Socially, We’re Suckers for a Deal

Razorfish’s new FEED 2009 report found that consumers like to spread the word digitally about great deals on brands. In fact, this far surpassed their desire to just talk about brands.

Humans are still Humans, even Online

Here’s the thing that gets me. When we talk digital channels, we seem to forget that humans are humans. We’ll still be the way we’ve always been, we’ll just do in on a new canvas. The “finding” of FEED 2009 discovered that we like to talk about deals. This has been hardwired into humans since we crawled out of caves. In a bit, I’ll share the findings of an interesting study that looked at how this social news spreads through our networks.

The Results of FEED

But first, let’s look at the other results of the study. Despite my morning grumpiness, this is a report worth downloading:

FEED09_Chart-Q1765% of consumers have had a digital experience that either positively or negatively changed their opinion about a brand. Again, this is behavior that is common, we all have perception altering brand experiences. As we spend more time online, it’s natural that this will happen here too.

Branding is now a participatory experience. We’re no longer passive consumers of brand messaging. We now expect to roll up our sleeves, get in and muck around with the building of brands. We want to do things with the brand. We will now participate in building the aggregate story of a brand. 73% of study participants had posted a product or brand review on web sites like Amazon, Yelp, Facebook or Twitter. We now have a voice and we’re using it.

We’re becoming Brand Fans. 40% of consumers have “friended” a brand on Facebook and/or MySpace and 26% of followed a brand on Twitter. Again, this isn’t new, it’s just going digital. There are certain brands that inspire fierce loyalty: Apple, Harley Davidson, Nike. It’s natural that these Brand Fans would now be expressing themselves online. One word of caution for Brand Marketers here. People won’t suddenly become fans just because you’re on FaceBook. You have to be a brand that people care about.

FEED09_Chart-Q27Here’s the study tidbit that was “surprising”. Of those that follow brands on Twitter, 44% said access to exclusive deals is the main reason. Same is true for those that “friended” a brand on Facebook or MySpace..accounting for 37% of participants. The next highest reason for following a brand on Twitter? Being a current customer, at 23.5% And again, this would be for those brands that inspire an unusually high degree of loyalty.

Strength of Weak Ties

Sometime ago, I talked about a fascinating study by Frenzen and Nakamoto that looked at how rumors, or in this case, news of a bargain, spread through social networks. It explored the roll of Mark Granovetter’s famous “Weak Ties” in social networks. Social networks tend to be “clumpy”, rather than uniformly dense. There are dense clumps, representing our families, closest friends and co-workers that we see every day. You’re connected to these people with “Strong Ties”. But the clumps are also connected with “Weak ties” that span the gaps. These are ties between more distant family, casual friends and acquaintances. As Granovetter discovered, news spreads quickly through the strong ties within a clump, but it’s the ability to jump the weak ties that really causes word to spread throughout the network. We rely on the “connectedness” of these weak ties for things like news on potential jobs, social tidbits and yes, the scoop on a great bargain. If you look at the nature of these weak ties, you’ll realize that it’s exactly those types of ties we tend to maintain on Twitter and Facebook.

In 1993, Jonathon Frenzen and Kent Nakamoto decided to explore the conditions that had to exist for news to jump from cluster to cluster across those weak ties. They tested the nature of the message itself and also how the news would impact the person delivering the message, a condition called moral hazard. In other words, would the messenger lose something by spreading the word? The scenario they used to test the conditions for this social “viralness” was news of a sale. There were three variables built into the study: the structure of the network itself (strongly connected vs weakly connected), the attractiveness of the sale (20% off vs 50 to 70% off) and the availability of the sale item (unlimited vs very limited quantities – introducing the aspect of moral hazard).

Frenzen and Nakamoto found that in all cases, news of the sale spread quickly through the strong clusters. But when the message wasn’t that remarkable (the 20% off example), word of mouth had difficulty jumping across weak ties. Also, when moral hazard was high (quantities were limited) again, the message tended to get stuck within a cluster and not be transmitted across the weak ties. If you look back at the original post, I go into more depth about how this impacts our inclination to spread news through our networks.

Twitter: The Weak Tie Pipeline

So, let’s take this back to the Razorfish study. There needs to be a few conditions present for news to spread along weak ties: The information has to be valuable (50 to 70% off) and it can’t put the person holding the information in moral hazard (if I share this information amongst too many people, there will be nothing left for me or my family). The example given in the study, following a Brand on Twitter to get news of exclusive offers, is our “weak tie” to the brand, so we can be first to benefit. And, if the discount is substantial and there is low moral hazard, we will in turn Tweet about it ourselves.

The Razorfish study indicated surprise that more people were engaging in social networks to learn about discounts and not to evangelize brands. Again, if we look at human behavior, there is no surprise here. Brand evangelization engages a completely different part of our brain, the same part, incidentally, that gets triggered when we talk about religion and other unusually strong beliefs. These are things most of us hold closer to our chest. We share them with our strong ties, but we don’t usually spread that across weak ties. There are exceptions, of course, but I think most marketers assume all of us are willing to build public shrines to their products. That’s just not how humans tick.

But, humans can’t resist spreading the word if that word has social value (a great bargain) and we don’t miss out ourselves by spreading the word. Those are the messages built to set Granovetter’s weak ties singing in a social network. We’ve been this way for a long, long time. And now that Twitter and FaceBook are here, we’ll still be that way.

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