Managing 'word-of-mouth'. (On Marketing).

"I GET BUSINESS THROUGH word-of-mouth." I used to hear that all the time, especially back when I was selling radio advertising. Certainly, word-of-mouth and referrals can be powerful for your business, especially when consumers either feel overloaded with information or can't easily evaluate all of their alternatives.

The subject of word-of-mouth communication, or "buzz," is getting more attention among marketers. We are beginning to appreciate its power. It also is becoming clear that buzz isn't a random force; rather, it tends to begin and grow according to basic principles. If you understand the principles, you can help orchestrate buzz for your business.

First, I think it's wise to appreciate the difference between "buzz" (in which people talk about you) and "referrals" (through which people recommend your product or service to others). At some level, it's easy to simply generate talk. People tend to talk about those things that are novel, vivid and/or negative. Put those elements together (for example, by tattooing the company logo all over yourself and then walking along Capitol Avenue during February in nothing but your undies) and you'll certainly get people talking. However, buzz that is beneficial requires that people not only talk but that they also say the things you'd like them to say.

So, how do people use buzz? Consumers use word-of-mouth recommendations for different purposes, depending upon the situation. According to a team of researchers whose work appeared in the Journal of the Academy of Marketing Science, consumers use input from people they know well for reassurance on personal aspects of a decision (e.g. "Do you think I'd like that restaurant?").

On the other hand, consumers can be influenced by acquaintances or even strangers for more objective information (e.g. "How much are the entrees at that restaurant?"). The point is that, in different settings, useful word-of-mouth can come from almost any source.

Could your business benefit? In an article in the Harvard Business Review, McKinsey & Co. consultant Renee Dye claims that 13 percent of American businesses are largely driven by buzz, while 54 percent are partially driven by buzz and only 33 percent are immune to it. Industries such as toys, sporting goods, fashion, broadcasting and entertainment are the most buzz-centered. Dye says that even supposedly stodgy businesses such as investments, lodging, publishing, health care and pharmaceuticals are affected by buzz.

Here are some ideas on generating -- and managing -- a "strategic buzz" for your business:

* Determine whether your business is a good candidate for buzz marketing. Is your product unique in some way (look, price, function or ease of use)? For example, the Chrysler PT cruiser generated buzz from its look. Further, is your product visible? Some products (such as fashion clothing) are inherently visible, while others (such as Viagra) can be made visible through the influence of media coverage and Internet discussion forums.

* Seek, and seed, the opinion leaders. Years ago, researchers discovered that a relatively small percentage of the population carries a big influence on public opinion. Smart marketers use observation and interviews to find the consumer opinion leaders in their industry, then they aggressively get information and the product into those consumers' hands. Dye cites the example of Abercrombie & Fitch, which recruits college students from popular fraternities and sororities to work in its stores (and, by extension, to wear A&F clothes).

* Use popular lists to your advantage. Lists are great for establishing buzz because they're easy for data-overloaded consumers to notice and understand. Movie producers place huge importance on weekly box-office figures, because those lists (widely reported in the news) establish which movies are hot and which are going to the discount rental bin. Closer to home, there are several "top" lists generated d by the media -- and many Arkansas businesses have benefited from coming out on top of someone's list.

Effective buzz marketing begins with an understanding of who's talking (and listening) in your target market then progresses to a few effective tactics. Do these things well and your ears will be burning.

Jim Karrh, Ph.D., is assistant professor of marketing and advertising in the University of Arkansas at Little Rock's College of Business Administration as well as a marketing consultant. E-mail him at [e-mail].