"I have known no wise people who didn't read all the time — none, zero." – Charlie Munger

Contagious: Why Things Catch On

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Pennsylvania professor on what helps drive word of mouth, which can eliminate or significantly increase the effectiveness of marketing spend.  The book is well organized and has interesting examples from Berger’s research. I recently read Ogilvy on marketing and was surprised to find a very short section on word of mouth marketing in which Ogilvy notes that he has never understood what drives word of mouth (and even he was forward thinking by applying data).  It is good to see that Berger has finally conducted research on the subject.

Berger has identified 6 characteristics that increase the propensity of people to share information (STEPPS):

  • Social Currency – We share things that make us look good/feel like insiders – Rue La La
  • Triggers – Top of mind, tip of tongue – triggers in environment drive actions – KitKat and coffee campaign
  • Emotion – When we care, we share (emotions that are arousing, no sadness) – Google Paris commercial – awe is a major factor
  • Public – Built to show – putting logos on laptops that face out
  • Practical Value – News you can use – science articles are heavily shared
  • Stories – Information travels under the guise of idler chatter

Word of mouth can be a more effective form of advertising because it is more persuasive (you trust your friends) and targeted (you share things with people you know will be interested).  It is also a common misconception that word of mouth happens online – only 7% happens online based on research.  The average person has ~15 or so word of mouth experiences a day in which they discuss a company or product.

  • Introduction
    • Example of restaurant in Philadelphia that had a $100 cheesestake on the menu (Barclay Prime) – USA Today, WSJ and Discovery covered it
    • Word of month is the primary factor behind 20%-50% of all purchasing decisions
      • It is more persuasive – Friends/family are objective and candid
      • It is more targeted – the more specific it is the better and more likely to be shared – it makes you think of someone that would be interested in the product
      • Example of a publisher sending him two books, one for him and one for someone that he could share it with
    • Word of mouth does not happen online – Research by Keller Fay Group finds that only 7% of word of mouth happens online
    • Traditional word of mouth strategies were based on finding the right people – placing people in bars, etc., but more attention should be given to the message vs. the messenger
    • Example of Blendtec blenders – Started in 1999 and then released a series of videos – put golf balls, marbles, etc into the blender – got 6m views on Youtube – created a series, will it blend that received 300mm views – increased sales 700%
    • STEPPS – Social Currency, Triggers, Emotion, Public, Practical Value, Stories
  • Social Currency
    • Example – Please Don’t Tell Me – a bar in New York that has a secret passage/password to another bar – no marketing, all reservations, booked in 30 minutes
    • Sharing personal opinions activated the same brain circuits that respond to rewards like food and money
    • Three strategies to drive social currency:
      • Find inner remarkability – Snapple bottle facts – original started with jokes, but those did not do well (e.g. Kangaroos can’t walk backwards) – think of when people tell stories, they only remember the most remarkable details.
        • In study of 6.000 brands for online word of mouth and found that Facebook or Hollywood movies were talked about 2x more than Wells Fargo or Tylenol.
        • Blair Witch Project – $35K budget and grossed $250mm
      • Leverage game mechanics – frequently flier programs (started in 1981) – people don’t care about how they are doing, they are about their performance relative to others
        • Burberry photo share contest – montage of submitted photos and the picked to be on the site
      • Make people feel like insiders
        • com started in 2007, but sales were floundering and the only segment of the business that was doing well was a small loyalty club – they applied the same concept and started Rue La La – drove online flash sales only through invitation only
        • Disney uses the same concept to increase demand for old movies –stops making copies and then does special releases
        • McRib – did not perform well on initial launch, but a decade later re-released it for special time only at select franchises – it took off
  • Triggers
    • Average American takes in 16 word of mouth conversations a day – company BuzzAgent leverages a network of these people and sends products to them
    • Triggers drive discussion, but they need to occur near the source of the desired behavior
    • Interesting products do not always drive recurring discussions
    • Even negative attention can be useful if it makes products and ideas top of mind – shake weight
    • Examples of triggers
      • Mars sales increasing with NASA Mars mission
      • Using French music in a grocery store to drive sales of French wine
      • NYC anti-sugary drink campaign – man drinking a glass of fat
      • Boston Market advertisement about dinner – Thinking about dinner? Think about Boston Market
      • Polling locations at schools driving changes in votes on school policies
      • Budweiser – wassup campaign
      • Campaign for healthy eating using the word tray on it – reminded students everytime they picked up the trey
      • Youtube song about Friday – views peaked on Fridays
      • Kit-kat campaign with association with coffee
      • Changing Michelob marketing from holidays to weekends (more frequent triggers)
  • Emotion
    • Bergers team performed a study on which NYT articles were shared – education articles were more likely than sports and health more than political
      • Example was an article of a cough w/ a visual of how the air spreads
      • Positive articles were more likely to be shared than negative ones
    • Emotions drive sharing – specifically arousing emotions that drive actions – awe and anger/anxiety, but not sadness
    • Articles about science are more frequently shared because of the awe factor
    • Google ad w/ Parisian add or Apple product advertisements
    • Theory of Three Why’s – emotion is the root cause of everything
    • Funny youtube videos
      • Video of kid after dental anesthesia
      • Baby biting his brothers finger
      • United Airlines breaking a customers guitar and not paying for it
  • Public
    • Making things public creates social proof
    • Did a study on people buying cars (1.5mm purchases) – 1 out of every 8 car purchases were because of social influence
    • Examples –
      • Armstrong bands – deciding between a cross country bike race or the yellow bands – yellow bands stood out
      • Apple – deciding on putting logos on the laptop so that it is visible to others vs. the user
      • Arizona university binge drinking – put real facts about the # of people that binge drank or enjoyed it (perception was that it was much greater population)
      • Success of the Movember campaign
      • Hotmail – started the trend to include a signature with “sent with Hotmail”
      • I-phone – using white headphones
  • Practical Value
    • People pass along practical, useful information – news others can use
    • Saving money is one of the first things that comes to mind
      • Adding that something is on sale will increase sales – even at the same price
      • Low priced items – discounts in % are better while high priced the $ is more important
    • Marketing tactics on special offers to limit three per customer – communicate the value
    • Two important tips for creating useful information – its packaged in a short and consumable format and second it has a very very targeted audience
    • Examples
      • Sharing of useful information from Vanguard newsletter
      • Five ways to lose weight, 10 dating tips, etc.
  • Stories
    • Example of Lands End sending a free replacement winter coat to authors cousin and cousin sharing the story with everyone
    • Sharing stories can be combined with other sharing characteristics
    • Need to provide a psychological cover that allows people to talk about a product or idea without seeming like an advertisement
    • Dove ad showing a story of how a super model image is prepared for ads to create “Real Beauty” campaign
    • Promotion for GoldenPalace.com – person broke into Olympics and went off the board with the shirt – the story had nothing to do with the actual product, so did not drive real sales – “fool in the pool”
    • Panda (Egyptian dairy company) – panda always appears and it is very memorable and reminds people of the brand
    • When stories are shared – details are lost, but the most vivid details become more exaggerated

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"I have known no wise people who didn't read all the time — none, zero." – Charlie Munger

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