One of the most valuable -- yet underrated -- assets any company has is the wisdom and passion of its most loyal consumers. Yes, it is true that you can find a larger pool of potential customers by looking at consumers who are undecided about your brand. Companies can tap into these potential consumers by providing the appropriate tools that facilitate engagement and empower them to offer insight and contribute ideas.
At PepsiCo, we found that our consumers' social relationships serve as the foundation for our most effective marketing. Once you engage your loyal consumers to help lead the evolution of your brand or products, those consumers communicate authentically within their real-life social networks about the meaning of your brands and the reasons others should love them too. The collaboration and innovation led by consumers will lead to word-of-mouth communications, which can influence revenue and profit. In fact, a 2009 Wetpaint/Altimeter study found that businesses widely engaged in social media surpass their peers in both revenue and profit. Similarly, we know that 90 percent of consumers trust recommendations from people they know and 70 percent trust consumer opinions posted online.
Within the past year, PepsiCo has launched numerous campaigns that demonstrate how an open brand culture that empowers the most loyal consumers to make brand decisions deepens the connection between consumers and the brand. This also enhances the overall brand equity and leads to an increase in product purchases. Mountain Dew's DEWmocracy and the Pepsi Refresh Project are both strong examples of the approach and the results that follow.
Creating Meaningful Collaboration with Your Fans
Mountain Dew's DEWmocracy started with a simple question: What if we gave the power to our consumers to lead product innovation?
In 2007, we launched the first DEWmocracy campaign, giving consumers the power to create the next Mountain Dew product through the story-based innovation which was essentially a video game. It directed consumers to a destination web site and created an immersive environment where consumers developed Mountain Dew products. This campaign resulted in Mountain Dew Voltage, one of the most successful product launches in PepsiCo beverage history, new consumers being brought into the DEW franchise and massive amounts of earned of media.
As we know, the world has changed significantly since 2007, causing a critical evolution in our thinking and brand behavior. Thus, consumers not only expect to be involved in brand decisions, they want to lead. DEWmocracy 2, in response, shifted from "story-based innovation" to "consumer-led innovation."
In DEWmocracy 2, launched last year, we leveraged various social media tools to empower consumers to determine virtually every aspect of the next Mountain Dew product and lead the communications efforts relating to it. We evaluated options that would allow us to continue engaging our fans and empower them to make more key decisions on behalf of the brand. We collaborated with our fans throughout the entire product development process. By having our core fans involved in all steps of innovation using social media tools and networks like Facebook, Twitter and our own private social network, DEW Labs, as the connective tissue, we made it simple for fans to collaborate with one another and the brand. Taking it a step further, fans were also heavily involved in media planning and final media buy-ins, a first for PepsiCo.
While it's still too early in DEWmocracy 2 to see the results, we are pleased with a few early accomplishments. First, our Facebook base grew from 150,000 to more than 860,000 fans, a 500 percent increase in less than a year without any paid advertisement. Second, DEW Labs, which now has more than 4,000 members, provides an efficient way for us to reach and stay engaged with our fans. And, lastly, more than a million consumers have participated in at least one stage of the campaign. We believe that this support from consumers will lead to favorable returns in the market.
Our consumers have been actively involved in this campaign for nearly a year now, fueled solely by their passion for DEW and interest in leaving their imprint on the future of the brand. What's more, we have gained meaningful business insights into our brand and consumers that would not have surfaced during a traditional approach to product development and marketing.
Create a Culture, Not a Product-Centric Campaign
The Pepsi Refresh Project tapped into the "social relationships" of our consumers from a different perspective. Rather than focusing on how to sell the product attributes to our consumers, we looked to add value to a community or a real-life social network. To do so, we knew that we had to understand the values that connected our consumers.
We knew that our consumers wanted to play a central role in developing and promoting ideas that they believed would move the world forward. It is a group bound by the belief that we can all contribute to the betterment of our world. While DEWmocracy focused, in a sense, on the "wisdom of crowds," the Pepsi Refresh Project celebrated the power of the individual. We set aside over $20 million to fund ideas created by everyday people who want to make a positive impact on their communities.
We have generated over three million unique visitors and 16 million votes on the Pepsi Refresh Project website: www.refresheverything.com. We have opened a mutually beneficial dialogue that gives greater ownership of the Pepsi brand to our consumers. Equally important, the Pepsi Refresh Project has expanded our consumers' perception of what the Pepsi brand can be: Pepsi remains a fun brand that leads culture. However, it also has social responsibility - a sense of purpose - built into its behavior.
What's Next for Consumer Engagement?
Both DEWmocracy and the Pepsi Refresh Project offer interesting insight into the future of marketing and consumer engagement. It is moving beyond the product itself and using the brand to serve as a catalyst or facilitator within cultural groups. Whether it is unleashing the creativity among a loyal fan base or empowering consumers to express their values, the core idea remains: harness the power of your consumer base and allow them to lead in brand decision making.