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The Word-of-mouth promotion has become an increasingly potent force, capable of catapulting products from obscurity into runaway commercial successes. But to harness the considerable power of buzz, companies must reject five common myths. Buzz n Buzz ^ B u z z IS THE STUFF OF MARKETING LEGENDS. by Renée Dye Dark and witty Harry Potter, the trafficstopping retro Beetle, the addictive Pokémon, cuddly Beanie Babies, the hair-raising Blair Witch Project~a\\ are recent examples of blockbuster commercial successes driven by customer hype. For some reason, people like to share their experiences with one another-the restaurant where they ate lunch, the movie they saw over the weekend, the computer they just bought-and when those experiences are favorable, the recommendations can snowball, resulting in runaway success. But ask marketing managers about buzz, and many will simply shrug their shoulders. It's just serendipity, they say, or sheer luck. Renée Dye is a strategy expert in the London office of McKinsey & Company. HARVARD BUSINESS REVIEW November-December 2000 139 The Buzz on Buzz point: Viagra, one of the most talked-about prescription drugs ever, even among those who don't need it. Shrewd pharmaceutical companies are now taking a two-pronged approach to jump-start buzz among both doctors and consumers. For example, when Merck launched Fosamax, a therapy for osteoporosis, the company carefully chose scientists and physicians with high standing to conduct the clinical trials and to promote the new treatment. In addition, Merck increased the visibility of the new treatment by sponsoring symposia at international meetings. On the consumer side, the company launched a major marketing campaign in women's magazines to inform readers of the risks of osteoporosis and educate them about the value of screening and preventive treatment. Before long, the debilitating bone condition became a common topic of discussion among women and between women MYTH 1: Only outrageous or edgy and their doctors. As a result of these efforts, Merck was products are buzz-worthy. able to generate significant buzz for a previously unnch table subject. Everyone can point to a buzz-driven consumer craze that Medicine is one thing, but sometimes even the most was due in part to the sheer inanity or fringe quality of ordinary products can benefit from buzz. Remember a product-think of pet rocks or the movie The Matrix. Hush Puppies? When the company discovered that hip Yet according to our analysis, a surprisingly large portion New York City kids were snapping up vintage pairs of of the U.S. economy-a shade above two-thirds - has its shoes at secondhand stores, it rushed into action. been at least partially affected by buzz. (See "What Buzz It began making its shoes in shades like Affects" for an industry-by-industry Day-Glo orange, red, green, and purple. breakdown.) Obviously, buzz greatly W H A T BUZZ AFFECTS* Next, it sent free samples to celebrities, affects the entertainment and fashion Slightly more than two-thirds of and not long after, David Bowie and industries, but it also influences agriculthe U.S. economy has been Susan Sarandon were spotted wearinfluenced by buzz. ture, electronics, and flnance. Indeed, ing them. Then the company tightly few industries are immune these days, 54% controlled distribution, limiting the partially because of technological innoshoes to a handful of fashionable outvations like the Internet that enable lets. Soon high-end retailers like Saks, customers to spread buzz quickly. Bergdorf Goodman, and Barneys were Consider the pharmaceutical 13% begging for them. In just three years, industry, which has recently from 1994 to 1996, Hush Puppies saw witnessed a dramatic increase in its annual sales of pups in the power of buzz. In the past, pharNorth America skyrocket maceutical companies marketed new 13% Largely Driven by Buzz Toys, sporting goods, motion from fewer than 100,000 prescription drugs primarily through pictures, broadcasting, amusement pairs to an estimated a direct sales force that distributed eduand recreation services, fashion 1.5 million. cational materials and free samples Of course. to physicians. Consumers were rarely 54% Partially Driven by Buzz aware of new therapies except as preFinance (investment products), not every product is a hotels and lodging, electronics, scribed by their doctors. good candidate for buzz printing and publishing, tobacco, Today, thanks to extensive advertising marketing. How, then, can automotive, Pharmaceuticals and the Internet, consumers have access managers assess buzz-worthiness? and health