Contagious 1. Social Currency
Among the brownstones and vintage shops on St. Mark’s Place near Tompkins Square Park in New York City, you’ll notice a small eatery. It’s marked by a large red hot-dog-shaped sign with the words “eat me” written in what looks like mustard. Walk down a small flight of stairs and you’re in a genuine old hole-in-the-wall hot dog restaurant. The long tables are set with all your favorite condiments, you can play any number of arcade-style video games, and, of course, order off a menu to die for.

Seventeen varieties of hot dogs are offered. Every type of frankfurter you could imagine. The Good Morning is a bacon-wrapped hot dog smothered with melted cheese and topped with a fried egg. The Tsunami has teriyaki, pineapple, and green onions. And purists can order the New Yorker, a classic grilled all-beef frankfurter.

But look beyond the gingham tablecloths and hipsters enjoying their dogs. Notice that vintage wooden phone booth tucked into the corner? The one that looks like something Clark Kent might have dashed into to change into Superman? Go ahead, peek inside.

You’ll notice an old-school rotary dial phone hanging on the inside of the booth, the type that has a finger wheel with little holes for you to dial each number. Just for kicks, place your finger in the hole under the number 2 (ABC). Dial clockwise until you reach the finger stop, release the wheel, and hold the receiver to your ear.

To your astonishment, someone answers. “Do you have a reservation?” a voice asks. A reservation?

Yes, a reservation. Of course you don’t have one. What would you even need a reservation for? A phone booth in the corner of a hot dog restaurant?

But today is your lucky day, apparently: they can take you. Suddenly, the back of the booth swings open—it’s a secret door!—and you are let into a clandestine bar called, of all things, Please Don’t Tell.

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In 1999, Brian Shebairo and his childhood friend Chris Antista decided to get into the hot dog business. The pair had grown up in New Jersey eating at famous places like Rutt’s Hut and Johnny & Hanges and wanted to bring that same hot dog experience to New York City. After two years of R & D, riding their motorcycles up and down the East Coast tasting the best hot dogs, Brian and Chris were ready. On October 6, 2001, they opened Crif Dogs in the East Village. The name coming from the sound that poured out of Brian’s mouth one day when he tried to say Chris’s name while still munching on a hot dog.

Crif Dogs was a big hit and won the best hot dog award from a variety of publications. But as the years passed, Brian was looking for a new challenge. He wanted to open a bar. Crif Dogs had always had a liquor license but had never taken full advantage of it. He and Chris had experimented with a frozen margarita machine, and kept a bottle of Jägermeister in the freezer every once in a while, but to do it right they really needed more space. Next door was a struggling bubble tea lounge. Brian’s lawyer said that if they could get the space, the liquor license would transfer. After three years of consistent prodding, the neighbor finally gave in.

But now came the tough part. New York City is flush with bars. In a four-block radius around Crif Dogs there are more than sixty places to grab a drink. A handful are even on the same block. Originally, Brian had a grungy rock-and-roll bar in mind. But that wouldn’t cut it. The concept needed be something more remarkable. Something that would get people talking and draw them in.

One day Brian ran into a friend who had an antique business. A big outdoor flea market selling everything from art deco dressers to glass eyes and stuffed cheetahs. The guy said he had found a neat old 1930s phone booth that he thought would work well in Brian’s bar.

Brian had an idea.

When Brian was a kid, his uncle worked as a carpenter. In addition to helping to build houses and the usual things that carpenters do, the uncle built a room in the basement that had secret doors. The doors weren’t even that concealed, just wood that meshed into other wood, but if you pushed in the right place, you could get access to a hidden storage space. No secret lair or loot concealed inside, but cool nonetheless.

Brian decided to turn the phone booth into the door to a secret bar.

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Everything about Please Don’t Tell suggests that you’ve been let into a very special secret. You won’t find a sign posted on the street. You won’t find it advertised on billboards or in magazines. And the only entrance is through a semihidden phone booth inside a hot dog diner.

