The

Word-of-mouth promotion has becomean increasingly potent force, capableof catapulting products from obscurityinto runaway commercial successes.But to harness the considerable powerof buzz, companies must reject fivecommon myths.

Buzzn Buzz ̂

by Renée Dye

Bu z z IS THE STUFF OF MARKETING LEGENDS.Dark and witty Harry Potter, the traffic-stopping retro Beetle, the addictive Pokémon,

cuddly Beanie Babies, the hair-raising Blair WitchProject~a\\ are recent examples of blockbuster com-mercial successes driven by customer hype. For somereason, people like to share their experiences withone another-the restaurant where they ate lunch,the movie they saw over the weekend, the computerthey just bought-and when those experiences are favor-able, the recommendations can snowball, resultingin runaway success. But ask marketing managers aboutbuzz, 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 ofMcKinsey & Company.

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The Buzz on Buzz

My research suggests otherwise. Investigating themarketing practices at more than 50 companies, mycolleagues and 1 at McKinsey have found that buzz-a phenomenon we've dubbed "explosive self-generatingdemand" -is hardly a random force of nature. Instead, itevolves according to some basic principles. My researchshows that companies can predict the spread of buzz byanalyzing how different groups of customers interactand influence one another.

Many executives have little idea how to orchestratea marketing campaign that exploits the full power of cus-tomer word of mouth. Instead, they remain enslaved tofive common misconceptions about the phenomenon.Before companies can reap the total benefits of buzz,they must understand the principles of how it works, anddoing so requires a close examination of those five myths.

MYTH 1: Only outrageous or edgyproducts are buzz-worthy.Everyone can point to a buzz-driven consumer craze thatwas due in part to the sheer inanity or fringe quality ofa product-think of pet rocks or the movie The Matrix.Yet according to our analysis, a surprisingly large portionof the U.S. economy-a shade above two-thirds - hasbeen at least partially affected by buzz. (See "What BuzzAffects" for an industry-by-industrybreakdown.) Obviously, buzz greatlyaffects the entertainment and fashionindustries, but it also influences agricul-ture, electronics, and flnance. Indeed,few industries are immune these days,partially because of technological inno-

vations like the Internet that enablecustomers to spread buzz quickly.

Consider the pharmaceuticalindustry, which has recently

witnessed a dramatic increase inthe power of buzz. In the past, phar-

maceutical companies marketed newprescription drugs primarily througha direct sales force that distributed edu-cational materials and free samplesto physicians. Consumers were rarelyaware of new therapies except as pre-scribed by their doctors.

Today, thanks to extensive advertisingand the Internet, consumers have accessto health-care information on a scaleundreamed of just ten years ago. In-deed, a revolution is under way, trans-forming people from passive to activeparticipants. In choosing their treat-ments, such active consumers can-anddo-generate and spread buzz. Case in

W H A T BUZZ AFFECTS*Slightly more than two-thirds ofthe U.S. economy has beeninfluenced by buzz.

54%

13%

13% Largely Driven by BuzzToys, sporting goods, motionpictures, broadcasting, amusementand recreation services, fashion

54% Partially Driven by BuzzFinance (investment products),hotels and lodging, electronics,printing and publishing, tobacco,automotive, Pharmaceuticalsand health care, transportation,agriculture, food and drink

33% Largely Immune to BuzzOil, gas, chemicals, railroads,insurance, utilities

'McKinsey & Company estimate for 1994U.S. economy (total equals 16 triilionl

point: Viagra, one of the most talked-aboutprescription drugs ever, even among those who

don't need it.Shrewd pharmaceutical companies are now

taking a two-pronged approach to jump-startbuzz among both doctors and consumers. For example,when Merck launched Fosamax, a therapy for osteo-porosis, the company carefully chose scientists andphysicians with high standing to conduct the clinicaltrials and to promote the new treatment. In addition,Merck increased the visibility of the new treatmentby sponsoring symposia at international meetings. Onthe consumer side, the company launched a major mar-keting campaign in women's magazines to inform read-ers of the risks of osteoporosis and educate them aboutthe value of screening and preventive treatment. Beforelong, the debilitating bone condition became a commontopic of discussion among women and between womenand their doctors. As a result of these efforts, Merck wasable to generate significant buzz for a previously unnchtable subject.

