Contagious: Why Things Catch On

by Jonah Berger

But a few years ago, one company did something slightly different. It sent me two copies of the same book. Now, unless I’m mistaken, there’s no reason for me to read the second copy, once I’ve read the first. But these publishers had a different goal in mind. They sent a note explaining why they thought the book would be good for my students, but they also mentioned that they sent a second copy so that I could pass it along to a colleague who might be interested. That’s how word of mouth helps with targeting. Rather than sending books to everyone, the publishers got me, and others, to do the targeting for them. Just like a searchlight, each recipient of the double mailing would look through his or her personal social network, find the person that the book would be most relevant for, and pass it along.

Easy and effective marketing tactic to get endorsement or spreading the awareness of the products. However, not many company remember to do.

Designing products that advertise themselves is a particularly powerful strategy for small companies or organizations that don’t have a lot of resources. Even when there is no money to buy television ads or a spot in the local paper, existing customers can act as advertisements if the product advertises itself. It’s like advertising without an advertising budget.

One of the main tenets of prospect theory is that people don’t evaluate things in absolute terms. They evaluate them relative to a comparison standard, or “reference point.”