Viral Marketing Formula

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Viral Marketing Formula

Viral Marketing Formula
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Viral Marketing Formula
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Viral Marketing Formula
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This book is not intended for use as a source of legal, business, accounting or financial advice. All readers are advised to seek services of competent professionals in legal, business, accounting, and finance field.
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IMS Internet Marketing Solutions SARL and JP Schoeffel – Copyright - 2010
Viral Marketing Formula

clip_image003[4]clip_image013All About Marketing

Before we get into the specific aspects of viral marketing, what it means and how to implement it, let‘s spend a little time discussing the concept of traditional marketing, what it is, how to implement it.
There is nothing ‗magical‘ about the concept of marketing. Simply put, marketing is any action that puts your company or its products in the minds of potential buyers of your goods and services.
There is some magic however in successful marketing; a subtle blend of knowing your target audience and what will both be memorable and yet not overshadow the key elements that you need the target audience to remember. This, of course, takes research into what the potential sales of your goods or services might be as well as understanding possible pricing margins and the profitability that is possible for the given market; the costs of marketing can‘t be such that your efforts won‘t pay for themselves in the long run.
There are essentially seven different aspects of marketing that need to be considered by most physical good manufacturers. They are normally referred to as the ―Seven Ps,‖ which include:
" Product
" Price
" Place
Viral Marketing Formula
" clip_image014Promotion
" People
" Process
" Physical Appearance
Each of these aspects could have an entire book dedicated to them and how to best implement a marketing scheme, but for now let‘s simply define these Seven Ps in as little detail as possible:

1. Product

Obviously the most important part of any marketing scheme is the product itself–some things sell themselves and simply need to be introduced to the public to be recognized for the value they have. Others may be necessary and life altering, but may not be clearly understood, or the value may be undermined by availability from other resources. But the product itself is by far one of the more important aspects of what and how to market, and therefore is number one in the Seven Ps of marketing basics.

2. Price

The next most important aspect of a successful marketing scheme is to match the price point to a level which people will pay, and which allows for enough volume of sales to maintain future advertising and development—without being so high that it encourages others to enter competition with you.
Viral Marketing Formula
clip_image013[1]Finding a successful price point starts with looking at your customers and the market niche, then at any competitor's current pricing models and how customers feel about those price points. If you find you could sell for half the price of existing vendors, but the public believes the price of the goods is already fair, then entering too far below current market values may cause them to believe your product is of a lower quality or has less assurance of longevity.
An excellent example of a price that is unwarranted but widely accepted is diamonds. Except for the fact a diamond is one of the hardest natural substances and is as pretty as cut glass, it has very little value and is not that difficult to obtain or process. So why are they so expensive? Simply put, because the people in the business tightly control the price and help with marketing campaigns to set public acceptance of the existing price points.

3. Place

Another one of the Seven Ps that is not as vital today in the Internet- driven world (but still bears thinking about) is the place—either where you will be presenting or obtaining the products you will be marketing. For most Internet-based businesses, this really boils down to the shipping model and company you will deal with to get the products to your customers. But for some, a physical retail outlet is still an important aspect of their business image and the way their company will be perceived.
Viral Marketing Formula
clip_image013[2]There are other things to consider here, too. For example, one vendor providing cheaper shipping but not enabling you to deliver without signatures can be an issue—your customers might be annoyed at having to take time off work or go to another location to obtain the product they will be anxiously awaiting. Having to arrange a schedule or fight to obtain the goods may override any excitement your successful marketing may have created.
Of course, being able to physically hand someone the product in a nice bag from a retail outlet is the ideal scenario: but today most businesses deal at least in part with online and magazine sales. Other options may include sales at onsite locations such as exhibitions, conventions and fairs—all of which offer the same opportunities to stand out from your competitors as a retail outlet, but mean some additional planning and thinking ahead.