Medicine is one thing, but sometimes even the mostordinary products can benefit from buzz. RememberHush Puppies? When the company discovered that hipNew York City kids were snapping up vintage pairs ofits shoes at secondhand stores, it rushed into action.

It began making its shoes in shades likeDay-Glo orange, red, green, and purple.Next, it sent free samples to celebrities,and not long after, David Bowie andSusan Sarandon were spotted wear-ing them. Then the company tightlycontrolled distribution, limiting theshoes to a handful of fashionable out-lets. Soon high-end retailers like Saks,Bergdorf Goodman, and Barneys werebegging for them. In just three years,from 1994 to 1996, Hush Puppies sawits annual sales of pups inNorth America skyrocketfrom fewer than 100,000pairs to an estimated1.5 million.

Of course.

not every product is agood candidate for buzzmarketing. How, then, canmanagers assess buzz-worthiness?Two criteria make it possible.

First, products ripe for buzz areunique in some respect, be it in look,functionality, ease of use, efficacy, orprice. For Chrysler's PT Cruiser, thedegree of difference from the competi-tion clearly lies in its retro, gangster-era

140 HARVARD BUSINESS REVIEW November-December 2000

The Buzz on Buzz

look. In the case of collapsible scooters,the key buzz-worthy factors are function-ality and ease of use: what other productallows people to dash from place to placeon a lightweight, folding device?

Second, products with great buzz poten-tial are usually highly visible. For manyproducts, that condition is a no-brainer.The popularity of fashion accessories, likeGucci's baguette bags, tends to spreadÜke wildfire because they are easily seen byothers. Every time someone in a meetingpulls out a Palm device to jot a note, thecompany gets another endorsement of its popular PDA.

But insightful companies have discovered that productscan be made visible. One way is to create forums, such asInternet chat groups, where customers can exchangeinformation about a product-such as a new medicaltreatment-that might otherwise have remained hidden.Often, creative approaches are needed to facilitate thediscussion. Pfizer, the maker of Viagra, faced an uphillbattle when trying to generate buzz for its breakthroughdrug, because impotence was a taboo subject But by pop-ularizing the medical terms "erectile dysfunction" and"ED," the company transformed the undiscussable intofodder for the bedroom and backyard alike.

MYTH 1: Buzz just happens.Many people believe that buzz is largely serendipitous.Not so. We have found that buzz is increasingly theresult of carefully managed marketing programs. Savvy

ALL CUSTOMERS

ARE NOT CREATED

EQUAL. SOME-THE

VANGUARD - HAVE A

DISPROPORTIONATE

ABILITY TO SHAPE

PUBLIC OPINION.

managers have a portfolio of marketingtactics from which they assemble just theright sequence to generate and sustainbuzz. Here are some of the most powerfultactics we've identified from our research.

Seed the vanguard. All customers arenot created equal. Some-the vanguard-have a disproportionate ability to shapepublic opinion. Increasingly, managers arerecognizing that getting their productsinto the hands of the vanguard can payoff exponentially in how the mass marketultimately responds. Abercrombie & Fitch,

for example, recruits college students from popularfraternities and sororities to work in its stores, know-ing that they will then probably wear A&F clothesmore frequently and, in doing so, implicitly endorsethe fashions.

Ration suppiy. People often want what they-or oth-ers-can't have. The luxury-goods industry has longexploited this tendency, and today other companies areincreasingly using it to their advantage.

Walt Disney has excelled at maintaining high demandand buzz for its animated films by carefully controllingtheir availability on video. The "Disappearing Classics"campaign of 1991 announced that the company wouldretire certain videos, allowing consumers just a limitedtime to purchase them. Films subsequently brought outof retirement were being re-released in theaters. Pre-vious experience with this campaign led Disney to pro-ject in 1995 that video sales for some films could surgeby as much as 400%.