Of course, this makes no sense. Don’t marketers preach that blatant advertising and easy access are the cornerstones of a successful business?

Please Don’t Tell has never advertised. Yet since opening in 2007 it has been one of the most sought-after drink reservations in New York City. It takes bookings only the day of, and the reservation line opens at 3:00 p.m., sharp. Spots are first-come, first-served. Callers madly hit redial again and again in the hopes of cutting through the busy signals. By 3:30 all spots are booked.

Please Don’t Tell doesn’t push market. It doesn’t try to hustle you in the door or sell you with a flashy website. It’s a classic “discovery brand.” Jim Meehan, the wizard behind Please Don’t Tell’s cocktail menu, designed the customer experience with that goal in mind. “The most powerful marketing is personal recommendation,” he said. “Nothing is more viral or infectious than one of your friends going to a place and giving it his full recommendation.” And what could be more remarkable than watching two people disappear into the back of a phone booth?

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In case it’s not already clear, here’s a little secret about secrets: they tend not to stay secret very long.

Think about the last time someone shared a secret with you. Remember how earnestly she begged you not to tell a soul? And remember what you did next?

Well, if you’re like most people, you probably went and told someone else. (Don’t be embarrassed, your secret is safe with me.) As it turns out, if something is supposed to be secret, people might well be more likely to talk about it. The reason? Social currency.

People share things that make them look good to others.
MINTING A NEW TYPE OF CURRENCY
Kids love art projects. Whether drawing with crayons, gluing elbow macaroni to sheets of construction paper, or building elaborate sculptures out of recyclables, they revel in the joy of making things. But whatever the type of project, media, or venue, kids all seem to do the same thing once they are finished.

They show someone else.

“Self-sharing” follows us throughout our lives. We tell friends about our new clothing purchases and show family members the op-ed piece we’re sending to the local newspaper. This desire to share our thoughts, opinions, and experiences is one reason social media and online social networks have become so popular. People blog about their preferences, post Facebook status updates about what they ate for lunch, and tweet about why they hate the current government. As many observers have commented, today’s social-network-addicted people can’t seem to stop sharing—what they think, like, and want—with everyone, all the time.

Indeed, research finds that more than 40 percent of what people talk about is their personal experiences or personal relationships. Similarly, around half of tweets are “me” focused, covering what people are doing now or something that has happened to them. Why do people talk so much about their own attitudes and experiences?

It’s more than just vanity; we’re actually wired to find it pleasurable. Harvard neuroscientists Jason Mitchell and Diana Tamir found that disclosing information about the self is intrinsically rewarding. In one study, Mitchell and Tamir hooked subjects up to brain scanners and asked them to share either their own opinions and attitudes (“I like snowboarding”) or the opinions and attitudes of another person (“He likes puppies”). They found that sharing personal opinions activated the same brain circuits that respond to rewards like food and money. So talking about what you did this weekend might feel just as good as taking a delicious bite of double chocolate cake.

In fact, people like sharing their attitudes so much that they are even willing to pay money to do it. In another study, Tamir and Mitchell asked people to complete a number of trials of a basic choice task. Participants could choose either to hang out for a few seconds or answer a question about themselves (such as “How much do you like sandwiches?”) and share it with others. Respondents made hundreds of these quick choices. But to make it even more interesting, Tamir and Mitchell varied the amount that people got paid for choosing a particular option. In some trials people could get paid a couple of cents more for choosing to wait for a few seconds. In others they could get paid a couple of cents more for choosing to self-disclose.

The result? People were willing to forgo money to share their opinions. Overall, they were willing to take a 25 percent pay cut to share their thoughts. Compared with doing nothing for five seconds, people valued sharing their opinion at just under a cent. This puts a new spin on an old maxim. Maybe instead of giving people a penny for their thoughts, we should get paid a penny for listening.

