Contagious: Why Things Catch On (7 page)

Contrast that with medals given out at the Olympics or your local track meet. If entrants tell you they won silver, you know exactly how well they did. Even someone who knows almost nothing about track can tell right away whether an entrant is a star or just doing okay.

Many British supermarkets use a similarly intuitive labeling system. Just as with stoplights, they use red, yellow, or green circles to denote how much sugar, fat, and salt are in different products. Low-sodium sandwiches are marked with a green circle for salt while salty soups get a red circle. Anyone can immediately pick up on the system and understand how to behave as a result.

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Many contests also involve game mechanics. Burberry created a website called “Art of the Trench” that is a montage of Burberry and all the people who wear it. Some photos were taken by the world’s leading photographers, but people can also send in photos of themselves or their friends wearing the iconic Burberry trench coat. If you’re lucky, Burberry posts your image on its website. Your photo then becomes part of a set of images reflecting personal style from across the globe.

Imagine if your photo was picked for the site. What would be your first impulse? You’d tell someone else! And not just one person. Lots of people.

As apparently everyone did. The Burberry site garnered millions of views from more than a hundred different countries. And
the contest helped drive sales up 50 percent.

Recipe websites encourage people to post photos of their
finished meals. Weight loss or fitness programs encourage before-and-after photos so people can show others how much better they look. A new bar in D.C. even named a drink, the Kentucky Irby, after my best friend (his last name is Irby). He felt so special he told everyone he knows about the drink and along the way helped spread the word about this new establishment.

Giving awards works on a similar principle. Recipients of awards love boasting about them—it gives them the opportunity to tell others how great they are. But along the way they have to mention who gave them the award.

Word of mouth can also come from the voting process itself. Deciding the winner by popular vote encourages contestants to drum up support. But in telling people to vote for them, contestants also spread awareness about the product, brand, or initiative sponsoring the contest. Instead of marketing itself directly, the company uses the contest to get people who want to win to do the marketing themselves.

And this brings us to the third way to generate social currency: making people feel like insiders.

MAKE PEOPLE FEEL LIKE INSIDERS

In 2005, Ben Fischman became CEO of SmartBargains.com. The discount shopping website sold everything from apparel and bedding to home decor and luggage. The business model was straightforward: companies wanting to offload clearance items or extra merchandise would sell them cheap to SmartBargains, and SmartBargains would pass the deals on to the consumer. There was a broad variety of merchandise, and prices were often up to 75 percent lower than retail.

But by 2007 the website was floundering. Margins had always
been low, but excitement about the brand had dissipated, and momentum was slowing. A number of related websites had also sprung up, and SmartBargains was struggling to differentiate itself from similar competitors.

A year later Fischman started a new website called Rue La La. It carried high-end designer goods but focused on “flash sales” in which the deals were available for only a limited time—twenty-four hours or a couple of days at most. And the site followed the same model as sample sales in the fashion industry. Access was by invitation only. You had to be invited by an existing member.

Sales took off, and the site did extremely well. So well, in fact, that in 2009 Ben sold both websites for $350 million.

Rue La La’s success is particularly noteworthy, given one tiny detail.

It sold the same products as SmartBargains. The exact same dresses, skirts, and suits. The same shoes, shirts, and slacks.

So what transformed what could have been a ho-hum website into one people were clamoring to get access to? How come Rue La La was so much more successful?

Because it made people feel like insiders.

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When trying to figure out how to save SmartBargains, Fischman noticed that one part of the business was doing incredibly well. Its Smart Shopper loyalty club allowed people who signed up to get reduced shipping fees and access to a private shopping area. Deals that no one else could see. It was a small part of the site, but growth was through the roof.

At the same time, Fischman learned about a concept in France called
vente privée
, or private sale. Online flash sales that
were available only for a day. Fischman decided that this was the perfect way to put a unique spin on his business.

And it was. Rue La La hit the ground running because it smartly leveraged the urgency factor. Part of this started by accident. Every morning the site posted new deals at 11:00 a.m. But in the first couple of months demand was so much higher than expected that by 11:03 a.m. everything would be sold out. Gone. So customers learned that if they didn’t get there right away, they’d miss out.

As it has grown, Rue La La has maintained this limited availability. It still sells out 40 percent to 50 percent of items in the first hour. Sales have grown, but it’s not that revenue gets bigger across the course of the day. The traffic spikes at 11:00 a.m. have simply reached higher and higher levels.

Going to a membership-only model also made the site’s members feel like insiders. Just as with the velvet rope that prevents regular partygoers from just walking into an exclusive nightclub, people assumed that if you had to be a member, the site must be really desirable.

Rue La La’s members are its best ambassadors. They proselytize better than any ad campaign ever could. As Fischman noted:

It’s like the concierge at a hotel. You go down to the concierge to find out about a restaurant and he tells you a name right away. The assumption is that he is getting paid to suggest that place and the restaurant is probably mediocre. But if a friend recommends a place you can’t wait to get there. Well when a friend tells you you’ve gotta try Rue La La, you believe them. And you try it.

Rue La La unleashed the power of friends telling friends.

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While it might not be obvious right away, Rue La La actually has a lot in common with Please Don’t Tell, the secret bar we talked about at the beginning of the chapter. Both used scarcity and exclusivity to make customers feel like insiders.

Scarcity is about how much of something is offered. Scarce things are less available because of high demand, limited production, or restrictions on the time or place you can acquire them. The secret bar Please Don’t Tell has only forty-five seats and doesn’t allow more people than that in. Rue La La’s deals were available for only twenty-four hours; some are even gone within thirty minutes.

