Universal implications of small-world clusters

The results of the small-world network clustering simulations have far reaching implications for the whole world. What they are telling us is that the effect of the Internet on the human population as a whole is going to be much the same whatever proportion of people are connected. In other words, a person who is not connected to the Internet is almost as connected as someone who is connected.

It is hard to imagine that a rice planter in the paddy fields of China may be almost as connected to Bill Gates as anyone working for Microsoft, yet effectively, this is what this small-world cluster theory is telling us: the rice planter may be only a few further steps away.

Effects on sales and marketing

The small-world clustering effect can influence retail buying patterns, both on and off line. This can be visualized by imagining a little old lady living in a cottage in a remote village in the English countryside. She never ventures outside of her cottage except to go once a week to the local grocery store. A traveling salesman also stops at the store to take orders from the grocer. This salesman might have a daughter who is married to an America who works in the White House. By way of conversation the salesman might tell little anecdotes to the grocer of things that happen in the White House that he has heard from his daughter via her husband.

The grocer might repeat these anecdotes to some of his customers including the little old lady. In this way, the little old lady in the cottage might be as much informed as to the goings on in the White house as most Americans - and would be connected directly to the President through no more than five links. She might well hear about a particular favorite dish of the President and decide to try it for herself. Perhaps, if her grocer didn't stock it, she'd ask him to buy it in for her.

In a similar way, the conclusions of a discussion about a product or service in an Internet discussion forum might be passed on to somebody who doesn't own a computer. People not connected to the Internet are perhaps only one or two steps further away from these discussions as anyone who actually takes part. In this way, the ideas and recommendations, coming out of debates and information exchange from a multitude of different on-line groups, spread to the population at large.

On-line influences can be highly magnified because the small-world clustering effect can rapidly transfer information from one discussion forum to another. A company in the UK, by way of a promotion, once offered free theater tickets to the first twenty people to apply at their site. They had fourteen thousand visitors within the first twenty four hours as word quickly spread from one news group to another.

The effect of small-world clustering is bound to effect advertising and marketing techniques in the Information Age. If everyone is virtually connected to the Internet, even though they may not own a computer, it may be that word of mouth and viral marketing will have many advantages over mass media marketing techniques. This will undoubtedly lessen the importance of "point of sale" as being the place to convince and influence customers: most people will already have made up their mind by the time they reach the source.

The sociogram

In the book "The Entrepreneurial Web" mention was made of the sociogram. It was explained like this:

A drug manufacturing company had been spending quite considerable sums of money mailing out expensive literature, sales packs and samples to thousands of doctors on its mailing list and was getting very disappointing results.

Using a questionnaire to try to discover what influenced doctors in their decisions to prescribe particular drugs, the drug manufacturing company discovered by far the most influential factor was advice or recommendations from other doctors.

To investigate this clue, the drug company picked an area in the country and sent a team of investigators to call on every single doctor there. These investigators were instructed to try to find out who was speaking to who. When these result were obtained, the marketing department took a map of the area and drew a small circle on the map to mark the geographic location of each doctor, then drew a straight line between any doctors where a communication link had been established. Such a diagram is known as a sociogram.

What they discovered, when they completed the map, was that the lines radiating out from the doctors varied immensely. Some doctors had lines connecting them with many others, some with only one or two. Looking at the overall picture it was clear that if peer to peer communication was a strong influence then the influence was concentrated around a relatively small number of doctors.

Changing their marketing strategy in this particular area, the drug company found that concentrating all of the marketing effort onto only these highly communicative nodes, produced far better results than if the marketing effort was spread equally over all doctors.

The computer enhanced communication environment of the Internet suggests that such a marketing strategy could be effectively and efficiently employed for all manner of products and services. Again, this is a solution involving communication between people and involves very little technological knowledge at all.

In all communities, large or small, there is always the information guru who knows where to get the best products, the best services and the best prices. Whether these are the mean types, who tell you where you've gone wrong after the event, or the type you can go to for advice before you make a purchase decision, they are always there, influencing buying patterns.

To maintain their position as the reliable information gurus, they will have to be constantly investigating and searching the market places. What better field for their research and investigation than the Web, the news groups and the list serves? In light of the small-world cluster principle, this makes sense, so, what effect will in-your-face advertising and marketing have on these influential local communicators? Will they just want to regurgitate readily available information to their local group? It is more likely that they'll relay information they'd gleaned from an obscure discussion forum that none of their neighbors would know about.

It is also quite common for people who use their computers to hunt for bargains to tell their neighbor about their successes. Their neighbor then asks them to buy or look for particular bargains on their behalf. In this way a single person with a computer can act as the Internet link for a whole neighborhood of non computer users to shop on-line.

It is unlikely that anyone could specifically target these local information gurus. They will be feeding off of their own network of contacts and will be seeking out recommended product and services rather than looking at advertising or marketing presentations. In short they will be relying on word of mouth rather than simply information.

It also makes you have a double think about search engines. These are not particularly efficient and are sometimes confusing to use. Wouldn't people be more inclined to seek advice from a knowledgeable friend who frequents to on-line discussion forums? With such a small number of links needed to connect any kind of expert to a non expert, word of mouth by way of the small world cluster effect is going to be a far more efficient way to get information than any kind of directory or search engine. More importantly, this word of mouth is far more likely to be driven by excellent value, reliability and efficient service than by targeted advertising.

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