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It’s clear that people like to talk about themselves, but what makes people talk about some of their thoughts and experiences more than others?

Play a game with me for a minute. My colleague Carla drives a minivan. I could tell you many other things about her, but for now, I want to see how much you can deduce based solely on the fact that she drives a minivan. How old is Carla? Is she twenty-two? Thirty-five? Fifty-seven? I know you know very little about her, but try to make an educated guess.

Does she have any kids? If so, do they play sports? Any idea what sports they play?

Once you’ve made a mental note of your guesses, let’s talk about my friend Todd. He’s a really cool guy. He also happens to have a Mohawk. Any idea what he’s like? How old he is? What type of music he likes? Where he shops?

I’ve played this game with hundreds of people and the results are always the same. Most people think Carla is somewhere between thirty and forty-five years old. All of them—yes, 100 percent—believe she has kids. Most are convinced those kids play sports, and almost everyone who believes that guesses that soccer is the sport of choice. All that from a minivan.

Now Todd. Most people agree that he’s somewhere between fifteen and thirty. The majority guess that he’s into some sort of edgy music, whether punk, heavy metal, or rock. And almost everyone thinks he buys vintage clothes or shops at some sort of surf/skate store. All this from a haircut.

Let’s be clear. Todd doesn’t have to listen to edgy music or shop at Hot Topic. He could be fifty-three years old, listen to Beethoven, and buy his clothes at any other place he wanted. It’s not like Gap would bar the door if he tried to buy chinos.

The same thing is true of Carla. She could be a twenty-two-year-old riot grrrl who plays drums and believes kids are for the boring bourgeoisie.

But the point is that we didn’t think those things about Carla and Todd. Rather, we all made similar inferences because choices signal identity. Carla drives a minivan, so we assumed she was a soccer mom. Todd has a Mohawk, so we guessed he’s a young punk-type guy. We make educated guesses about other people based on the cars they drive, the clothes they wear, and the music they listen to.

What people talk about also affects what others think of them. Telling a funny joke at a party makes people think we’re witty. Knowing all the info about last night’s big game or celebrity dance-off makes us seem cool or in the know.

So, not surprisingly, people prefer sharing things that make them seem entertaining rather than boring, clever rather than dumb, and hip rather than dull. Consider the flip side. Think about the last time you considered sharing something but didn’t. Chances are you didn’t talk about it because it would have made you (or someone else) look bad. We talk about how we got a reservation at the hottest restaurant in town and skip the story about how the hotel we chose faced a parking lot. We talk about how the camera we picked was a Consumer Reports Best Buy and skip the story about how the laptop we bought ended up being cheaper at another store.

Word of mouth, then, is a prime tool for making a good impression—as potent as that new car or Prada handbag. Think of it as a kind of currency. Social currency. Just as people use money to buy products or services, they use social currency to achieve desired positive impressions among their families, friends, and colleagues.

So to get people talking, companies and organizations need to mint social currency. Give people a way to make themselves look good while promoting their products and ideas along the way. There are three ways to do that: (1) find inner remarkability; (2) leverage game mechanics; and (3) make people feel like insiders.
INNER REMARKABILITY
Imagine it’s a sweltering day and you and a friend stop by a convenience store to buy some drinks. You’re tired of soda but you feel like something with more flavor than just water. Something light and refreshing. As you scan the drink case, a pink lemonade Snapple catches your eye. Perfect. You grab it and take it up to the cash register to pay.

Once outside, you twist the top off and take a long drink. Feeling sufficiently revitalized, you’re about to get in your friend’s car when you notice something written on the inside of the Snapple cap.

Real Fact # 27: A ball of glass will bounce higher than a ball of rubber.

Wow. Really?

You’d probably be pretty impressed (after all, who even knew glass could bounce), but think for a moment about what you’d do next. What would you do with this newfound tidbit of information? Would you keep it to yourself or would you tell your friend?

