Published November 2002

Viral marketing tactics
can work off-line, too

The success of viral marketing digitally demonstrates how this infectious concept can work through traditional marketing channels.

Viral marketing is the process of gaining rapid adoption through word of mouth “networks” leveraging the Web, e.g. communities, e-mail, instant messaging. Prior to the “digital era” we called it “referral” marketing.

Currently a hot buzzword, viral marketing has been around for a while. Tim Draper, founding investor of Hotmail, first coined the term in 1997.

Hotmail is the most publicized “viral” success story. We can take a few pages out of their book and apply them off-line. First, some background.

Hotmail, without a big ad budget, needed creativity to compete against industry stalwarts. Their solution was simple. They added a message to every outbound e-mail their customers sent: “Get your free e-mail at Hotmail.”

Their e-mail addendum performed like an implied endorsement. They made history! Hotmail spent $500,000 against Juno’s $20 million, outperformed them by threefold in half the time, and then got bought out by MSN for $400 million.

So, what can we learn from the Hotmail juggernaut that will work for the rest of us “didn’t get the (venture capital) check in the mail” marketers? We can follow some of their principles for creating a “viral” effect.

• Remove barriers to adoption: Hotmail discovered and dealt with “customer perceived” obstacles to subscribing to their service (privacy issues) before they launched this tactic. So what issues stand between you and your prospective customers? Better find out!
• Create barriers to switching: Amazon kept their customers from competitors by enabling a customizable shopping environment and sending e-mail notifications of interest based on customer preferences. How do you keep your customers from “shopping” the competition?
• Offer incentives for referrals: Sprint launched an incentive program through Radio Shack that rewarded sales associates for advocating their Zone long distance program. Year-over-year sales grew by 225 percent. What rewards could you offer your best customers to tout your business?
• Develop reciprocal relationships: Acrobat Reader — why do they give it away? For 1.4 million hits per week on their (Adobe) Web site. That little red Acrobat link is on more sites than can be counted. Who are the noncompeting companies that target the same market you do? Chances are, they’d be as eager as you to cross-promote.

I suggest you follow Tim Draper’s lead. Involve your key associates in a brainstorming session. Discuss how you can accelerate adoption, block competitors, mine for referrals and build strategic alliances. You’ll likely discovery “viral” opportunities that can grow your database and sales.

Here is the secret to viral marketing: Whenever a product involves people other than the purchaser, there is an opportunity to market to potential new customers.

Viral tactics require customer retention. Without it, nothing about your offer will be contagious. After all, growth has no value without retention. If you don’t have happy customers willing to spread the word, forget about viral marketing and concentrate on customer service. Until next month, see if you can catch a cold.

Andrew Ballard, President of Marketing Solutions Inc. in Edmonds, develops brand leadership strategies for businesses and teaches strategic marketing through Edmonds Community College. He can be reached at 425-672-7218 or by e-mail to andrew@mktg-solutions.net.

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