Archive for April, 2014

Business Insight 6 degrees of separation?

Wednesday, April 30th, 2014

Six Degrees of separation? – Maybe two?
By Roger La Salle

The six degrees concept essentially says that if we know six people and they all know six people and the chain continues we will in effect be connected to every person in the world.

True this may be, but in fact it is far simpler.

Keep it simple!

Indeed if you know just two people and each of them knows just two new people and each of them the same and so on, in effect this chain, much like a chain letter, will connect you with every person in the world. Just two people is all we need to know!

Of course this is the principle on which multi-level marketing is founded and in many cases has been so successful. But alas, some of our biggest companies are not taking advantage of this simple statistical fact. An advantage that can be developed with a small investment to complement and use to better effect the often vast advertising spend of large companies.

The secret here is to develop a valuable word of mouth (WoM) message so that your interface with a customer will leave them so delighted and pleased that they will inevitably tell another person and more than likely more than one.

It is often said that good service will win you three new customers whereas bad service will lose you one for certain and possible many more as the word spreads.

The perfect model

There could be a no more dramatic example of the power of word of mouth than with the stock market. The slightest positive whisper about a soon to boom stock will see the price soar within days if not hours as the word spreads. Conversely, a bad report will see a stock tumble in minutes in an almost exponential downward spiral.

The stock market is the perfect model for companies that wish to understand the power of word of mouth. Unfortunately, too few work to make this happen, possibly because they are too steeped in
tradition, reluctant to change and maybe a little risk averse! Why “rock the boat” you may well ask if business is OK and doing something a little radical may cause problems or have unforeseen results, an effect that I refer to as “Consequential Change”

Use the principle of “Opportunity Capture”
The opportunity matrix asks us to “Track” people and observe behaviour, Using this approach can reveal the secret to developing the right WoM message, which is easy to implement, can be accurately costed and moreover the effect easily measured.

There is an old saying, the stock market is the word of the people, it never lies. Use this as a model and build your business by WoM.

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panellist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms.

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