Triadic Closure in Marketing
http://www.forbes.com/sites/kimberlywhitler/2014/07/17/why-word-of-mouth-marketing-is-the-most-important-social-media/
http://knowledge.wharton.upenn.edu/article/network-based-marketing-using-existing-customers-to-help-sell-to-new-ones/
Network based marketing, particularly Word of Mouth Marketing (WOMM), is one of the most successful forms of advertisement. It uses the core features of the Strong Triadic Closure Property to reach more customers and make positive impressions.
Word of Mouth Marketing is exactly what it sounds like: A company uses consumers’ word of mouth recommendations to friends and families to publicize a product rather than relying only on traditional commercials and printed ads. The company promotes this customer involvement through social media or special campaigns. For example, Nike focuses on helpful and easily available customer service. People who have good experience with Nike’s customer service and worse experiences elsewhere are likely to recommend Nike over the competitor. Lay’s “Do Us a Flavor” competition to create a new chip flavor encourages consumers to visit the lays site, discuss ideas with friends, and try the new flavors when they are released. Word of Mouth Marketing can also be implicit. For example, a person wearing a shirt with a logo implicitly says he or she supports that clothing company.
The Strong Triadic Closure Property says that if node A has strong ties to nodes B and C, then there must also be an edge between nodes B and C. The Strong Triadic Closure Property is not an absolute rule as many situations violate it, however it describes well the trend of how and why mutual friends meet. There are three main causes of Triadic Closure. 1) B and C have the opportunity to meet because both spend time with A. 2) A might have incentive to introduce B and C. 3) B and C have reasons to trust each other because they both trust A and are inclined to trust A’s friends.
In this comparison of WOMM to Triadic Closure, C is a company or product that A likes. WOMM fulfills the three causes of Triadic Closure: 1) B has the opportunity to learn about C, for example B may be with A while A uses the product C. Thus, B gets exposure to C. 2) C might have a deal that gives A incentive to introduce C to A. For example, DropBox gives customer A extra storage when A gets friends to sign up. 3) B is more prone to trust close friend A than a paid-for advertisement. This is possibly the most successful aspect of WOMM. The Forbes article cites a study by Nielsen that showed that “%92 of consumers believe recommendations from friends and family over all forms of advertising.” A study by Wharton Professor Shawndra Hill at Wharton further proved this point: people who interacted with previous customers of a service were “about 3.4 times more likely to purchase the product than” people who had not interacted with previous customers.