[Music] why is worth about so much more effective well it turns out there are two key reasons that word-of-mouth is so much more effective the first is sort of intuitive what's a reason that word-of-mouth might be more effective than advertising trust I heard someone say right we trust our peers more than we trust ads why some somebody we know right why trust somebody we know but we also know that ads are trying to convince us right every shampoo ad you've ever seen is basically the same there's a woman with long flowy hair and she gets
an attractive spouse you've never seen a shampoo ad where someone uses the shampoo and gets an ugly spouse never happened right the person always gets an attractive spouse if there's an ad for restaurant people always enjoy the food if there's an ad for a hotel the beds are always comfortable there's no ad that says hey yeah customer service we're not so good at customer service actually we're sort of the ninetieth out of a hundred here the eighty nine of our competitors that are better if they're busy no come to us every ad every organization says
their product or service is good when you're talking about your course of course you say my course is the best this ebook is wonderful you'll learn a lot of information right if you go to someone's website and they have testimonials no one has testimonials up on their website that says yeah this course wasn't so good actually you should save your money and go somewhere else no everyone says this is the best course I ever took but because of that the consumer that reads those things on your website doesn't know whether to believe them or not
they don't know whether to trust that information but their friends their peers their social ties they'll tell it to them straight they'll say hey I read this ebook and it was really useful it helped me in my business or hey I read this and it wasn't so useful so we can trust our peers and that's the first benefit of word-of-mouth is trust the second is a little more nuanced and that's the targeting benefit of word-of-mouth what if we could find exactly the right person who might like what we have to offer we might not know
who that person is but I bet you their friends do because friends tend to know people really really well a few years ago I got a free book in the mail came to my office at the Wharton School came to me and at the office and it said hey free book and professors often get free books publishers send them to us with the hopes that we'll assign them to our students and they'll sell more copies in the process but this time they didn't just send me one book they sent me two copies of the same
book so I'm sitting there in my office going ok these books look exactly the same why the second copy and there was a note in the back of one that said hey professor Berger we think you'll like this book but we think you'll also know someone else who will like this book past the second copy on to them and that's the first very simple hack I'm gonna share with you this afternoon how by turning customers into advocates can we get them to do the work for us because I didn't pass that book along randomly I
pass it on to the person in my social network that I thought would find that book most interesting or relevant or valuable no wonder that referred business people that come in from existing business have about 20% higher customer lifetime value because someone went through their social network almost like a searchlight to find their peer that might be most interested in that topic if you don't have a kid no one's gonna tell you about a great website for baby clothes if you don't like spicy food no one's gonna tell you bout a great website restaurant that
has spicy food they pass information on to you based on your interests well good news if you can use your customers they'll do the exact same to you they'll go through their network saying hey who do I know that would like this information and guess what people tend to be friends with other people like them if you like football you tend to know other people that like football if you like romantic comedies you tend to know other people that like romantic comedies people tend to be friends with other people like them in sociology this is
called homophony but what that means if someone took your course someone read your book and they liked it they probably know one too five ten fifteen other people that would like it as well if you can turn them into advocates they'll do the work for you so let's start talking about social currency and to talk about social currency I want to use an example from New York City how many of you have ever been to New York City okay some of you for the rest of you imagine that you're visiting New York City this upcoming
weekend you're walking around the Lower East Side your stomach is rumbling you've got to get a bite to eat you've done all the touristy things you visited the Empire State Building you walked across the Golden Gate Bridge now it's time to get a bite to eat and you'll notice a big hot dog shaped sign sausage shaped sign out in front of a restaurant with the words eat me written on it and what look like mustard suicide huh I haven't had a hot dog in a while I'll check this place out so you walk down a
flight of stairs into a restaurant called CRIF dogs now if you like hot dogs you will be in heaven CRIF dogs has every hot dog you can imagine we have a good morning hotdog with bacon eggs and cheese I don't know about eating hot dogs for breakfast but interesting nonetheless they have a hot dogs green onion and pineapple and they have a traditional New York style water dog which just ketchup and mustard so you're sitting there you're munching on your hot dog when you notice something unusual in the corner of the room it almost looks
like a phone booth like one of those things that Clark Kent might jump into to change into Superman just for fun you have a couple minutes slide open that door and walk inside it's pretty cramped in there it's a phone booth after all but on the wall you'll see something you probably haven't seen in 20 to 25 years do you remember rotary dial phones remember those phones you had to stick your finger in and had to go around in a circle my grandmother had one in her house for example on the inside of that phone
booth is a rotary dial phone pick up the receiver hold it to your ear put your finger and say the number to go all around in a circle and listen to what happens well the phone will actually ring it'll go ring ring then someone will pick up the line and they'll ask you whether you have a reservation now the first time I heard this story I was a little bit like you I had a quizzical look on my face I said reservation I'm at a phone booth inside of a hot dog restaurant what could I
possibly have a reservation for but if you're lucky and you made a reservation or a friend made a reservation or they happen to have space the back of that phone booth will open and you'll be led into a secret bar called please don't tell now please don't tell is violative number of traditional laws of marketing no sign on the street no sign inside the restaurant they done everything they can to make themselves difficult to find and yeah everyday they're full by 3:00 p.m. phone lines open up by 3:30 all the seats are gone people frantically
hit redial again and again and again trying to get through and it's not lack of competition just like you there's lots of competition around there you may not have been to New York recently but it turns out there's more than one bar in New York City there's a couple bars on that side of the block a couple bars on the other side of the block dozens of bars and a couple block radius lots of competition for what they're having to offer so how did they cut through the clutter how did they get attention for what
they were offering well they did something interesting they made themselves a secret and let me tell you a little secret about secrets think about the last time someone told you something and they told you not to tell anybody else what's the first thing you then did with that information you told someone right because having access to information that not everyone else knows makes you look smart and makes you look in the know it gives you what I'll call social currency just like the car we drive and just like the clothes we wear the things we
talk about and the things we share affect I'll ever be [Music]