care, transportation, agriculture, food and drink to health-care information on a scale Two criteria make it possible. undreamed of just ten years ago. InFirst, products ripe for buzz are 33% Largely Immune to Buzz deed, a revolution is under way, transunique in some respect, be it in look, Oil, gas, chemicals, railroads, forming people from passive to active functionality, ease of use, efficacy, or insurance, utilities participants. In choosing their treatprice. For Chrysler's PT Cruiser, the 'McKinsey & Company estimate for 1994 ments, such active consumers can-and degree of difference from the competiU.S. economy (total equals 16 triilionl do-generate and spread buzz. Case in tion clearly lies in its retro, gangster-era My research suggests otherwise. Investigating the marketing practices at more than 50 companies, my colleagues and 1 at McKinsey have found that buzza phenomenon we've dubbed "explosive self-generating demand" -is hardly a random force of nature. Instead, it evolves according to some basic principles. My research shows that companies can predict the spread of buzz by analyzing how different groups of customers interact and influence one another. Many executives have little idea how to orchestrate a marketing campaign that exploits the full power of customer word of mouth. Instead, they remain enslaved to five common misconceptions about the phenomenon. Before companies can reap the total benefits of buzz, they must understand the principles of how it works, and doing so requires a close examination of thosefivemyths. 140 HARVARD BUSINESS REVIEW November-December 2000 The Buzz on Buzz managers have a portfolio of marketing ALL CUSTOMERS look. In the case of collapsible scooters, tactics from which they assemble just the ARE NOT CREATED the key buzz-worthy factors are functionright sequence to generate and sustain ality and ease of use: what other product EQUAL. SOME-THE buzz. Here are some of the most powerful allows people to dash from place to place VANGUARD - HAVE A tactics we've identified from our research. on a lightweight, folding device? DISPROPORTIONATE Seed the vanguard. All customers are Second, products with great buzz potenABILITY TO SHAPE not created equal. Some-the vanguardtial are usually highly visible. For many have a disproportionate ability to shape PUBLIC OPINION. products, that condition is a no-brainer. public opinion. Increasingly, managers are The popularity of fashion accessories, like recognizing that getting their products Gucci's baguette bags, tends to spread into the hands of the vanguard can pay Üke wildfire because they are easily seen by off exponentially in how the mass market others. Every time someone in a meeting ultimately responds. Abercrombie & Fitch, pulls out a Palm device to jot a note, the for example, recruits college students from popular company gets another endorsement of its popular PDA. fraternities and sororities to work in its stores, knowBut insightful companies have discovered that products ing that they will then probably wear A&F clothes can be made visible. One way is to create forums, such as more frequently and, in doing so, implicitly endorse Internet chat groups, where customers can exchange the fashions. information about a product-such as a new medical Ration suppiy. People often want what they-or othtreatment-that might otherwise have remained hidden. ers-can't have. The luxury-goods industry has long Often, creative approaches are needed to facilitate the exploited this tendency, and today other companies are discussion. Pfizer, the maker of Viagra, faced an uphill increasingly using it to their advantage. battle when trying to generate buzz for its breakthrough Walt Disney has excelled at maintaining high demand drug, because impotence was a taboo subject But by popand buzz for its animated films by carefully controlling ularizing the medical terms "erectile dysfunction" and "ED," the company transformed the undiscussable into their availability on video. The "Disappearing Classics" campaign of 1991 announced that the company would fodder for the bedroom and backyard alike. retire certain videos, allowing consumers just a limited time to purchase them. Films subsequently brought out M Y T H 1 : Buzz just happens. of retirement were being re-released in theaters. Previous experience with this campaign led Disney to proMany people believe that buzz is largely serendipitous. ject in 1995 that video sales for some films could surge Not so. We have found that buzz is increasingly the by as much as 400%. result of carefully managed marketing programs. Savvy THE 5 MYTHS OF BUZZ THE MYTH... ...THE REALITY Only outrageous or edgy products are buzz-worthy. The most unlikely products, like prescription drugs, can generate tremendous buzz. Buzz is increasingly the result of shrewd marketing tactics in which companies seed a vanguard group, ration supplies, use celebrities to generate buzz, leverage the power of lists, and initiate grassroots marketing. 