Ever Heard of a Social Network Analyst?

You Should! Let me Introduce You to Scott…

The first time I ever met Scott Degraffenreid was at a business networking conference back in late 2003. I took one brief glance at his badge and asked him if his name was really “Scott Decaffeinated.” Turns out it wasn’t once I took a closer look.

But boy, would that ever have been a misnomer. Scott is one heckuva busy and energetic guy, and everyone reading this needs to know what this amazing fellow does. (But don’t worry, you won’t ever have to learn how to pronounce his last name correctly to benefit from his expertise.)

The Boon of Referral Marketing

Scott calls himself a “Social Network Analyst.” I’m betting that you’ve never met one before. He crafts referral marketing strategies for entrepreneurs and others whose businesses depend upon getting the word out. (Let’s see, according to my calculations, that would be just about everyone outside of covert military operations.)

Referral marketing is on a big upswing in today’s business world, supplanting other kinds of traditional marketing and advertising. Its magic lies in the fact that receiving a referral from a known and trusted person is worth many levels of magnitude more than a cold advertisement that you see on a billboard or TV screen.

In fact, some of Scott’s clients no longer use any other advertising at all. They have adopted his word-of-mouth approach, and use it exclusively to market their businesses. Others combine Scott’s methods with a few more traditional means for a power-packed punch. Don Levy, founder of SkyWi, says, “Scott’s work is the glue that ties all of our marketing and advertising processes into real quantifiable results.” Scott’s website claims that almost any business can more than triple referrals with little cost and minimal effort. The successes of his impressive list of clients lend incredible credence to his catch phrase, “People are the new media.”

When you hire Scott to develop a referral marketing strategy for you, he’ll base his analysis upon the following three criteria:

1. The referrability of your product or service. Scott determines this from the NUDE model he has developed, a concept I’ll explain in a moment. (And yes, this acronym is but one of many tongue-in-cheek gags that he uses to keep his audiences giggling.)
2. How to select the right networks to target. Not all are equally effective, of course. He helps you learn the important distinction between a market, a group of people with a shared characteristic or interest (e.g. all baby-boomers who believe that Paul was the cutest), and a network, a group of people with a shared conversation or contact (e.g. everyone in your bridge group).
3. How to design the most appropriate LGM or “Looking-Good Message” for a given network. The right message changes depending upon the audience, of course. When done correctly, it enhances the standing of both the referred company and the referrer.

Whereas I can’t spill the beans about all three of these in this article (you’ll need to hire him or buy his book to learn the full scoop), let me delve into the first one to show why some companies are more talked about than others.

Judging a product’s referrability

Scott’s analysis starts out by establishing just how referrable a product or service actually is. He determines this by applying scores to its Novelty, Utility, Dependability, and Economy, four items that create quite a convenient acronym. This NUDE Model, as Scott calls it, forms the crux of judging just how likely people are to refer you to others in their network.

The most important factor he stressed is that however novel, useful, dependable, or economic your product may actually be is totally irrelevant. The score for each item is determined all on what the referring party believes about you. Managing their perceptions is the real key to achieving a viral result.

My company, Allegro Multimedia, has a product that I’d like to be on the lips of every shopper in the country. Piano Wizard (www.EvenYouCanPlay.com) is a fun and simple video game that can teach anyone 3 through adult how to play the piano and read music. Since I think it’s the hottest toy on the planet, I asked Scott to put it through the paces and tell me how referrable we really are.

Needing a target audience for this example, I told Scott to pretend that Piano Wizard will be referred inside of a local network of moms who get together on a regular basis.

Novelty: What sets it apart?

New and novel features that set you apart, what Scott calls “contextual novelty,” are always good for creating a buzz and greatly raising your chances of being referred inside networks. So what would a group of moms find novel about Piano Wizard?

How about the fact that video games are fun, and moms will never have to nag their budding pianists to practice anymore? As Scott noted, it’s “one more Mom thing they don’t have to do.” Scott quickly scored us a 90% in this category, noting that kids are gaining a valuable skill while feeding their video addiction, and they’re learning how to read music to boot.

Remember that your product doesn’t have to have something new, just something novel. And maintaining this contextual novelty will keep your name on the grapevine.

Utility: How is it useful?

Scott then looked at how useful a Piano Wizard game might be for our example mom network. He was quick to point out that moms are always looking for ways to establish themselves as good parents. Having your kids learn music, a skill that lasts a lifetime, is a great indicator of a good mom. He gave us a healthy 80% in this category, recognizing the fact that music education helps kids perform better in school also.

This category in particular is tailored directly to the audience. If my audience were the buyers of a music store chain, this particular utility feature wouldn’t rate quite as high. Instead, I might look to the fact that our software helps them sell more electronic keyboards, a feature very useful for that particular network.

Dependability: How long does it hold its value?

This category in particular has a lot to do with previous experiences. Though it may not be warranted, you might get dinged by other products like yours that didn’t necessarily fare that well. For example, Scott commented that if others had ever used a music product that didn’t work, they may be apt to subconsciously rate us lower on dependability.

The truth is, Piano Wizard is quite scalable: you can add new songs and make existing ones more challenging, all working to increase your score. You don’t ever outgrow it. But while I’m well aware of these truths about the product, they may be lost in the eyes of the beholder who remembers well the broken keyboard on the floor of his grandma’s closet that he could no longer play. These memories create a subconscious skepticism, especially of a company he hasn’t heard of before. He may be somewhat discouraged to give an enthusiastic introduction to others.

But due to the lifelong nature of Piano Wizard, Scott gave us a 70%, reminding me that young companies, with little history of long-term dependability to fall back on, often score slightly lower in this category.

Economy: Balancing the effort-to-outcome ratio

Economy means more than just the dollars paid. It’s judging whether the customer gets value in exchange for the money, time, and convenience expended. Scott calls this the “effort-to-outcome ratio.” In our case, the game costs considerably less than live piano lessons, and is more convenient. But when compared to a Slinky, a software and electronic keyboard bundle is not a cheap toy for a child and does require extra hardware.

Scott balanced it out by giving us a score of 75% here.

Totaling our score

(And if you’re thinking our scores are quite a coincidence, Scott confessed to me that he fudged our numbers in this example to make them add up to 315!)

What this means for you

We all know the great power of networks and networking. And that it’s the referrals of others into those networks that can add exponential growth to a business. Scott’s analysis of managing these referral networks and setting up a viral marketing approach have helped many entrepreneurial ventures explode, without the typical expense of advertising.

To learn more about Scott’s work and to read one of his books, check out his website at www.NecessaryMeasures.com. Click here for Adam's article with Scott Degraffenreid concerning the Millennials.

Thank you for taking the time out of your busy day to read me on The National Networker! Please let me know if an article that you've read here today has helped you in any way.

Contact Jan at JanA@TheNationalNetworker.com or via TNNW Blog.
 

Sign up for our newsleter;
Email a friend.

Go to: Site Map