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Viral Marketing

Viral marketing was born in 1996. However, the principle it bases its success on has been around for centuries. Companies have used VM to propel themselves among the elite in record fashion. It is safe to assume what the representatives at hotmail.com and etour.com think of the viral method.

The most well known attribute of a VM is that it can spread quickly and profusely like a rampant disease. This networking potential enables it to be an incredibly powerful marketing tool. However, with its unique disease-like quality, it does raise a question. How does someone start a marketing disease? Both hotmail and etour's marketing teams admit that they didn't expect or anticipate the success they had.

One of the reasons why VM is becoming so popular is that marketers view it as an opportunity for every consumer to be a publisher and a member of the sales team. Thus, making the marketing professional a mediator between balancing a compelling value for the consumer and concern for their privacy.

The two most common forms of viral marketing are the service and incentive based models. Netscape Instant messaging is an excellent example of a service-based model. Incentive-based models provide consumers cash, credit, or other rewards for sending company information to friends.

Other possible viral marketing capabilities are online gift certificates, gift registries, community chat rooms, community bulletin boards, and various types of affiliate marketing programs.

The key elements in effective viral marketing campaigns are:

1. Incentives:

An effective viral marketing campaign should offer something that is valuable and tangible to the receiver. It should be something that people would like to e-mail to other people because it is interesting and unique. One hint regarding the use of the incentive-based model is to keep your incentives closed instead of open. For example, if you provide an incentive for people to receive $10 dollars off their next purchase when they refer five names. You need to close the referral system at five per customer, that way you won't be taken advantage by people searching for personal gain.

2.Referral personalization.

When you send out e-mails to referred e-mail addresses you need to identify the person's name that referred them in the subject line. For example, "RE: Joe Someone mentioned that you might like to know about our 25% discount on golf equipment.

3.Analyze your actions.

Measure your results so you can optimize your future actions to get your full ROI. The important items of your e-mail marketing campaign that you need to concentrate on are your click-through and conversion rates.

4.E-mail tenacity.

Include a germane viral marketing offer in every e-mail message you send. Frequency can be an extremely effective way to broaden the reach of your marketing message

Points of Interest

Fifty-seven percent say word of mouth or viral marketing is their main source of information about new sites.

Click-through rates for the banner ad, which were as high as 2.5 percent a year and half-ago have dropped to a mere .05 percent. Jupiter Research reported in March 2001 that, 5 to 15 percent click on the links in viral messages.

The Good and Bad

VM provides lower costs in customer acquisition that other online mediums. For example, Rick Davis, chief executive of Ants.com, a career placement site for freelancers, estimates that it costs them less than 50 cents to acquire a customer from VM, while banner ads cost the company $3.50 for each new customer.

The importance of VM is increasing especially with the rising concerns of unsolicited e-mail. More and more people will rely on the their peer's recommendations to learn about new products and services.

Since VM relies heavily on e-mail usage it does present potential problems in unwanted mass e-mail messages. For example, companies that base incentive-service programs solely on the numbers of e-mail addresses that consumers supply them will undoubtedly have spaming issues to overcome. John Mozena, vice president of the Coalition Against Unsolicited Commercial E-mail said, "Unfortunately, whenever you give someone an incentive to contact people, spam ensues. We're not implying that e-mail should never be used as a marketing tool, but sending to a friend is one thing -- sending to total strangers is another."

Here are some ways you can stymie potential problems with incentive-based models:

  • Limit the number of customers a single consumer can refer.
  • Impose strict refer-spaming polices.

Many of the failed attempts in VM make the mistake of focusing on the campaign-level instead of the enterprise-level. A campaign-level focus slants it weight against the unpredictable nature of the public's perception. The main problem with this focus is that it is hard to accurately measure things such as how "cool" or "popular" the message is.

The viewpoint from an enterprise-level perspective on VM execution is centered on gathering quantifiable data. This research is typically compiled from customer responses, complaints, and questions. Also, marketers will learn additional and helpful information about referrals through this process that will give them additional advantages.

Another downside to VM is that people are becoming more web savvy every second. It is important to think twice on how and why you are implementing a VM strategy. It is not going to be easy to create something that will "catch on" quickly to a large audience-it needs to have clear authenticity or value to succeed.

Losing Control

The common thread among all viral marketing initiatives is veering consumers into salesmen. This seems great on the outside because the marketing message is being distributed faster and faster. However, it is possible the marketing message is also being distorted. Consequently, the more people you acquire in your VM networking system the more control you lose.

VM Point of View

There is no doubt that VM strategy has become a mainstream marketing platform. The key element that will hold viral marketing together is trust. As more and more people receive e-mail the easier it is for them to delete it. Obviously, the more trust someone has the more inclined they will be to click on the e-mail message.

Rising above the thousands of voices and distractions that people are bombarded with everyday is another of the many challenges that emarketing professionals are facing. The underlying issue is finding a balance between getting your voice heard over someone else's without being annoying. If you are in the mode of spreading a disease-like message at least conjure up a compelling reason for people to click on it.


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