2 Buzz just happens. 3 The best buzz-starters are your best customers. Often, a counterculture has a greater ability to start buzz. A To profit from buzz.you must act first and fast. Copycat companies can reap substantial profits if they know when to jump in-and when not to. Q The media and advertising are needed to create buzz. When used either too early or too much, the media and advertising can squelch buzz before it ignites. .. 142 M II 1 II ' " - 1 HARVARD BUSINESS REVIEW November-December 2000 The Buzz on Buzz Volkswagen took this tactic one step further in marketing its retro Beetle. A year after the car's introduction, the company offered Internet-only sales in two new colors, "vapor blue" and "reflex yellow," with exactly 2,000 cars available in each. This attention-grabbing maneuver triggered its own share of buzz and ignited an additional round of publicity for the already popular cars. Within two weeks, consumers had quickly snapped up half of the limitededition models. Exploit kons to beget buzz. Another tactic that companies use to trigger buzz is celebrity endorsement. Thanks to ad campaigns featuring icons hke Michael Jordan and Tiger Woods, Nike has built its brand into a marketing juggernaut Advertising, however, is merely one way to leverage the power of icons. Tickle Me Elmo became the best-selling toy of the 1996 Christmas season in the United States after Rosie O'Donneil played with the doll on her daytime talk show. A public relations agency had cleverly engineered ~~ this runaway success by sending an Elmo to O'Donnell's son. Literary publicists eagerly lobby staffers at Harpo, knowing that many books Oprah Winfrey selects for her book club pole-vault onto the New York Times best-seller list Movies and television shows can also serve as powerWorld Report can dramatically increase or decrease the ful endorsers. During the funeral scene in the hit film number of applications to a given institution. Four Weddings and a Funeral, one of the characters reads Some companies have begun to leverage lists in "Stop All the Clocks," a poem by W.H. Auden. After the creative ways. In 1998, Modern Library, an imprint of film opened. Vintage Books adroitly published a slenRandom House, surveyed its editorial board to compile der volume containing the poem and other Auden a list of the top loo novels of the twentieth century. The poems, which sold 50,000 copies in three years. (Most selections, which the company publicized on its Web poetry books sell around 500 copies.) It's no wonder comsite, became the focus of much animated discussion, in panies have been aggressively seeking, and sometimes part because of a spat between the editorial board and paying huge sums for, key product placements. Luck the publisher over the process used to compile the list. had little to do with the appearance of Within five months, more than 1,000 artia BMW Z3 Roadster in the James Bond fiick cles and editorials had appeared about GoldenBye or the prominence of an Apple the controversial Ust Even more remarklaptop computer in Mission Impossible. able, though, was that within weeks ofthe Tap the power of lists. Lists are potent list's publication, four of the top five novLUCK HAD LITTLE TO tools for creating buzz because they're els made their way on to Amazon.com's DO WITH THE effective road signs for informationweekly list of paperback best-sellers, with APPEARANCE OF A besieged consumers who don't know James Joyce's Ulysses having pride of place where to focus their attention. Perhaps no at number 2! Of course. Modern Library BMWZ3 ROADSTER one knows this better than movie execuwasn't the only imprint to benefit from IN THE JAMES BOND tives, who hold their collective breath this buzz-any publisher with editions FLICK COLDENEYE OR every Monday morning, waiting for the of the selected books experienced an THE PROMINENCE OF weekend box-office rankings that can upsurge in sales. But Modern Library reAN APPLE LAPTOP either make or break new releases. Even in ceived a tremendous amount of free pubthe world of ivory towers, the annual lists COMPUTER IN licity, and traffic at its Web site surged by of colleges and universities by U.S. News & MISSION IMPOSSIBLE. a jaw-dropping 7,000%. HARVARD BUSINESS REVIEW November-December 2000 The Buzz on Buzz Nurture the grass