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In 2002, Marke Rubenstein, executive VP of Snapple’s ad agency, was trying to think of new ways to entertain Snapple customers. Snapple was already known for its quirky TV ads featuring the Snapple Lady, a peppy, middle-aged woman with a thick New York accent, who read and answered letters from Snapple fans. She was a real Snapple employee, and the letter writers ranged from people asking for dating advice to people soliciting Snapple to host a soiree at a senior citizens home. The ads were pretty funny, and Snapple was looking for something similarly clever and eccentric.

During a marketing meeting, someone suggested that the space under the cap was unused real estate. Snapple had tried putting jokes under the cap with little success. But the jokes were terrible (“If the #2 pencil is the most popular, why is it still #2?”), so it was hard to tell if it was the strategy or the jokes that were failing. Rubenstein and her team wondered whether real facts might work better. Something “out of the ordinary that [Snapple drinkers] wouldn’t know and wouldn’t even know they’d want to know.”

So Rubenstein and her team came up with a long list of clever trivia facts and began putting them under the caps—visible only after customers have purchased and opened the bottles.

Fact #12, for example, notes that kangaroos can’t walk backward. Fact #73 says that the average person spends two weeks over his/her lifetime waiting for traffic lights to change.

These facts are so surprising and entertaining that it’s hard not to want to share them with someone else. Two weeks waiting for the light to change? That’s unbelievable! How do they even calculate something like that? Think of what else we could do with that time! If you’ve ever happened to drink a Snapple with a friend, you’ll find yourself telling each other which fact you received—similar to what happens when your family breaks open fortune cookies after a meal at a Chinese restaurant.

Snapple facts are so infectious that they’ve become embedded in popular culture. Hundreds of websites chronicle the various facts. Comedians poke fun at them in their routines. Some of the facts are so unbelievable that people even debate back and forth whether they are actually correct. (Yes, the idea that kangaroos can’t walk backward does seem pretty crazy, but it’s true.)

Did you know that frowning burns more calories than smiling? That an ant can lift fifty times its own weight? You probably didn’t. But people share these and similar Snapple facts because they are remarkable. And talking about remarkable things provides social currency.

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Remarkable things are defined as unusual, extraordinary, or worthy of notice or attention. Something can be remarkable because it is novel, surprising, extreme, or just plain interesting. But the most important aspect of remarkable things is that they are worthy of remark. Worthy of mention. Learning that a ball of glass will bounce higher than a ball of rubber is just so noteworthy that you have to mention it.

Remarkable things provide social currency because they make the people who talk about them seem, well, more remarkable. Some people like to be the life of the party, but no one wants to be the death of it. We all want to be liked. The desire for social approval is a fundamental human motivation. If we tell someone a cool Snapple fact it makes us seem more engaging. If we tell someone about a secret bar hidden inside a hot dog restaurant, it makes us seem cool. Sharing extraordinary, novel, or entertaining stories or ads makes people seem more extraordinary, novel, and entertaining. It makes them more fun to talk to, more likely to get asked to lunch, and more likely to get invited back for a second date.

Not surprisingly, then, remarkable things get brought up more often. In one study, Wharton professor Raghu Iyengar and I analyzed how much word of mouth different companies, products, and brands get online. We examined a huge list of 6,500 products and brands. Everything from big brands like Wells Fargo and Facebook to small brands like the Village Squire Restaurants and Jack Link’s. From every industry you can imagine. Banking and bagel shops to dish soaps and department stores. Then we asked people to score the remarkability of each product or brand and analyzed how these perceptions were correlated with how frequently they were discussed.

The verdict was clear: more remarkable products like Facebook or Hollywood movies were talked about almost twice as often as less remarkable brands like Wells Fargo and Tylenol. Other research finds similar effects. More interesting tweets are shared more, and more interesting or surprising articles are more likely to make the New York Times Most E-Mailed list.

