women are so highly engaged with the topic. “It's a wonderful advantage, but our competitors are in the same situation,” notes Thalberg. “So how do we cut through that happy clutter of marketing opportunity?”
“Brands are hungry to encourage as much participation as possible by consumers — they understand the value of data straight from the customer's mouth,” says Brant Barton, co-founder and chief innovation officer of Bazaarvoice, which works with Estée Lauder to develop its social strategy. “Many companies are seeing it as a competitive advantage.”
Still, many luxury brands of Estée Lauder's ilk have been slower to adapt to the concept of consumer reviews. Why? Luxury has always been a more “curated” product experience, a situation Barton doesn't blame solely on the brands.
“That is what consumers have long expected, because they're not paying only for the value of the product but the status it confers,” he says.
Of course, consumers who covet luxury brands buy more than the general population, and not only buy online but research those purchases on the web, notes Barton. “And the same theories they'd apply to an electronics product, they apply to a luxury product.”
Online word of mouth marketing is a particular sweet spot for Estée Lauder because the brand hits three key areas — women, luxury and fashion — that all index highly for social media, says Barton. “And relative to many of their peers, they're willing to take risks, because they're ultimately very confident in their brand.”
And Estée Lauder has reason to be confident in its brands. For the first nine months of fiscal 2011, the company reported net sales of $6.75 billion, a 13% increase from $5.96 billion in the comparable prior-year period, and net earnings of $659.7 million, a 45% increase. Estée Lauder shares on the New York Stock Exchange hit a 52-week high in July, at $107.12.
While each of Estée Lauder's many brands is marketed independently from the others, there is crossover. “We do have brand loyalists, but particularly with social media, consumers are more aware of [the connections in the company's] portfolio,” Thalberg notes. And of course, because beauty is so driven by news and trends, one customer might be loyal to Aveda for hair, but swear by Clinique skin products or M*A*C lip color.
The brands that do well with word of mouth marketing, such as reviews, create an environment that the consumer perceives as authentic, says Barton. “And that can be scary — but you need to be impartial. Even if a review is critical of the product, it should be out there.”
Marketers also need to remember that word of mouth isn't just a marketing tool, but also something you can turn into business intelligence and research to understand how to build and deliver new products.
“A consumer's willingness to make a recommendation, even if it is anonymous, still has them putting themselves on the line,” says Barton. “We put a lot of stock in the altruistic intent that consumers have when they review products, both positively and negatively.”
A negative review can be useful for the brand, Thalberg notes. For example, a negative review about a shampoo may explain to potential users why it isn't right for a certain hair type. “They can be very directional for consumers and even show the strength of certain products,” she says.
Reviewers for Estée sites like Clinique and Aveda create profiles of themselves, to help give readers an indication of whether the person talking about the product shares their needs. They can give their location, skin concerns/type, hair type, how long they've been using the brand, and offer whether they're a customer or a stylist using the product professionally.
Reviews are occasionally rejected, but for reasons such as inappropriate language rather than content. A quick look on some of the brand sites — as well as those of multi-brand beauty e-tailers like Sephora — shows that women are indeed not shy about saying what they think about beauty products.
For example, a search for Clinique's Chubby Stick lip colour balm, introduced this spring, showed 195 reviews (165 positive), while a whopping 453 reviews, with an average rating of 4.3 out of five stars, popped up on Sephora.
The next step for many firms in digital word of mouth will be managing the sheer volume of reviews and content being generated, especially in categories like cosmetics, says Barton. “We need to discover how to deliver more personalized content and get more savvy on how we customize the experience on-site for users.”
A Put-Together Style
Bazaarvoice supports 10 of Estée Lauder's brands across 35 of its websites globally. One of the things that is unique about the company is the way it has an integrated approach to social and word of mouth, says Barton.
“You need to realize that this isn't something you need to quarantine to your website,” he explains. “You need to roll it out to your stores and print promotions, to help support shopping decisions, and then measure the impact through the entire value chain.”
That word of mouth extends offline as well — Estée Lauder's Origins brand, for example, repurposes reviews into point of sale material to lend authenticity to its promotions.
While the majority of Estée Lauder's business is still at brick-and-mortar retail, the company uses the Internet as both a traffic driver and a sales channel. Many “hot” products often sell out quickly at retail, so shopping online gives women access to products they wouldn't get to try otherwise. “It maximizes her ability to choose,” says Thalberg.
One interesting example of this was the “Pink Friday” M*A*C lipstick created in collaboration with hip-hop singer Nicki Minaj. The shade was sold exclusively online for four Fridays in November 2010. The first batch of the color sold out in 12 minutes after Minaj tweeted about it. The second week it was gone in eight minutes.
“I wouldn't really call it a ‘flash’ sale,” says Thalberg of the promotion, which coincided with the release of a new album by the singer. “It's more about ways to surprise and reward the consumer, and reach them with a product quickly.”
A Pretty Halo
Every brand has at least one person dedicated to social media, with their work supplemented by customer service reps. “Engaging the community is one skill set, while responding to customer services is another,” Thalberg notes. “We want to tap people in the right way to address customers' needs.”
Some brands have one global page, with fans around the world, while others coordinate more in their local markets. “Finding the right combination is a challenge,” she says. “You need to be focused on the overall brand strategy and how it translates to social.”
Mobile is also a part of the way Estée Lauder's brands are connecting social with consumers. Clinique, for example, introduced an app this spring called “Clinique Forecast,” offering skin care tips (with product recommendations and store locator information based on real time information about weather and pollution in a user's area. The flagship Estée Lauder brand debuted a similar app in the spring to showcase its CyberWhite skincare line. (For more on M*A*C's mobile email creative, see page 56.)
Obviously, different brands address the social channels in different ways, depending on their demographic target. While in most cases a consumer might follow a brand, because M*A*C is an artist driven brand, live chats with make-up artists are regularly featured on the M*A*C Facebook page (over 2.1 million fans at press time). And over 30 well-known make-up artists tweet for the brand, allowing aficionados to follow the artist they're most interested in. M*A*C also created a microsite, macartisttweets.com, to showcase the artists' tweets from events of interest to beauty mavens, like Fashion Week.
“We wanted it to be a great experience for the consumer, and it gives the brand a real role in Fashion Week by giving behind-the-scenes content,” Thalberg says. “It's not so much about ROI but building relationships. And it had a great halo effect for the brand.”