Social capital marketing (word of mouth)

Cordelia Fine and Paul Harrison  writing for the Australian in “Word of mouth marketing can leave behind a sour taste” (5/16/07) note that companies use of the “just like you” personality in marketing reflects their understanding of social capital, since they trick us into thinking that a friend just like us really is recommending a product.

Sometimes they are. Some companies actually get friends to sell the product.  MCI’s Friends and Family program encouraged people using MCI to convince their friends and familiy to join so they’d have cheaper calls to these new MCI members. “One baby-care company offers a modest product voucher as an incentive for so-called ambassadors, who act as middlemen for targeted marketing to their friends (whose contact details they helpfully provide to the company).” (Fine/Harrison)  They also note that … gives discounts to those who bring in new customers.

Some companies take an ever fuller approach, getting citizens to become their marketers and salesforce and sell through home parties.  In the U.S., Amway or Tupperware are prime examples.     Fine and Harrison write: “Marketers are well aware that friends implicitly trust each other to return favours. As the clever minds behind ‘party plan selling’ so profitably realised, reciprocity between friends is a reliable tool. When a friend invites you to a Tupperware party, you sit on her sofa, drink her tea and eat her cake. Place yourself under this obligation and you are all but guaranteed to leave poorer than you arrived.” We believe these friends’ recommendations because we assume (incorrectly in the case of Amway distributors, for instance) that their recommendations are motivated more by our interests than their self-interest.

Other companies recruit “buzz agents” to test free samples and to recommend (“buzz”) products to their friends. Almost half of Fortune 500 companies use agents and Fine/Harrison note that they “‘build social capital by being in the know and always having something to talk about’, as one US company puts it.”  In some cases they apparently know no bounds. A buzz agent tried to hype an eye gel called No Puffery at her grandfather’s wake [according to Rob Walker, “Hidden (in plain sight) Persuaders” in The New York Times].  A relative at the wake noted how well the bereaved granddaughter was looking, and the buzz agent launched into buzz mode: “No Puffery helped to keep me looking calm instead of puffy-eyed and horrible, as I felt.”

Malcom Gladwell in The Tipping Point notes that companies often intentionally try to recruit buzz agents or learn the taste of those who are central to social networks and are trend setters so they can influence others’ behavior, either through social communication or through friends and others wanting to emulate these influencers’ behaviors.

Buzz agents, home marketers (like Amway reps) and the like are distinct from viral marketing which does involve social capital (i.e., it spreads through social networks) but it is not exploitative.  In other words, if I love a band on MySpace and tell my friends about it through e-mail, or if I see a funny video on JibJab and e-mail it to my friends, the popularity spreads easily because of social networks, but the sender of the e-mail does not stand to profit from the referral (other than getting credit from the recipient for being ‘in the know’ if he/she likes the band or finds the video funny).

Moreover, many social networking sites (many found here) are premised on the notion that harnessing these social networks can be highly effective, whether it to find a mate or date, to land a job, or to seal a business deal.

Fine and Harrison note that using friendships to sell products cany be a virus that kills the underlying relationship when friends realize that it was their ‘friend’s’ self-interest that motivated their recommendations.

Your thoughts?


2 responses to “Social capital marketing (word of mouth)

  1. Hello – great post about Buzz Agents! Here’s one you may have heard of – Buzz Agents for Cybercamps Summer Camps. Their Action Agent program allows kids to refer-a-friend to summer camp. This is a great way for kids to work to help pay for summer camp tuition! Each kid that signs up to become an Action Agent earns a small stipend each time a friend registers for summer camp! It’s easy to register, here’s the site:

    Anyone can register, you don’t have to be a kid on their way to summer camp! You’ll need a referrers code, just type in the word “Cybercamps”.

    Happy Buzzing!

  2. To be honest when I go speak at schools I try to connect with folks at the school and get them to create buzz before I go. I often sent a video clip or audio clip so they can play it over the intercom to get kids excited about me speaking at their school. This is the same as word of mouth, only I try to use school administrators to do the buzz talk for me. It’s working!

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