Remarkability explains why people share videos of eight-year-old girls flawlessly reciting rap lyrics and why my aunt forwarded me a story about a coyote who was hit by a car, got stuck in the bumper for six hundred miles, and survived. It even explains why doctors talk about some patients more than others. Every time there is a patient in the ER with an unusual story (such as someone swallowing a weird foreign object), everyone in the hospital hears about it. A code pink (baby abduction) makes big news even if it’s a false alarm, while a code blue (cardiac arrest) goes largely unmentioned.

Remarkability also shapes how stories evolve over time. A group of psychologists from the University of Illinois recruited pairs of students for what seemed like a study of group planning and performance. Students were told they would get to cook a small meal together and were escorted to a real working kitchen. In front of them were all the ingredients necessary to cook a meal. Piles of leafy green vegetables, fresh chicken, and succulent pink shrimp, all ready to be chopped and thrown into a pan.

But then things got interesting. Hidden among the vegetables and chicken, the researchers had planted a small—but decidedly creepy—family of cockroaches. Eww! The students shrieked and recoiled from the food.

After the bedlam subsided, the experimenter said that someone must be playing a joke on them and quickly canceled the study. But rather than send people home early, he suggested that they go participate in another study that was (conveniently) taking place just next door.

They all walked over, but along the way they were quizzed about what had happened during the aborted experiment. Half were asked by the experimenter, while the other half were asked by what seemed like another student (who was actually covertly helping the experimenter).

Depending on whom participants happened to tell the story to, it came out differently. If they were talking to another student—that is, if they were trying to impress and entertain rather than simply report the facts—the cockroaches were larger, more numerous, and the entire experience more disgusting. The students exaggerated the details to make the story more remarkable.

We’ve all had similar experiences. How big was the trout we caught last time we went fishing in Colorado? How many times did the baby wake up crying during the night?

Often we’re not even trying to exaggerate; we just can’t recall all the details of the story. Our memories aren’t perfect records of what happened. They’re more like dinosaur skeletons patched together by archeologists. We have the main chunks, but some of the pieces are missing, so we fill them in as best we can. We make an educated guess.

But in the process, stories often become more extreme or entertaining, particularly when people tell them in front of a group. We don’t just guess randomly, we fill in numbers or information to make us look good rather than inept. The fish doubles in size. The baby didn’t wake just twice during the night—that wouldn’t be remarkable enough—she woke seven times and required skillful parenting each time to soothe her back to sleep.

It’s just like a game of telephone. As the story gets transmitted from person to person, some details fall out and others are exaggerated. And it becomes more and more remarkable along the way.

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The key to finding inner remarkability is to think about what makes something interesting, surprising, or novel. Can the product do something no one would have thought possible (such as blend golf balls like Blendtec)? Are the consequences of the idea or issue more extreme than people ever could have imagined?

One way to generate surprise is by breaking a pattern people have come to expect. Take low-cost airlines. What do you expect when you fly a low-cost carrier? Small seats, no movies, limited snacks, and a generally no-frills experience. But people who fly JetBlue for the first time often tell others because the experience is remarkably different. You get a large, comfortable seat, a variety of snack choices (from Terra Blues chips to animal crackers), and free DIRECTV programming from your own seat-back television. Similarly, by using Kobe beef and lobster, and charging one hundred dollars, Barclay Prime got buzz by breaking the pattern of what people expected from a cheesesteak.

Mysteries and controversy are also often remarkable. The Blair Witch Project is one of the most famous examples of this approach. Released in 1999, the film tells the story of three student filmmakers who hiked into the mountains of Maryland to film a documentary about a local legend called the Blair Witch. They supposedly disappeared, however, and viewers were told that the film was pieced together from “rediscovered” amateur footage that was shot on their hike. No one was sure if this was true.