Exclusivity is also about availability, but in a different way. Exclusive things are accessible only to people who meet particular criteria. When we think of exclusivity, we tend to think of flashy $20,000 diamond-encrusted Rolexes or hobnobbing in St. Croix with movie stars. But exclusivity isn’t just about money or celebrity. It’s also about knowledge. Knowing certain information or being connected to people who do. And that is where Please Don’t Tell and Rue La La come in. You don’t have to be a celebrity to get into Please Don’t Tell, but because it is hidden, only certain people know it exists. Money can’t buy you access to Rue La La. Access is by invitation only, so you have to know an existing user.

Scarcity and exclusivity help products catch on by making them seem more desirable.
If something is difficult to obtain, people assume that it must be worth the effort. If something is unavailable or sold out, people often infer that lots of other people must like it, and so it must be pretty good (something we’ll talk more about in the Public chapter).
People evaluate
cookbooks more favorably when they are in limited supply, find cookies tastier when they are scarce, and perceive pantyhose as higher end when it’s less available.

Disney uses this same concept to increase demand for decades-old movies. It takes prime animated features like
Snow White
and
Pinocchio
off the market and puts them in the “Disney Vault” until it decides to reissue them. This limited availability makes us feel like we
have
to act now. If we don’t we might miss the opportunity even if we might not have otherwise wanted the opportunity in the first place.
^*

Scarcity and exclusivity boost word of mouth by making people feel like insiders. If people get something not everyone else has, it makes them feel special, unique, high status. And because of that they’ll not only like a product or service more, but tell others about it. Why? Because telling others makes them look good. Having insider knowledge is social currency. When people who waited hours in line finally get that new tech gadget, one of
the first things they do is show others. Look at
me
and what
I
was able to get!

And lest you think that only exclusive categories like bars and clothes can benefit from making people feel like insiders, let me tell you about how McDonald’s created social currency around a mix that includes tripe, heart, and stomach meat.

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In 1979, McDonald’s introduced
Chicken McNuggets. They were a huge hit and every franchise across the country wanted them. But at the time McDonald’s didn’t have an adequate system to meet the demand. So Executive Chef Rene Arend was tasked with devising another new product to give to the unlucky franchises that couldn’t get enough chicken. Something that would keep them happy despite the shortages.

Arend came up with a pork sandwich called the McRib. He had just come back from a trip to Charleston, South Carolina, and was inspired by Southern barbecue. He loved the rich, smoky flavor and thought it would be a perfect addition to the McDonald’s menu.

But contrary to what the name suggests, there is actually very little rib meat on the McRib. Instead, imagine a pork patty shaped into something that looks like a rack of ribs. Subtract the bones (and most of the higher-quality meat), add barbecue sauce, top it off with onions and pickles, toss it in a bun, and you pretty much have the McRib.

Lack of rib meat aside, the product test-marketed quite well. McDonald’s was excited and soon added the product to the nationwide menu. McRibs were everywhere from Florida to Seattle.

But then the sales numbers came in. Unfortunately, they were much lower than expected. McDonald’s tried promotions and
features, but not much worked. So after a few years it dropped the McRib, citing Americans’ lack of interest in pork.

A decade later, however, McDonald’s figured out a clever way to increase demand for the McRib. It didn’t spend more money on advertising. It didn’t change the price. It didn’t even change the ingredients.

It just made the product scarce.

Sometimes it would bring the product back nationally for a limited time; in other cases it would offer it at certain locations but not others. One month it would be offered only at franchises in Kansas City, Atlanta, and Los Angeles. Two months later it would be offered only in Chicago, Dallas, and Tampa.

And its strategy worked. Consumers got excited about the sandwich. Facebook groups started popping up asking the company to “bring back the McRib!” Supporters used Twitter to proclaim their love for the snack (“Lucky me, the McRib is back”) and to learn where they could find one (“I only really use Twitter to find out when the McRib is available”). Someone even created an online McRib locator so fans could share locations that offered the sandwich with others. All for what is mostly a mix of tripe, heart, and stomach meat.

Making people feel like insiders can benefit all types of products and ideas. Regardless of whether the product is hip and cool, or a mix of leftover pig parts. The mere fact that something isn’t readily available can make people value it more and tell others to capitalize on the social currency of knowing about it or having it.

A BRIEF NOTE ON MOTIVATION

A few years ago I went through a fundamental male rite of passage. I joined a fantasy football league.

Fantasy football has become one of America’s most popular unofficial pastimes. For those unfamiliar with the game, it’s essentially like being the general manager of an imaginary team. Millions of people spend countless hours scouting players, tweaking their rosters, and watching their performance each week.

It always seemed funny to me that people spent so much time on what is essentially a spectator sport. But when a group of friends needed one more person and asked me if I’d play, I said why not.

And sure enough, I got sucked in. I spent hours every week scanning through cheat sheets, reading up on players I’d never heard of, and trying to find sleepers other people hadn’t drafted. Once the season started I found myself watching football, something I had never done before. And it wasn’t to see whether my local team won. I was watching teams I knew nothing about, checking out which of my players were doing better, and tweaking my roster each week.

But the most interesting part?

I did this all for free.

No one paid me for the hours I spent, and my friends and I didn’t even have a bet riding on the outcome. We were just playing for fun. And, of course, bragging rights. But since doing better than others is social currency, everyone was motivated to do well. Even without a monetary incentive.

The moral? People don’t need to be paid to be motivated. Managers often default to monetary incentives when trying to motivate employees. Some gift or other perk to get people to take action. But that’s the wrong way to think about it. Lots of people will refer a friend if you pay them a hundred dollars to do so. Offer people the chance to win a gold Lamborghini and they’ll
do almost anything. But as with many monetary incentives, handing out gold Lamborghinis is costly.