Just as people use money to buy products or services, they use social currency to achieve desired positive impressions | Outlook Business
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Interview

"Just as people use money to buy products or services, they use social currency to achieve desired positive impressions"
Jonah Berger, professor at the Wharton School, on why social influence matters in marketing

N Mahalakshmi & Rajesh Padmashali

What were the key takeaways as you were doing the background research for Contagious?
The biggest one would be that “Self-sharing” follows us throughout our lives. We tell friends about our new clothing purchases and shows family members the op-ed piece we’re sending to the local newspaper. This desire to share our thoughts, opinions, and experience is one reason social media and online social networks have become so popular. People blog about their preferences, post Facebook status updates about what they ate for lunch, and tweet about why they hate the current government. 

As many observers have commented, today’s social-network-addicted people can’t seem to stop sharing — what they think, like, and want — with everyone, all the time. So, why do people talk so much about their own attitudes and experiences? It’s more than just vanity; we’re actually wired to find it pleasurable. Harvard neuroscientists, Jason Mitchell, and Diana Tamir, found that disclosing information about oneself is intrinsically rewarding.

Just as people use money to buy products or services, they use social currency to achieve desired positive impressions among their families, friends, and colleagues. So to get people talking, companies and organisations need to mint social currency. Give people a way to make themselves look good while promoting their products and ideas along the way.

What then is the biggest challenge for marketers in their attempt to win wallet share in the digital age?
I think the challenge is they focus too much on the technology and not enough on the psychology. People think it is about being on certain digital channels or using certain social media channels. If you actually look at the data, only about 7% of word of mouth is online; most word of mouth is offline. We tend to overestimate online word of mouth because it’s easier to see. Social media sites provide a handy record of all the clips, comments, and other content we share online. So when we look at it, it seems like a lot. But we don’t think as much about all the offline conversations we had over that same time period because we can’t easily see them.

So it is really easy to chase fads but it is a lot hard to understand why people do what they do and you need that to drive your marketing plan and behaviour. There are certain things that you can do digitally that you can’t do otherwise. Even though it is only a small portion overall, word of mouth, for example, spreads faster online, whereas offline word of mouth tends to be geographically located. Online is great when your stores are closed or for customers who might not be living near stores as it gives them an opportunity to interact with the brand. 

When is it that digital is more effective compared with offline?
Take Costco for example, Costco sells most things offline. Most customers are used to interacting with Costco online but that is maybe when they don’t want to go to the store or want something shipped home. A lot of times people don’t want to make the trip to big box retail when they only need one thing. Digital may be an opportunity for Costco to interact with customers who may not be able to make it to a store as it is not close by or may not feel like making a trip. So, it is not if digital is useful for everything all the time, it is about what specific situation you are in. 

Imagine a mattress company, for example. Can a mattress be sold online? You may say No because people need to try a mattress. Well, I might say, hold on. But if we send it to them and if we give people a 100-day trial, they can experience the mattress and may not need a physical store. We may think we can do anything online that we can do offline, but you need to ask why it is useful. How can you save money by doing things online than offline? Why would it be more convenient for customers to choose online than offline? Are there situations where the customer wants something offline? Thinking about when the channels are useful than just assuming they are, makes strategy more effective.

Would you say the basic principles of influence are the same?
We often underestimate how much other people influence our choice or decision making. In one of the chapters of Invisible Influence, we talk about what makes negotiators more successful. Researchers analysed hundreds of negotiations and found one simple trick that makes some negotiators 5x more successful and likely to reach an outcome and that simple trick was mimicking or mirroring their negotiating partner. If their partner leaned back in their chair, they did the same, their partners crossed their arms, they did the same, not obviously mimicking them all the time but subtly, almost unobtrusively mimicking, their language, their behaviour, their non-verbals. The key insight here is not just listen, emulate. Obviously subtly mirroring or mimicking the behaviour of others can lead to influence or greater success.

The same thing happens in a sales context. As a diner, you leave a 70% higher tip if your waiter or waitress says what you ordered word for word. The reason is that mimicry leads to liking and affiliation and makes people feel like that they are part of the same team or part of a larger tribe which makes them trust and like others more. The Budweiser Wassup commercials used that trigger to good effect. “Wassup” was a popular greeting among young men at the time. Just greeting friends triggered thoughts of Budweiser in Budweiser’s prime demographic.

When should marketers embrace and when should they resist social influence?
Marketers should embrace social influence all the time, it is a powerful tool to get new customers, and turn existing customers into advocates. But just like any other tool, you have to understand how to use it. Marketers who effectively use social influence save a lot of money on advertising. When I work with my clients, I ask them why they spend any money on adverting. Most ads are ineffective, they are somewhat good on raising awareness but they are not good at changing behaviour. Part of the reason is that people don’t trust ads, they know ads are trying to convince them; they trust their friends and colleagues because their friends and colleagues are honest with them. Thinking more about influence and word of mouth rather than traditional advertising is a great way to save money and increase your return on wallet.

Hotmail was a product which scored well on a number of the word of mouth drivers we’ve talked about so far. At that time, it was quite remarkable to be able to access e-mail from anywhere. So early adopters liked talking about it because it gave them Social Currency. The product also offered users significant benefits over other e-mail services (for starters, it was free!), so many people shared it for its Practical Value. But the creators of Hotmail did more than just create a great product. They also cleverly leveraged observability to help their product catch on. Every e-mail sent from a Hotmail account was like a short plug for the growing brand. At the bottom was a message and link that simply said “Get Your Private, Free E-mail from Hotmail at www.hotmail.com.” 

Every time current Hotmail customers sent an e-mail, they also sent prospective customers a bit of social proof — an implicit endorsement for this previously unknown service. And it worked. In a little over a year Hotmail signed up more than 8.5 million subscribers. Soon after, Microsoft bought the burgeoning service for $400 million. Since then, more than 350 million users signed up by Apple and BlackBerry have adopted the same strategy. The signature lines at the bottom of their emails often say “Sent using BlackBerry” or “Sent from my iPhone.” Users can easily change this default message but most people don’t, in part because they like the Social Currency the notes provide. And by leaving these notes on their e-mail, people also help spread awareness about the brand and influence others to try it.

Do you believe word of mouth is a much bigger weapon in the digital world?
What is interesting is that word of mouth has been around for a thousand years. It wasn’t invented when the internet came around. What social media has allowed marketers is to see that conversation. Before that they just couldn’t see them. Having figured out why someone already likes a product, they are amplifying what has already occurred. It is like using a megaphone to reach out to more people.  

The challenge of word of mouth is being authentic. Companies are used to talking in terms of advertising. They don’t want to let go of their messages, they want to control everything that is being said about their brand. Even if you are not doing word of mouth marketing, it does not mean that nobody is saying anything about you, just that you don’t realise what they are saying about you. 

Does viral have a shorter limited shelf life? If so, what are the implications for marketers?
I don’t think marketers should have a goal of making something go viral. Viral is often a flash in the pan, here today, gone tomorrow. Companies want enduring value for their brand and so the goal should be how we can get each one to reach one and use customers in all aspects of our marketing mix to generate that word of mouth. One offline customer having a conversation may not be as sexy as saying our viral video had 10 million views but it is equally, if not more, important. The ground game of one customer talking to another should have the bulk of a marketer’s attention.

This is the second of a two-part series. You can read part one here.

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