THE 5 MYTHS OF BUZZ

THE MYTH...

Only outrageous or edgy productsare buzz-worthy.

2 Buzz just happens.

3 The best buzz-starters are yourbest customers.

A To profit from buzz.you must actfirst and fast.

Q The media and advertising are neededto create buzz.

.. M II 1 II ' " - 1

...THE REALITY

The most unlikely products, like prescription drugs,can generate tremendous buzz.

Buzz is increasingly the result of shrewd marketing tactics inwhich companies seed a vanguard group, ration supplies, usecelebrities to generate buzz, leverage the power of lists, andinitiate grassroots marketing.

Often, a counterculture has a greater ability to start buzz.

Copycat companies can reap substantial profits if they knowwhen to jump in-and when not to.

When used either too early or too much, the mediaand advertising can squelch buzz before it ignites.

142 HARVARD BUSINESS REVIEW November-December 2000

The Buzz on Buzz

Volkswagen took this tactic one stepfurther in marketing its retro Beetle.A year after the car's introduction, thecompany offered Internet-only sales in twonew colors, "vapor blue" and "reflex yellow,"with exactly 2,000 cars available in each.This attention-grabbing maneuver triggeredits own share of buzz and ignited an addi-tional round of publicity for the alreadypopular cars. Within two weeks, consumershad quickly snapped up half of the limited-edition models.

Exploit kons to beget buzz. Another tac-tic that companies use to trigger buzz is celeb-rity endorsement. Thanks to ad campaignsfeaturing icons hke Michael Jordan and TigerWoods, Nike has built its brand into a market-ing juggernaut Advertising, however, is merelyone way to leverage the power of icons.

Tickle Me Elmo became the best-sellingtoy of the 1996 Christmas season in theUnited States after Rosie O'Donneil playedwith the doll on her daytime talk show. A pub-lic relations agency had cleverly engineered ~~this runaway success by sending an Elmo toO'Donnell's son. Literary publicists eagerlylobby staffers at Harpo, knowing that manybooks Oprah Winfrey selects for her book clubpole-vault onto the New York Times best-seller list

Movies and television shows can also serve as power-ful endorsers. During the funeral scene in the hit filmFour Weddings and a Funeral, one of the characters reads"Stop All the Clocks," a poem by W.H. Auden. After thefilm opened. Vintage Books adroitly published a slen-der volume containing the poem and other Audenpoems, which sold 50,000 copies in three years. (Mostpoetry books sell around 500 copies.) It's no wonder com-panies have been aggressively seeking, and sometimespaying huge sums for, key product placements. Luckhad little to do with the appearance ofa BMW Z3 Roadster in the James Bond fiickGoldenBye or the prominence of an Applelaptop computer in Mission Impossible.

Tap the power of lists. Lists are potenttools for creating buzz because they'reeffective road signs for information-besieged consumers who don't knowwhere to focus their attention. Perhaps noone knows this better than movie execu-tives, who hold their collective breathevery Monday morning, waiting for theweekend box-office rankings that caneither make or break new releases. Even inthe world of ivory towers, the annual listsof colleges and universities by U.S. News &

LUCK HAD LITTLE TODO WITH THE

APPEARANCE OF ABMWZ3 ROADSTER

IN THE JAMES BONDFLICK COLDENEYE OR

THE PROMINENCE OFAN APPLE LAPTOP

COMPUTER INMISSION IMPOSSIBLE.

World Report can dramatically increase or decrease thenumber of applications to a given institution.

Some companies have begun to leverage lists increative ways. In 1998, Modern Library, an imprint ofRandom House, surveyed its editorial board to compilea list of the top loo novels of the twentieth century. Theselections, which the company publicized on its Website, became the focus of much animated discussion, inpart because of a spat between the editorial board andthe publisher over the process used to compile the list.

