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Table of Contents

Lead Story

Will smart phones drive out plastic cards?

News

Industry Update

VeriFone expands mobile payment footprint

Is Cimbal's proximity payment network a game changer?

IDC's take on mobile payment schemes

Features

Eight payment companies listed on Inc. 500

Selling Prepaid

Prepaid in brief

Suit the gift card to the merchant

Thom Aldredge
World Gift Card

Views

Cash still standing its ground

Patti Murphy
The Takoma Group

Further fraud trends in 2010

Nicholas Cucci
Network Merchants Inc.

Education

Street SmartsSM:
Are mobile payments a threat to ISOs? - Part 1

Ken Musante
Eureka Payments LLC

The power of word of mouth

Nancy Drexler
Marketing Consultant

Who's your counterparty?

Barry Sloane
Newtek Business Services Inc.

Four things to know about security interests

Sarah Weston
Jaffe, Raitt, Heuer & Weiss PC

Command performance meetings

Dale S. Laszig
Castles Technology Co. Ltd.

Company Profile

Blackhawk Network

New Products

Easy inventory management

ePNInventory
eProcessing Network LLC

Inspiration

If you're in business, you need a plan

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

September 27, 2010  •  Issue 10:09:02

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The power of word of mouth

By Nancy Drexler

Think of something that might be of interest or value to someone you know. It can be a hot stock tip, a juicy bit of gossip, a joke or a delectable restaurant find. Share it with just two people. Here is what will happen: if each of your two people share it with just two others, and this sharing process continues at this rate of only two "shares" per person, by the 27th time your message is shared, 134 million people would have heard it.

That is the power of word of mouth.

How many magazine ads deliver 134 million viewers? How many radio commercials deliver that number? Who among us can afford to print and mail 134 million postcards or develop an email list 134 million strong?

More importantly, what marketing message comes with the clout of a message shared by someone you know or trust? Wouldn't you be more likely to visit a restaurant raved about by a friend or co-worker than one you're aware of simply because you've seen it advertised? Even if you've already decided to visit a restaurant based on its advertising, if someone tells you the food is terrible, are you still likely to go?

That is the power of word of mouth.

The world's oldest marketing vehicle remains one of our most powerful. Harnessing the energy of word of mouth can yield amazing results at the lowest possible cost. So how do you do it?

Discerning degrees of separation

We've all heard the term "six degrees of separation." It was the name of a study conducted by psychologist Stanley Milgram in 1967. Milgram gave letters to 160 students and charged them with getting these letters to a stockbroker in Massachusetts - not by mailing them, but by hand-delivering them to someone they thought would get them closer to their target and requesting that person do the same.

As most of us now know, it took an average of six connections for each student to meet the goal and get the letter delivered.

The study was repeated at Columbia University in 2003; this time a website was used to recruit 61,000 volunteers to send messages to 18 targets worldwide. Once again, the study found six degrees of separation between onset and completion.

What this tells us, as marketers, is that the right messages can be delivered quickly and effortlessly to virtually any target in the world. Additionally, it reminds us that social media may be the perfect vehicle for harnessing the powers of both word of mouth and six degrees of separation.

Spreading the word

Remember: if two people share a message with two others who share it with two others, and this happens 27 times, nearly 1.5 million people will receive the message. Now multiply this by 10, 20, 100 or tens of thousands. That is the power of the social media.

From Facebook to LinkedIn, from association websites to industry-specific blogs, from emailing to tweeting, the Internet allows us to build social networks and spread the word at a pace unimaginable less than a decade ago.

Today, it is difficult to imagine sharing a message with only two people, when it is just as easy to share it with dozens, who then share it with dozens more, who then, as a whole, can directly impact your sales.

Making social media work

It is one thing to tweet about a celebrity's latest handbag. It is quite another to tweet about credit card processing. While the former fits squarely within the realm of social media, the latter is not quite so comfortable there. That is the challenge we in the payments business face.

Social media are meant to be exactly what the name implies: social. Networkers frown on hard selling or even hidden selling. And if they don't like what you have to say, they won't share what you have to say, which clearly defeats the purpose.

The messages we have to share aren't for everyone; they are for a clearly defined business niche. On the one hand, being in a narrow industry offers a decided marketing advantage: it is easy to describe, find and reach our customers.

Rather than blasting out messages everywhere, we can purchase mailing lists and use advertising and public relations vehicles that speak directly to our market and thus enhance the value of our messaging.

Apply that principal to online marketing, however, and the benefits don't quite pan out in the same way. Social media deliver huge breadth and scope, but narrowing and targeting an online market takes time and effort, which can cost money rather than save it.

Twitter is great for sharing information about a hot new restaurant or commenting on an A-lister's handbag; a big announcement about mid-qualified rates, on the other hand, might not exactly spread like wildfire.

To succeed in the social media universe, we have to do two things right: we have to create the right message, and we have to put it in the right context.

Finding the right context

Succeeding online begins by finding the right places to communicate meaningfully with our buyers. Human behavior is very much influenced by environment. The time, place and medium for communicating a message can measurably add to (or detract from) the message's impact and credibility.

This is why we all like to see ourselves mentioned in the The Green Sheet. Being included in a major trade paper implies that we are legitimate and worthy of quoting; it indicates we are playing the real game in the real world.

Our messages can speak directly to members of our target market while they are thinking about, and receptive to, information about payments.

We can make our names visible and familiar. Surrounded by similar, relevant messaging, the combined weight of the publication creates a context that lends professionalism, relevance and impact to the weight of each individual contribution.

In short, we are perceived as one of the experts chosen by the editors because we are experienced, insightful and credible industry players.

These perceptions are created not just by what we have to say, but by the vehicle in which we say it. And today, there are a lot more places that will help us build our reputations as industry experts. Facebook and LinkedIn may not be good choices because the context is wrong.

Look instead for the online versions of leading trade publications, for bloggers talking directly to small business owners, and for websites that have become resources for restaurant owners, dentists, auto repair shops or whatever vertical you service. These venues will help you build visibility with context and with weight.

Making the message move

While social media can speed marketing and sales messages to worldwide destinations, it is clear that some messages will be picked up and passed on while others will fall flat. In his best-selling book The Tipping Point, Malcolm Gladwell examines what makes "ideas and products and messages and behaviors spread like viruses do."

Gladwell calls it the stickiness factor. It is that special something that makes a message contagious, like a virus. And it is essential to succeeding in the social media environment.

To be spreadable, messages have to interest and excite the reader. They have to offer something new or interesting or relevant to the needs of the social media user. They must capture attention and stand out from the pack. It helps if they are catchy, witty or inspiring, but above all they must be memorable.

Only messages like these will harness the power of social media. Without an appropriate message for the medium and the market, your messages will not be noticed and will certainly not be shared. Without the power of word of mouth, social media marketing is a waste.

Becoming an industry leader

Can you think of a message that will appeal to the millions of people using social media? Can you craft it in a way that will encourage them to share it - that will make your message contagious?

Can you create a sales and marketing model that turns the power of word of mouth into a sales channel? If you can, you could be generating thousands of leads a day.

Nancy Drexler is a Marketing Consultant in the payments industry who has worked for MasterCard Worldwide, EVO Merchant Services, Cynergy Data LLC, Merchant Cash and Capital LLC, SignaPay Ltd. and SeñorPay. Reach her at nancyd@signapay.net.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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