roots. Thefinalbuzz tactic focuses on establishing and extending product loyalty throughout a community. At first, this tactic might sound similar to seeding the vanguard, but there is a critical difference. Members of the vanguard typically delight in being the first to know about a product; they revel in this exclusivity. When other people begin to adopt the product, the vanguard often moves on to the next big, exclusive thing, in contrast, a grassroots strategy relies on early adopters who try to convert other people-to turn them into users, too. With many new drug therapies, for instance, early patients who've been successfully treated wish for others to benefit. Users of network services like America Online try to recruit others because the usefulness ofthe service grows with the number of members. Or perhaps consumers identify so deeply with a brand that they want others to become a part of that community. A powerful example of buzz nurtured at the grassroots level is the marketing campaign that HarleyDavidson used in its remarkahle turnaround. In 1981, the motorcycle manufacturer was nearly bankrupt as Japanese competitors with superior quality and lower costs had demolished what was once a thriving U.S. industry. But the 13 executives who bought Harley from parent AMF believed they could save the company by tapping into the fervent loyalty of its customers; for FINDINCTHE BUZZ-STARTERS ome customers shape public opinion more than others. To identify these buzz-starters, companies can try a process made up of four questions: S Research Methods A, How would we group our customers based on their purchasing behaviors? • Marketing and industry data ' Information from trend spotters 'Observation of customers ' Customer panels and interviews B. How do these groups influence one another's purchasing of our products? ' Observation of customers • Customer interviews C. What are the potential paths for buzz to spread between different customer groups? ' Simulations that show the flow of information from one group to another D. Which path is the strongest, and which group starts the buzz? • Interviews of customer groups to determine their propensity to adopt and recommend the product 144 A CRASSROOTS STRATEGY RELIES ON EARLY ADOPTERS W H O TRY TO CONVERT OTHER PEOPLE - T O TURN T H E M INTO USERS, TOO. them, Harley-Davidson was not just a motorcycle but an identity. In 1983, the company established and sponsored the Harley Owners Group, or HOG, with numerous regional chapters around the United States. Strapped for cash, Harley used inexpensive buzz marketing techniques-newsletters and posters-to publicize HOG via the dealer network. More important, though, Harley relied on extensive word of mouth generated within these communities. HOG quickly grew in strength, sponsoring hundreds of rallies that drew Hariey owners from across the country. Today, more than 350,000 owners belong to nearly i,ooo chapters around the world. All of these tactics won't be relevant for every product. Depending on a product's characteristics, managers must decide which tactics to deploy and in what order. In general, seeding the vanguard and rationing the supply are usedfirstto foster a sense of exclusivity, while using icons might come later in a mass-marketing campaign. Consider the sequencing that Ty shrewdly used to touch off a national mania for its rather unremarkable bean-stuffed toys. Initially, Beanie Babies were available only through specialty toy retailers (supply rationing) that catered to upper-income families. Children from those households (the vanguard) took the first Beanie Babies to school, generating demand among other kids. Then ly broadened the distribution by teaming with McDonald's (an icon) to give the toys away in Happy Meals. The craze intensified as the media ran stories of families buying dozens of meals and throwing out the food because they just wanted the toys. Meanwhile, Ty regularly retired some models from production (supply rationing), resulting in their selling for several thousand dollars on secondary markets. Eventually, adults, many without children, became fanatic purchasers, accumulating hundreds in their collections. The best buzz-starters are your best customers. In order to spark buzz, marketing managers often turn first to the opinion leaders from within the community that will eventually become the bulk ofthe market. But that can be a crucial mistake. The best vanguard for a product may not be immediately obvious. It may even come from a counterculture. Take Tommy Hilfiger. The designer focused on young, urban African-Americans to imprint his brand with a street hipness. It worked. The