"THE ANATOMY OF BUZZ".

Yes, people are talking about you. Hundreds and perhaps thousands of people--customers, employees, investors, competitors, suppliers, and the press--gossip constantly about the companies they work with. And the result is a buzz of news and opinion that inevitably shapes a company's reputation in the marketplace, often completely drowning out the official company line.

Yet top management is usually blind to the importance of gossip, says buzz expert Emanuel Rosen. "It's hard for some marketers to accept the fact that information spreads in nonlinear ways they can't always control," he says. "The concept contradicts a nice linear paradigm: That by buying advertising, marketers can spread messages directly to an accepting public."

Still, a few pioneers are beginning to find that buzz can be turned into a powerful tool. Rosen, a former software marketer who saw his own product catch on through an underground network of referrals, has dug through 40 years of semi-obscure research about how ideas, stories, and reputations are spread. Drawing on this research in a new book called The Anatomy of Buzz, Rosen has built a detailed model that shows how people called "hubs" shape the opinions of everyone else within their "social networks." There's no magic formula for managing this process, Rosen admits, but there are definitely tactics that influence how people talk about events, product seeding campaigns, celebrity executives, great customer service, and other buzz-worthy topics. A few excerpts:

H On the hero factor: "An essential element in a good story is a main character. Connect a person to a product--be it a movie, a car, whatever--and you jumpstart buzz. By increasing the visibility of an executive, a company can turn him or her into a mega-hub, someone with special access and credibility with millions of other people. If one company is represented in customers' minds by its brand name alone and another is represented by its brand name as well as by a mega-hub, which do you think people will remember better?"

H On dealing with Internet-centric users: "The more connected your customers are to each other, the more you depend on their buzz for future business. Look at a company like Cisco that has always served a tightly connected customer base: Almost by definition, all of its customers (network administrators and information technology managers) are heavy users of the Internet. What this connectivity means to Cisco is that they have to be very open and direct with their customers. If they screw up, their customers will find out about it within minutes."

H On the intensity factor: "The emotional involvement a customer has with a product is a good predictor of how many people he or she will tell about an experience. Since many people have strong feelings about their cars, they may share related information with a higher number of friends [than they would about incompetent service at a local supermarket]. Another issue affecting the number of people to whom customers spread the word is privacy: People may tell fewer of their friends about financial services and health care."

H On moving beyond industry buzz: "If you want to hear the industry buzz in Silicon Valley, you go to Il Fornaio in Palo Alto or Buck's in Woodside for breakfast. You'll actually hear the humming buzz of dozens of men and women, all talking about different aspects of the same industry. Give [a rumor] another hour and the word will spread by cellular phone and e-mail to the rest of the Valley, where some seven thousand technology companies are concentrated in a fifty-mile corridor. But what excites the crowd at Il Fornaio or Buck's may be met with a yawn by actual customers. If at some point this industry buzz doesn't become customer buzz, you may have a problem. Ultimately customers are the people who have to recommend your product to their friends."

H On getting the message across: "You may be very proud of your product or the level of service you provide, but your pride won't help buzz spread. Your customers need to feel the difference. A very simple way to find out if they do is to talk to them. If they can't tell you what's unique about your product, they won't be able to explain it to their friends. Car dealerships that offer one-price shopping view it as a great advantage and expect customers to pass on their impression. In conducting surveys for some one-price dealerships, however, it was found that 30%-35% of the people who bought cars from these dealerships didn't realize they were at a one-price dealership."

Emanuel Rosen, The Anatomy of Buzz, Doubleday, $24.95. Web: www.emanuel-rosen.com.