What do we do when confronted with a controversial mystery like this? Naturally, we ask others to help us sort out the answer. So the film garnered a huge buzz simply from people wondering whether it depicted real events or not. It undermined a fundamental belief (that witches don’t exist), so people wanted the answer, and the fact that there was disagreement led to even more discussion. The buzz drove the movie to become a blockbuster. Shot on a handheld camera with a budget of about $35,000, the movie grossed more than $248 million worldwide.

The best thing about remarkability, though, is that it can be applied to anything. You might think that a product, service, or idea would have to be inherently remarkable—that remarkability isn’t something you can impose from the outside. New high-tech gadgets or Hollywood movies are naturally more remarkable than, say, customer service guidelines or toasters. What could be remarkable about a toaster?

But it’s possible to find the inner remarkability in any product or idea by thinking about what makes that thing stand out. Remember Blendtec, the blender company we talked about in the Introduction? By finding the product’s inner remarkability, the company was able to get millions of people to talk about a boring old blender. And they were able to do it with no advertising and a fifty-dollar marketing budget.

Toilet paper? Hardly seems remarkable. But a few years ago I made toilet paper one of the most talked-about conversation topics at a party. How? I put a roll of black toilet paper in the bathroom. Black toilet paper? No one had ever seen black toilet paper before. And that remarkability provoked discussion. Emphasize what’s remarkable about a product or idea and people will talk.
LEVERAGE GAME MECHANICS
I was short by 222 miles.

A few years ago I was booking a round-trip flight from the East Coast to California. It was late December, and the end of the year is always slow, so it seemed like a perfect time to visit friends. I went online, scanned a bunch of options, and found a direct flight that was cheaper than the connecting ones. Lucky me! I went to go find my credit card.

But as I entered my frequent flier number, information about my status tier appeared on the screen. I fly a decent amount, and the previous year I had flown enough on United Airlines to achieve Premier status. Calling the perks I was receiving “Premier” seemed like a marketing person’s idea of a sick joke, but it was slightly better treatment than you usually get in economy class. I could check bags for free, have access to seats with slightly more leg room, and theoretically get free upgrades to business class (though that never actually seemed to happen). Nothing to write home about, but at least I didn’t have to pay to check a bag.

This year had been even busier. I tend to stick with one airline if I can, and in this case, it seemed it might just pay off. I had almost achieved the next status level: Premier Executive.

But the key word here is “almost.” I was 222 miles short. Even with the direct flights to California and back, I wouldn’t have enough miles to make it to Premier Executive.

The perks for being a Premier Executive were only slightly better than those for Premier. I’d get to check a third bag for free, have access to special airline lounges if I flew internationally, and board the plane seconds earlier than I would have before. Nothing too exciting.

But I was so close! And I had only a few days left to fly the required extra miles. This trip to San Francisco was my last chance.

So I did what people do who are so focused on achieving something that they lose their common sense. I paid more money to book a connecting flight.

Rather than take a direct flight home, I flew a circuitous route, stopping in Boston for two hours just to make sure I had enough miles to make it over the threshold.

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The first major frequent flier program was created in 1981 by American Airlines. Originally conceptualized as a method to give special fares to frequent customers, the program soon morphed into the current system of rewards. Today, more than 180 million people accumulate frequent flier miles when they travel. These programs have motivated millions of people to pledge their loyalty to a single airline and stop over in random cities or fly at inopportune times just to ensure that they accrue miles on their desired carrier.

We all know that miles can be redeemed for free travel, hotel stays, and other perks. Still, most people never cash in the miles they accumulate. In fact, less than 10 percent of miles are redeemed every year. Experts estimate that as many as 10 trillion frequent flier miles are sitting in accounts, unused. Enough to travel to the moon and back 19.4 million times. That’s a lot of miles.

So if they’re not actually using them, why are people so passionate about racking up miles?

Because it’s a fun game.

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Think about your favorite game. It can be a board game, a sport, or even a computer game or an app. Maybe you love solitaire, enjoy playing golf, or go crazy for Sudoku puzzles. Ever stopped to think about why you enjoy these games so much? Why you can’t seem to stop playing?