popularity of Hilfiger clothes quickly spread from the inner city to the suburbs, HARVARD BUSINESS REVIEW November-EJecember 2OO0 The Buzz on Buzz reaching a broad audience of all ethnicities. Similarly, when the marketers of Absolut vodka wanted to spark buzz for its then lower-end no-name alcohol, they did not target married middle-aged males in the suburbs. Instead, they initially focused on the gay community in San Francisco. Buzz rapidly diffused outward and, combined with a funky, award-winning marketing campaign, helped catapult Absolut to the enviable position of topselling vodka in the United States. Finding such unexpected vanguards is nearly impossible with marketing data that concentrate solely on what individual consumers think about a product-and not on how consumers influence one another about the product. Marketing researchers are thus developing new methodologies to account for customer-to-customer interactions. An obvious approach is to track the path of buzz for a similar product that was successful and then seek to replicate that pattern. More sophisticated techniques attempt to model how consumers interact with one another and how highly they value others as sources of information or as behavioral models. (For details of such an approach, see "Finding the Buzz-Starters.") icons like Quentin Tarantino and Drew Barrymore wearing Hard Candy. The buzz then reached near-excruciating decibel levels when actress Alicia Silverstone gushed about her sky-blue polish to David Letterman on national television. In three years. Hard Candy sales hit an estimated $30 million. The major cosmetics companies, such as Fstée Lauder and Lancôme, didn't just sit there. Many moved quickly to launch their own lines of funky-colored nail polish. But only after the craze became firmly entrenched did Revlon, the cosmetics mass-marketer, launch its StreetWear line. Did Revlon miss the boat? In a word, no. Companies with established midmarket or downstream brands and large, loyal customer bases often have very good reasons for waiting until a trend is flrmly established before building it into their product portfolios. Without having to invest time or money in product development, a copycat company can enjoy the rewards of buzz as a late participant-provided it knows when to enter the market and can do so quickly before the trend has faded. In its early days, the Limited could copy a fashion design from the runway, manufacture knockoff products, and distribute them to company stores in MYTH 4: To profit from buzz, just 30 days. you must act first and fast. Yet most companies don't have the right systems or Trendsetting companies may generate buzz, but copycat processes in place to successfully follow trendsetters. firms can also reap tremendous benefits. The cosmetics By the time buzz works its way up a traditional marketindustry provides insight into how trendsetting compaing department, the trend may already be dead. To be nies and their followers can create value for themselves. successful, fast followers and mass-market adapters Consider funky-colored nail polish, a buzz-created must develop an alternative set of practices for tuning in product if ever there was one. The rise to glory began to buzz. Teen People, for instance, keeps a group of 4,otxi when Dinah Mohajer, then a college student, wanted "trend spotters" on call. The magazine encourages them to paint her toenails to match her strappy blue sandals. to submit story ideas and respond to published articles. So she did what any budding entrepreneur would: she In addition, it invites them monthly into regional offices mixed some polish herself. to discuss what's cool and, equally important, what's not Mohajer's homemade concoction created such a stir Manufacturing and retailing companies commonly on the University of Southern California campus that she employ "cool hunters," individuals who specialize in and her boyfriend soon found themselves in business, knowing what's in vogue. The cool hunter for urban mixing batches in her bathtub and wearing gas masks retailer Wet Seals routinely attends runway shows, scouts for protection from the noxious fumes. competitors' stores, reads popular magaTo distribute their product, dubbed Hard zines, watches hit television shows, listens Candy, they selected exclusive clothing WITHOUT HAVINO to popular music, and interviews kids boutique Fred Segal in upscale Beverly on the street in different international TO INVEST TIME OR Hills as their flrst outlet and then exmetropolises. MONEY IN PRODUCT panded to other trendy local salons. DurAnother provocative and powerful DEVELOPMENT, A ing this time, demand