Buzz is the stuff of marketing legends. Dark and witty Harry Potter, the traffic-stopping retro Beetle, the addictive Pokémon, cuddly Beanie Babies, the hair-raising Blair Witch Project —all are recent examples of blockbuster commercial successes driven by customer hype. For some reason, people like to share their experiences with one another—the restaurant where they ate lunch, the movie they saw over the weekend, the computer they just bought—and when those experiences are favorable, the recommendations can snowball, resulting in runaway success. But ask marketing managers about buzz, and many will simply shrug their shoulders. It's just serendipity, they say, or sheer luck.

My research suggests otherwise. Investigating the marketing practices at more than 50 companies, my colleagues and I at McKinsey have found that buzz— a phenomenon we've dubbed "explosive self-generating demand"— is hardly a random force of nature. Instead, it evolves according to some basic principles. My research shows that companies can predict the spread of buzz by analyzing how different groups of customers interact and influence one another.

Many executives have little idea how to orchestrate a marketing campaign that exploits the full power of customer word of mouth. Instead, they remain enslaved to five common misconceptions about the phenomenon. Before companies can reap the total benefits of buzz, they must understand the principles of how it works, and doing so requires a close examination of those five myths.

MYTH 1: Only outrageous or edgy products are buzz-worthy.

Everyone can point to a buzz-driven consumer craze that was due in part to the sheer inanity or fringe quality of a product—think of Pet Rocks or the movie The Matrix. Yet according to our analysis, a surprisingly large portion of the U.S. economy—a shade above two-thirds—has been at least partially affected by buzz. (See " What Buzz Affects" for an industry-by-industry breakdown.) Obviously, buzz greatly affects the entertainment and fashion industries, but it also influences agriculture, electronics, and finance. Indeed, few industries are immune these days, partially because of technological innovations like the Internet that enable customers to spread buzz quickly. Consider the pharmaceutical industry, which has recently witnessed a dramatic increase in the power of buzz. In the past, pharmaceutical companies marketed new prescription drugs primarily through a direct sales force that distributed educational materials and free samples to physicians. Consumers were rarely aware of new therapies except as prescribed by their doctors.

Today, thanks to extensive advertising and the Internet, consumers have access to health-care information on a scale undreamed of just ten years ago. Indeed, a revolution is under way, transforming people from passive to active participants. In choosing their treatments, such active consumers can—and do— generate and spread buzz. Case in point: Viagra, one of the most talked-about prescription drugs ever, even among those who don't need it.

Shrewd pharmaceutical companies are now taking a two-pronged approach to jump-start buzz among both doctors and consumers. For example, when Merck launched Fosamax, a therapy for osteoporosis, the company carefully chose scientists and physicians with high standing to conduct the clinical trials and to promote the new treatment. In addition, Merck increased the visibility of the new treatment by sponsoring symposia at international meetings. On the consumer side, the company launched a major marketing campaign in women's magazines to inform readers of the risks of osteoporosis and educate them about the value of screening and preventive treatment. Before long, the debilitating bone condition became a common topic of discussion among women and between women and their doctors. As a result of these efforts, Merck was able to generate significant buzz for a previously unnotable subject.

Medicine is one thing, but sometimes even the most ordinary products can benefit from buzz. Remember Hush Puppies? When the company discovered that hip New York City kids were snapping up vintage pairs of its shoes at secondhand stores, it rushed into action. It began making its shoes in shades like Day-Glo orange, red, green, and purple. Next, it sent free samples to celebrities, and not long after, David Bowie and Susan Sarandon were spotted wearing them. Then the company tightly controlled distribution, limiting the shoes to a handful of fashionable outlets. Soon high-end retailers like Saks, Bergdorf Goodman, and Barneys were begging for them. In just three years, from 1994 to 1996, Hush Puppies saw its annual sales of pups in North America skyrocket from fewer than l00,000 pairs to an estimated 1.5 million.

Of course, not every product is a good candidate for buzz marketing. How, then, can managers assess buzz-worthiness? Two criteria make it possible.

First, products ripe for buzz are unique in some respect, be it in look, functionality, ease of use, efficacy, or price. For Chrysler's PT Cruiser, the degree of difference from the competition clearly lies in its retro, gangster-era look. In the case of collapsible scooters, the key buzz-worthy factors are functionality and ease of use: what other product allows people to dash from place to place on a lightweight, folding device?

Second, products with great buzz potential are usually highly visible. For many products, that condition is a no-brainer. The popularity of fashion accessories, like Gucci's baguette bags, tends to spread like wildfire because they are easily seen by others. Every time someone in a meeting pulls out a Palm device to jot a note, the company gets another endorsement of its popular PDA.

But insightful companies have discovered that products can be made visible. One way is to create forums, such as Internet chat groups, where customers can exchange information about a product— such as a new medical treatment—that might otherwise have remained hidden. Often, creative approaches are needed to facilitate the discussion. Pfizer, the maker of Viagra, faced an uphill battle when trying to generate buzz for its breakthrough drug, because impotence was a taboo subject. But by popularizing the medical terms "erectile dysfunction" and "ED," the company transformed the undiscussable into fodder for the bedroom and backyard alike.

What Buzz Affects*

Slightly more than two-thirds of the U.S. economy has been influenced by buzz.

13% Largely Driven by Buzz

Toys, sporting goods, motion pictures, broadcasting, amusement and recreation services, fashion

54% Partially Driven by Buzz

Finance (investment products), hotels and lodging, electronics, printing and publishing, tobacco, automotive, pharmaceuticals and health care, transportation, agriculture, food and drink

33% Largely Immune to Buzz

Oil, gas, chemicals, railroads, insurance, utilities

*McKinsey & Company estimate for 1994 U.S. economy (total equals $6 trillion)