4. Promotion

The ―P‖ for Promotion is a key attribute to marketing, and especially viral marketing. It is the aspect where you pump up the public's knowledge and understanding of your goods or services in any manner possible. Smaller budgets mean more clever marketing approaches, but some concepts you can bear in mind that should work regardless of the amount of funds available to your campaign include:
a) Indirect approaches such as PR can be more effective than 'above-the-line' activities like advertising. Coverage in the kinds of publications your customers read is worth its weight in gold,
Viral Marketing Formula
clip_image013[3]so don't be shy about approaching newspapers and magazines. Most journalists are keen to hear good stories, particularly if you make it easy for them by supplying photographs with a press release.
b) For many new businesses, local coverage may not only be easier, it may also be more effective at generating sales.
c) Know what works—look at how others in your field do their promotions to see what kinds of promotions have been successful.
d) Don't underestimate the effectiveness of small-scale advertising in local papers, bulletin boards, and directories such as the Yellow Pages.
e) Come up with a catchy slogan that customers can recall easily, and get involved in local community activities.
f) Consider direct mail, tele-sales and the Internet advertising to win new customers.
With the proper planning and a vision of exactly what you're trying to achieve, you should be able to hit just the right promotional mix of advertising, direct marketing and public relations. In many cases, you can learn by examining how your competitors handled early promotion
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clip_image013[4]concepts. Just be sure not to try and copy theirs—being unique and new is a vital element of successful marketing, viral or traditional.

5. People

Your people can be your biggest asset, or your most visible deficit– even if you‘re the only employee of your company, the attitude your customers see from you at all times, (whether real or just perceived), has a major impact on how your business is perceived.
Ideally, you should reward existing customers in some way, and preferably in a manner that your competitors do not and to provide personalized service of some kind. It can cost you between three and ten TIMES as much in advertising revenue to replace a customer who has gone to a competitor, than to just keep them in the first place as a result of your companies positive perception and good service. So in some cases you can come out ahead in the long run just by losing a little on a few key transactions that would have taken time from properly servicing the majority of your customers.
One way to improve your customer relations is to welcome complaints, and to provide feedback to the customers who complain, letting them know that you value the input and what actions, if any, you are going to take based on their complaints. If you are not making changes, explain why. Establishing that you understand their position but cannot address it for whatever reason is the least you can do— provided doing so doesn‘t open you up to some kind of legal action!
Viral Marketing Formula

Process

Process refers to the methods and systems you have in place. These are what you utilize to deliver your products and track your customer satisfaction and sales as well as the costs, potential earnings and ongoing expenses per revenue generations. As far as marketing is concerned, it is perhaps the most important of all aspects of running a business. This is because with improper processes in place, you can neither understand nor extrapolate your real costs of revenue generation, and may very well be running at a long-time loss despite having profits being shown on the books currently or in the short term.
Some aspects that should be included in your processes should be:
g) How to track after-sales services
h) Informing customers of delivery status
i) Methods for dealing with delays and back-orders
j) Tracking and ensuring follow-up phone calls are made
k) Obtaining feedback and complaints about ongoing issues
l) Tracking orders and issues in a manner that allows easy lookup
As with most of the seven Ps of successful marketing, a great deal of time and/or money could be spent in this area, but careful, thoughtful and creative thinking can normally come up with processes that will work well and fit within most budgets.

7. Physical Appearance

Viral Marketing Formula
clip_image013[6]Most of us know that the first impression of our company and products are likely to be the way our web site, letterhead, email, logo, company sign or flyer appears. Not only does the appearance of these items provide an initial impression it can also help shape your customers‘ overall concept of your company as they become more aware of other aspects of your appearance and the ‗tone‘ of the business. There are basically three styles of design when it comes to physical appearance that impact your business, and those include:

1) Graphical designs

Covering everything from the logo and branding, to the style or
‗type‘ of fonts you use, the graphical look of your company is vital to the image you will be portraying. Entire industries of graphic designers exist to help companies develop packaging, stationery, leaflets, promotional brochures, websites, corporate videos, CD and DVD-ROMs. Whether you use these or develop them on your own is up to you. Since quality and consistency are vital, this is one area that it is often well worth spending a few dollars.

2) Product design

Everything from teapots to trains were created with the help of designers. It is not enough to fulfill a function, you need to do so in a manner that people will accept and that is also being reasonable and cost-effective to produce. A good product designer can help you here.
Viral Marketing Formula

