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The Fascinating Psychology Behind Word-of-Mouth Marketing

At SXSW, Wharton professor and author Jonah Berger shared what 10 years of research taught him about word of mouth.
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On the second day of South by Southwest Interactive hoards of hungover techies and early birds streamed into the Hilton Austin to hear marketing expert and Wharton School professor Jonah Berger.

Berger's talk centered around something rather old school: Word of mouth.

The topic is a passionate one for Berger. Before his talk, Berger told me over coffee that he's not so sure about the of-the-moment advertising strategies often positioned as the only way business owners--especially small-business owners--can expand their brand and engage consumers. "Word of mouth is still very powerful," he added.

In a crowded conference room of about 300 people, Berger unleashed example after example of big brands that have succeeded--or failed--in generating word of mouth, and which strategies can work for you.

Why Word of Mouth

"Word of mouth is 10 times more effective than traditional ad," he said. 

Why? Because consumers don't trust ads--even ads with beloved celebrities. "When I see Joe Montana doing an ad for Sketcher Shape Up sneakers, I don't think of Sketchers, I think what's going wrong with Joe these days?" Consumers, he argued, trust their friends.

Another interesting point: He reminded the audience that, according to his research, only 7 percent of word of mouth is online. So the best way to understand word of mouth is to understand people in real-life settings.

Berger's book Contagious outlines six well-researched, data-backed reasons that people share information with other people. In his talk, Berger took a deep dive on a few.

Social Currency

Berger defines social currency as having access that, in turn, gives a person value.

He outlined this using a dive hot-dog restaurant in New York City. In the back of this well-worn, no-fuss place is a phone booth, where the rotary phone accesses the host of a swanky secret bar behind the wall. It's called Please Don't Tell.

"This place makes people feel like insiders, and when people feel like insiders, they tell their friends because they feel cool," he added.

An easy way to think about it: Parties. "Parties have the same effect," he said. "There's a list, you have to rsvp…it's access to something exclusive and the people there will share that."

What's more, consider what's happening at SXSW. "You all are tweeting about South by, and the South by brand is along for the ride."

Another way to think of social currency is through identity. Berger says that from the clothes someone buys to the car they drive, choices communicate information. A minivan, for example, says: Soccer mom.  

So for businesses, get in the mind of your consumer and understand the social implication of your product. If you understand that, you'll be more likely to succeed when coming up with a word of mouth strategy.

Triggers

One simple element of word of mouth is a trigger.

Berger used the Geico "hump day" camel ad, that features a snarky camel walking around an office asking people on a Wednesday what the day was.

"It's not a particularly clever ad, but it did really well," he said. "When I looked at the data further, there was a spike on social chatter…every Wednesday. People talked about that ad on Wednesday because they were reminded of it."

Another example is the ephemeral McRibb sandwich from McDonald's. Since consumers never know when it's coming, when it does arrive, it triggers a chain reaction that spikes the word of mouth.

In other words: If it's top of mind, it will be talked about.

 

Last updated: Mar 8, 2014

NICOLE CARTER | Staff Writer | San Francisco Bureau Chief

Nicole Carter is Inc.'s San Francisco bureau chief. She was previously an editor at New York Daily News, and her work has also appeared in Consumer Reports magazine.




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