Game mechanics are the elements of a game, application, or program—including rules and feedback loops—that make them fun and compelling. You get points for doing well at solitaire, there are levels of Sudoku puzzles, and golf tournaments have leaderboards. These elements tell players where they stand in the game and how well they are doing. Good game mechanics keep people engaged, motivated, and always wanting more.

One way game mechanics motivate is internally. We all enjoy achieving things. Tangible evidence of our progress, such as solving a tough Solitaire game or advancing to the next level of Sudoku puzzles, makes us feel good. So discrete markers motivate us to work harder, especially when we get close to achieving them. Take the buy-ten-get-one-free coffee punch cards that are sometimes offered at local cafés. By increasing motivation, the cards actually spur people to buy coffee more frequently as they get closer to their tenth cup and claiming their reward.

But game mechanics also motivate us on an interpersonal level by encouraging social comparison.

A few years ago, students at Harvard University were asked to make a seemingly straightforward choice: which would they prefer, a job where they made $50,000 a year (option A) or one where they made $100,000 a year (option B)?

Seems like a no-brainer, right? Everyone should take option B. But there was one catch. In option A, the students would get paid twice as much as others, who would only get $25,000. In option B, they would get paid half as much as others, who would get $200,000. So option B would make the students more money overall, but they would be doing worse than others around them.

What did the majority of people choose?

Option A. They preferred to do better than others, even if it meant getting less for themselves. They chose the option that was worse in absolute terms but better in relative terms.

People don’t just care about how they are doing, they care about their performance in relation to others. Getting to board a plane a few minutes early is a nice perk of achieving Premier status. But part of what makes this a nice perk is that you get to board before everyone else. Because levels work on two, well, levels. They tell us where we are at any time in absolute terms. But they also make clear where we stand relative to everyone else.

Just like many other animals, people care about hierarchy. Apes engage in status displays and dogs try to figure out who is the alpha. Humans are no different. We like feeling that we’re high status, top dog, or leader of the pack. But status is inherently relational. Being leader of the pack requires a pack, doing better than others.

Game mechanics help generate social currency because doing well makes us look good. People love boasting about the things they’ve accomplished: their golf handicaps, how many people follow them on Twitter, or their kids’ SAT scores. A friend of mine is a Delta Airlines Platinum Medallion member. Every time he flies he finds a way to brag about it on Facebook. Talking about how a guy he saw in the Delta Sky Club lounge is hitting on a waitress. Or mentioning the free upgrade he got to first class. After all, what good is status if no one else knows you have it?

But every time he proudly shares his status, he’s also spreading the word about Delta.

And this is how game mechanics boosts word of mouth. People are talking because they want to show off their achievements, but along the way they talk about the brands (Delta or Twitter) or domains (golf or the SAT) where they achieved.

Building a Good Game

Leveraging game mechanics requires quantifying performance. Some domains like golf handicaps and SAT scores have built-in metrics. People can easily see how they are doing and compare themselves with others without needing any help. But if a product or idea doesn’t automatically do that, it needs to be “gamified.” Metrics need to be created or recorded that let people see where they stand—for example, icons for how much they have contributed to a community message board or different colored tickets for season ticket holders.

Airlines have done this nicely. Frequent flier programs didn’t always exist. True, people have flown commercially for more than half a century. But flying was gamified relatively recently, with airlines recording miles flown and awarding status levels. And because this provides social currency, people love to talk about it.

Leveraging game mechanics also involves helping people publicize their achievements. Sure, someone can talk about how well she did, but it’s even better if there is a tangible, visible symbol that she can display to others. Foursquare, the location-based social networking website, lets users check in at bars, restaurants, and other locations using their mobile devices. Checking in helps people find their friends, but Foursquare also awards special badges to users based on their check-in history. Check in to the same venue more than anyone else in a sixty-day period and you’ll be crowned the mayor of that location. Check in to five different airports and get a Jetsetter badge. Not only are these badges posted on users’ Foursquare accounts, but because they provide social currency, users also prominently display them on their Facebook pages.