Within five months, more than 1,000 arti-cles and editorials had appeared aboutthe controversial Ust Even more remark-able, though, was that within weeks ofthelist's publication, four of the top five nov-els made their way on to Amazon.com'sweekly list of paperback best-sellers, withJames Joyce's Ulysses having pride of placeat number 2! Of course. Modern Librarywasn't the only imprint to benefit fromthis buzz-any publisher with editionsof the selected books experienced anupsurge in sales. But Modern Library re-ceived a tremendous amount of free pub-licity, and traffic at its Web site surged bya jaw-dropping 7,000%.

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The Buzz on Buzz

Nurture the grass roots. The final buzz tactic focuseson establishing and extending product loyalty through-out a community. At first, this tactic might sound sim-ilar to seeding the vanguard, but there is a critical dif-ference. Members of the vanguard typically delight inbeing the first to know about a product; they revelin this exclusivity. When other people begin to adoptthe product, the vanguard often moves on to the nextbig, exclusive thing, in contrast, a grassroots strategyrelies on early adopters who try to convert other peo-ple-to turn them into users, too. With many new drugtherapies, for instance, early patients who've been suc-cessfully treated wish for others to benefit. Users of net-work services like America Online try to recruit othersbecause the usefulness ofthe service grows with the num-ber of members. Or perhaps consumers identify so deeplywith a brand that they want others to become a part ofthat community.

A powerful example of buzz nurtured at the grass-roots level is the marketing campaign that Harley-Davidson used in its remarkahle turnaround. In 1981,the motorcycle manufacturer was nearly bankrupt asJapanese competitors with superior quality and lowercosts had demolished what was once a thriving U.S.industry. But the 13 executives who bought Harley fromparent AMF believed they could save the company bytapping into the fervent loyalty of its customers; for

FINDINCTHE BUZZ-STARTERS

Some customers shape public opinion more than others.To identify these buzz-starters, companies can try a

process made up of four questions:

Research Methods

A, How would we groupour customers basedon their purchasingbehaviors?

B. How do thesegroups influence oneanother's purchasingof our products?

• Marketing and industry data' Information from trend spotters'Observation of customers' Customer panels and interviews

' Observation of customers• Customer interviews

C. What are the potentialpaths for buzz tospread between differ-ent customer groups?

' Simulations that show theflow of information fromone group to another

D. Which path is thestrongest, and whichgroup starts the buzz?

• Interviews of customergroups to determine theirpropensity to adopt andrecommend the product

A CRASSROOTS STRATEGY RELIES

ON EARLY ADOPTERS WHO TRY TO

CONVERT OTHER PEOPLE - T O TURN

THEM INTO USERS, TOO.

them, Harley-Davidson was not just a motorcycle but anidentity. In 1983, the company established and sponsoredthe Harley Owners Group, or HOG, with numerousregional chapters around the United States. Strapped forcash, Harley used inexpensive buzz marketing tech-niques-newsletters and posters-to publicize HOG viathe dealer network. More important, though, Harleyrelied on extensive word of mouth generated withinthese communities. HOG quickly grew in strength, spon-soring hundreds of rallies that drew Hariey owners fromacross the country. Today, more than 350,000 ownersbelong 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 mustdecide which tactics to deploy and in what order. In gen-eral, seeding the vanguard and rationing the supply areused first to foster a sense of exclusivity, while using iconsmight come later in a mass-marketing campaign.

Consider the sequencing that Ty shrewdly used totouch off a national mania for its rather unremarkablebean-stuffed toys. Initially, Beanie Babies were availableonly through specialty toy retailers (supply rationing)that catered to upper-income families. Children fromthose households (the vanguard) took the first BeanieBabies to school, generating demand among other kids.Then ly broadened the distribution by teaming withMcDonald's (an icon) to give the toys away in HappyMeals. The craze intensified as the media ran stories offamilies buying dozens of meals and throwing out thefood because they just wanted the toys. Meanwhile, Tyregularly retired some models from production (supplyrationing), resulting in their selling for several thousanddollars on secondary markets. Eventually, adults, manywithout children, became fanatic purchasers, accumulat-ing hundreds in their collections.