was solely driven by buzz-spotting medium is the Internet. COPYCAT COMPANY word-of-mouth hype among chic urban Many companies have discovered that by CAN ENJOY THE clientele (that is, the vanguard). setting up chat sites like Gurl.com, they Hard Candy was gradually introduced REWARDS OF BUZZ AS can establish an efficient and economical into additional exclusive salons and stores, main line into what consumers are thinkA LATE PARTICIPANT. eventually becoming available in high-end ing. These Web sites can function as chains such as Nordstrom and Neiman virtual focus groups operating in nearMarcus. Publicity for the product surged continual session, enabling companies as the paparazzi photographed Hollywood to track consumer buzz as it develops. HARVARD BUSINESS REVIEW November-December 2000 145 The Buzz on Buzz With such methods, copycat firms can strike while the market is just heating up, not while a trend has already begun to cool. M Y T H 5: The media and advertising are needed to create buzz. while the media and advertising can help fan the flames of buzz, involving them too early can undermine buzz. Indeed, the vanguard will often reject a heavily promoted product that it otherwise would have embraced merely because of overexposure. Buzz-hungry companies need to refocus their marketing lenses on consumer-to-consumer communicationsbe they verbal, visual, or digital. That's where buzz is bom. In other words, to generate buzz, the objective is not to besiege consumers with advertising but to somehow encourage them to talk about a product or to use that product so that it's noticed by other people. The founders of Hotmail, the free e-mail service, keenly understood this principle. The start-up company made its customers its most potent marketing force by appending a soft-sell line-"Get your free e-mail at Hotmail" -to every outgoing e-mail from one of its users. In its first 18 months of business, Hotmail signed up 12 million people. (In comparison, AOL took more than six years to amass that many customers.) Yet the company spent a meager $500,000 on advertising during that period. By contrast, Hotmail advertisements with "Free e-mail" buttons on highly trafficked Web sites produced dwarfish response rates, suggesting that the company's remarkable success owed more to the marketing strategy of active messaging than to the free nature ofthe service itself, Today Hotmail, now owned by Microsoft, claims to have more than 80 million registered users. But such programs, dubbed viral marketing, can also be dangerous, because consumers may feel that they are being exploited or are themselves taking advantage of others. Some companies have offered cash to people to provide the names and e-mail addresses of their friends and relatives, who would then have the same opportunity for financial gain in enlisting others. When such techniques smack of pyramid schemes, they are more likely to offend rather than entice. The Future of Buzz Globalization continues to expand the universe of trends and trendsetters and to make buzz ever more exportable across borders. Consider that the three hottest children's crazes in the United States today-Pokémon, Harry Potter, and Teletubbies-are imports from Japan or the United Kingdom. Advancements in mobile telephony, PC networking, and communications bandwidth will facilitate the creation of forums where buzz can fiour146 BUZZ-HUNORY COMPANIES NEED TO REFOCUS THEIR MARKETING LENSES ON CONSUMER-TO-CONSUMER COMMUNICATIONS-BE THEY VERBAL, VISUAL, OR DIGITAL. THATS WHERE BUZZ IS BORN. ish unconstrained by geography. And the continued proliferation of brands will encourage people's close associations with them, thus furthering buzz potential. Finally, rising disposable incomes worldwide will enable a wider participation in hype phenomena. All these factors point toward a world in which buzz will dominate the shaping of markets. In fact, the phenomenon of buzz is already becoming an industry unto itself Dot-com companies like Epinions.com have built their entire businesses and Web sites around customer word of mouth: consumers rate and review products, and the results are tallied for prospective shoppers to view. Such forums, as well as the past successes of buzz marketing, are themselves generating buzz about the growing power of customer hype. Indeed, companies that are unable to control buzz may soon find that the phenomenon is increasingly controlling them. ^ Reprint ROO6O6 TO orderreprints,see the last page of this issue. Join HBR's authors and readers in the HBR Forum at www.hbr.org/tbrum to discuss this article. 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