Just like my Platinum Medallion friend, people display their badges to show off or because they’re proud of themselves. But along the way they are also spreading the Foursquare brand.

Great game mechanics can even create achievement out of nothing. Airlines turned loyalty into a status symbol. Foursquare made it a mark of distinction to be a fixture at the corner bar. And by encouraging players to post their achievements on Facebook, online game makers have managed to convince people to proclaim loudly—even boast—that they spend hours playing computer games every day.

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Effective status systems are easy to understand, even by people who aren’t familiar with the domain. Being the mayor sounds good, but if you asked most people on the street, I bet they couldn’t tell you whether that is better or worse than having a School Night badge, a Super User badge, or any one of the more than one hundred other badges Foursquare offers.

Credit card companies struggled with the same issue. Gold cards used to be restricted to people who spent heavily and had a stellar credit history. But as companies started offering them to people with all types of credit, the gold card lost its meaning. So companies came up with new options for their truly wealthy customers: the platinum card, the sapphire card, and the diamond card, among others. But which has more status, a diamond or a sapphire card? Is platinum better or worse than sapphire? This bewildering mix of colors, minerals, and exclusive words creates a chaos of consumer confusion such that people don’t know how well they are doing—much less how they compare with anyone else.

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.

Furthermore, as soon as you pay people for doing something, you crowd out their intrinsic motivation. People are happy to talk about companies and products they like, and millions of people do it for free every day, without prompting. But as soon as you offer to pay people to refer other customers, any interest they had in doing it for free will disappear. Customers’ decisions to share or not will no longer be based on how much they like a product or service. Instead, the quality and quantity of buzz will be proportional to the money they receive.

Social incentives, like social currency, are more effective in the long term. Foursquare doesn’t pay users to check in to bars, and airlines don’t give discounts to frequent flier members. But by harnessing people’s desire to look good to others, their customers did these things anyway—and spread word of mouth for free.
PLEASE DON’T TELL? WELL, OKAY. MAYBE JUST ONE PERSON . . .
How do we get people talking and make our products and ideas catch on? One way is to mint social currency. People like to make a good impression, so we need to make our products a way to achieve that. Like Blendtec’s Will It Blend? we need to find the inner remarkability. Like Foursquare or airlines with frequent flier tiers, we need to leverage game mechanics. Like Rue La La, we need to use scarcity and exclusivity to make people feel as if they’re insiders.

The drive to talk about ourselves brings us back full circle to Please Don’t Tell. The proprietors are smart. They understand that secrets boost social currency, but they don’t stop there. After you’ve paid for your drinks, your server hands you a small business card. All black, almost like the calling card of a psychic or wizard. In red script the card simply says “Please Don’t Tell” and includes a phone number.

So while everything else suggests the proprietors want to keep the venue under wraps, at the end of the experience they make sure you have their phone number. Just in case you want to share their secret.

* Note that making access difficult is different from making it impossible. Sure, getting a reservation at Please Don’t Tell is tough, but if people call enough they should be able to snag a reservation. And while Rue La La is open only to members, it recently instituted a policy where even nonmembers can get access by signing up with an e-mail address. Using scarcity and exclusivity early on and then relaxing the restrictions later is a particularly good way to build demand.

Also be wary of how restricting availability can come off as snooty or standoffish. People are used to getting what they want and if they hear “no” too much they may go elsewhere. Jim Meehan at Please Don’t Tell addresses this problem explicitly by instructing his staff that if they need to say “no” they should try to figure out a way to say “no, but.” Such as, “No, we are all booked up at eight-thirty, unfortunately, but how about eleven?” or “No, we don’t have brand X but we have brand Y, would you like to try it?” By managing the disappointment, they maintain the allure while also maintaining customer satisfaction.