The best buzz-startersare your best customers.In order to spark buzz, marketing managers often turnfirst to the opinion leaders from within the commu-nity that will eventually become the bulk ofthe market.But that can be a crucial mistake. The best vanguard fora product may not be immediately obvious. It may evencome from a counterculture.

Take Tommy Hilfiger. The designer focused on young,urban African-Americans to imprint his brand witha street hipness. It worked. The popularity of Hilfigerclothes quickly spread from the inner city to the suburbs,

144 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 sparkbuzz for its then lower-end no-name alcohol, they didnot target married middle-aged males in the suburbs.Instead, they initially focused on the gay community inSan Francisco. Buzz rapidly diffused outward and, com-bined with a funky, award-winning marketing campaign,helped catapult Absolut to the enviable position of top-selling vodka in the United States.

Finding such unexpected vanguards is nearly impossi-ble with marketing data that concentrate solely on whatindividual consumers think about a product-and not onhow consumers influence one another about the prod-uct. Marketing researchers are thus developing newmethodologies to account for customer-to-customerinteractions. An obvious approach is to track the path ofbuzz for a similar product that was successful and thenseek to replicate that pattern. More sophisticated tech-niques attempt to model how consumers interact withone another and how highly they value others as sourcesof information or as behavioral models. (For details ofsuch an approach, see "Finding the Buzz-Starters.")

MYTH 4: To profit from buzz,you must act first and fast.Trendsetting companies may generate buzz, but copycatfirms can also reap tremendous benefits. The cosmeticsindustry provides insight into how trendsetting compa-nies and their followers can create value for themselves.

Consider funky-colored nail polish, a buzz-createdproduct if ever there was one. The rise to glory beganwhen Dinah Mohajer, then a college student, wantedto paint her toenails to match her strappy blue sandals.So she did what any budding entrepreneur would: shemixed some polish herself.

Mohajer's homemade concoction created such a stiron the University of Southern California campus that sheand her boyfriend soon found themselves in business,mixing batches in her bathtub and wearing gas masksfor protection from the noxious fumes.To distribute their product, dubbed HardCandy, they selected exclusive clothingboutique Fred Segal in upscale BeverlyHills as their flrst outlet and then ex-panded to other trendy local salons. Dur-ing this time, demand was solely driven byword-of-mouth hype among chic urbanclientele (that is, the vanguard).

Hard Candy was gradually introducedinto additional exclusive salons and stores,eventually becoming available in high-endchains such as Nordstrom and NeimanMarcus. Publicity for the product surgedas the paparazzi photographed Hollywood

WITHOUT HAVINOTO INVEST TIME OR

MONEY IN PRODUCTDEVELOPMENT, A

COPYCAT COMPANYCAN ENJOY THE

REWARDS OF BUZZ ASA LATE PARTICIPANT.

icons like Quentin Tarantino and Drew Barrymore wear-ing Hard Candy. The buzz then reached near-excruciatingdecibel levels when actress Alicia Silverstone gushedabout her sky-blue polish to David Letterman on na-tional television. In three years. Hard Candy sales hit anestimated $30 million.

The major cosmetics companies, such as Fstée Lauderand Lancôme, didn't just sit there. Many moved quicklyto launch their own lines of funky-colored nail polish.But only after the craze became firmly entrencheddid Revlon, the cosmetics mass-marketer, launch itsStreetWear line.

Did Revlon miss the boat? In a word, no. Companieswith established midmarket or downstream brandsand large, loyal customer bases often have very goodreasons for waiting until a trend is flrmly establishedbefore building it into their product portfolios. With-out having to invest time or money in product develop-ment, a copycat company can enjoy the rewards of buzzas a late participant-provided it knows when to enterthe market and can do so quickly before the trendhas faded. In its early days, the Limited could copya fashion design from the runway, manufacture knock-off products, and distribute them to company stores injust 30 days.

Yet most companies don't have the right systems orprocesses in place to successfully follow trendsetters.By the time buzz works its way up a traditional market-ing department, the trend may already be dead. To besuccessful, fast followers and mass-market adaptersmust develop an alternative set of practices for tuning into buzz. Teen People, for instance, keeps a group of 4,otxi"trend spotters" on call. The magazine encourages themto submit story ideas and respond to published articles.In addition, it invites them monthly into regional officesto discuss what's cool and, equally important, what's not

Manufacturing and retailing companies commonlyemploy "cool hunters," individuals who specialize inknowing what's in vogue. The cool hunter for urbanretailer Wet Seals routinely attends runway shows, scouts

competitors' stores, reads popular maga-zines, watches hit television shows, listensto popular music, and interviews kidson the street in different internationalmetropolises.

Another provocative and powerfulbuzz-spotting medium is the Internet.Many companies have discovered that bysetting up chat sites like Gurl.com, theycan establish an efficient and economicalmain line into what consumers are think-ing. These Web sites can function asvirtual focus groups operating in near-continual session, enabling companiesto track consumer buzz as it develops.

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The Buzz on Buzz

With such methods, copycat firms can strike while themarket is just heating up, not while a trend has alreadybegun to cool.

MYTH 5: The media and advertisingare needed to create buzz.while the media and advertising can help fan the flamesof buzz, involving them too early can undermine buzz.Indeed, the vanguard will often reject a heavily pro-moted product that it otherwise would have embracedmerely because of overexposure.

Buzz-hungry companies need to refocus their market-ing lenses on consumer-to-consumer communications-be they verbal, visual, or digital. That's where buzzis bom. In other words, to generate buzz, the objective isnot to besiege consumers with advertising but to some-how encourage them to talk about a product or to usethat product so that it's noticed by other people.

The founders of Hotmail, the free e-mail service, keenlyunderstood this principle. The start-up company made itscustomers its most potent marketing force by appendinga soft-sell line-"Get your free e-mail at Hotmail" - toevery outgoing e-mail from one of its users. In its first18 months of business, Hotmail signed up 12 million peo-ple. (In comparison, AOL took more than six years toamass that many customers.) Yet the company spenta meager $500,000 on advertising during that period. Bycontrast, Hotmail advertisements with "Free e-mail" but-tons on highly trafficked Web sites produced dwarfishresponse rates, suggesting that the company's remarkablesuccess owed more to the marketing strategy of activemessaging than to the free nature ofthe service itself,Today Hotmail, now owned by Microsoft, claims to havemore than 80 million registered users.

But such programs, dubbed viral marketing, can alsobe dangerous, because consumers may feel that they arebeing exploited or are themselves taking advantage ofothers. Some companies have offered cash to people toprovide the names and e-mail addresses of their friendsand relatives, who would then have the same opportu-nity for financial gain in enlisting others. When suchtechniques smack of pyramid schemes, they are morelikely to offend rather than entice.

The Future of BuzzGlobalization continues to expand the universe of trendsand trendsetters and to make buzz ever more exportableacross borders. Consider that the three hottest children'scrazes in the United States today-Pokémon, HarryPotter, and Teletubbies-are imports from Japan or theUnited Kingdom. Advancements in mobile telephony,PC networking, and communications bandwidth willfacilitate the creation of forums where buzz can fiour-

BUZZ-HUNORY COMPANIES NEED TOREFOCUS THEIR MARKETING LENSES

ON CONSUMER-TO-CONSUMERCOMMUNICATIONS-BE THEYVERBAL, VISUAL, OR DIGITAL.

THATS WHERE BUZZ IS BORN.

ish unconstrained by geography. And the continuedproliferation of brands will encourage people's closeassociations with them, thus furthering buzz potential.Finally, rising disposable incomes worldwide will enablea wider participation in hype phenomena.

All these factors point toward a world in which buzzwill dominate the shaping of markets. In fact, the phe-nomenon of buzz is already becoming an industry untoitself Dot-com companies like Epinions.com have builttheir entire businesses and Web sites around customerword of mouth: consumers rate and review products, andthe results are tallied for prospective shoppers to view.Such forums, as well as the past successes of buzz mar-keting, are themselves generating buzz about the grow-ing power of customer hype. Indeed, companies that areunable to control buzz may soon find that the phenome-non is increasingly controlling them. ^

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