3) Interior design

Whether a web site, the interior of a building, or the storefront of your convention display, spending time to develop exactly the right look can set you apart from competitors, or even improve your productivity.
Viral Marketing Formula

clip_image003[14]clip_image013[8]Marketing On The Internet

Most modern campaigns will involve the Internet or at least a web presence of one kind or another in part because modern companies without a web site are likely to fail.
E-commerce or the act of sales that are made online or across the World Wide Web (www) is the fastest growing and developing segment of our modern economy. Even the smallest business can now reach a global audience and present itself in whatever light it desires. Facts worth noting about today‘s Internet marketplace include:
m) There are more than 350 million people using the Internet and that number is growing daily
n) Sixty-nine percent of the online population has made at least one purchase in the last 90 days. By 2008, two-thirds of U.S. households will be online shopping
o) According to the January 2006 Trend/Forecasting report of The Dilenschneider Group, in the U.S. alone, the 2005 holiday season online shopping jumped by more than 35% from 2004
p) The average income of Internet households is over $66,790, making the Internet user a very attractive customer for you to target
Viral Marketing Formula
q) Currently most states do not charge taxes for sales on the Internet products shipped from outside the state. This loophole is being slowly closed due to the large number of Internet sales causing tax losses

E-mail marketing

A related aspect of Internet marketing that can be as annoying as it can be effective is targeted e-mail campaigns. Improper use of this avenue has lead to the use of so-called ―junk‖ e-mail filters and huge campaigns against vendors and sites that knowingly send out millions of e-mails to any e-mail address they can harvest.
Junk e-mail is typically sent without regard to whether or not the person in question is a potential customer or not. Returns of less then 1% on these campaigns are common, and still considered a ―success‖ because the costs are so low that any return seems worthwhile.
While e-mail is one of the most abused forms of advertising on the Internet, it can be a great way to start a marketing campaign. Use it carefully and correctly, especially with customer acceptance and true manned ―removal‖ systems.
The key to successful e-mail campaigns is to target people who would actually want to hear from you about your product, and then to personalize your e-mails in such a way that it isn‘t apparent you are mass-marketing. Any search on ―e-mail marketing‖ should turn up several companies and software systems to help you accomplish this.
Viral Marketing Formula
clip_image013[10]., http://www.campaigner.com or http://bronto.com/ ) Just be sure you act responsibly, or you may find your e-mails going into junk e-mail bins and all your marketing dollars wasted!

Newsletters (product updates)

Often confused as e-mail campaigns, another great concept in modern marketing is to run an e-mail newsletter for disseminating information about your company, your products, upcoming specials, and customer success stories. Newsletters must be sent out regularly and only to customers who have not asked to be excluded.
This can be a great resource for contacting potential customers and keeping them excited about you and your products. And the fact that you only write one newsletter that is then distributed to thousands of customers can be a great cost saving over other methods of contact such as the phone or direct mail marketing!
Your e-mail newsletter needs to be informative and useful. If you sell camping goods, for example, then articles about getting your campfire started and maintaining your RV will provide stories your customers want to read. This encourages them to do more business with you in the future.

Websites

A quality website is deceptively simple to use and difficult to create. Even if you don‘t have an online sales feature (which you REALLY
Viral Marketing Formula
should have in this day and age), having a web presence so that prospective customers can find your information, hours of operation, a contact form etc. is important.

Viral Marketing Formula

Viral Marketing Defined

For most of us, the word ―virus‖ has a negative aspect to it. We hear the word and think either of getting sick, of a nasty little bug that can make us sick, or of a computer virus which cost us tons of data and hardship at one time or another.
In fact, viruses are not necessarily bad, and most life on earth relies at least in part on them in one degree or another. Some people even argue that humanity itself fits the classic definition of a virus, infecting the planet earth for better or worse!
Classically, the definition of a virus is a ―small particle that lives as a parasite in plants, animals, and bacteria and consists of a nucleic acid core within a protein sheath.”
In some cases this parasitic co-existence may actually benefit the host in one way or another, an existence known as a ―symbiotic‖ relationship. It‘s common knowledge that most viruses have the ability to replicate themselves without any outside assistance, simply by finding a medium in which they can exist.
In other words a virus, when introduced into a system, will make copies of itself. Due to their nature, most viruses are easily moved from one system to another as they replicate, causing them to spread quickly and easily from one host site to another.
Viral Marketing Formula
When it comes to marketing and viral marketing campaigns, the idea is much simpler and focuses on the fact that most viruses (real or computerized) have the ability to replicate themselves without
―outside‖ assistance. In this case a ―viral‖ marketing campaign is one which allows or stimulates customers who are exposed to the ―viral‖ marketing campaign to actively help spread the word themselves.
That is, they send your promotion piece on to other potential customers due to their excitement with the product it underscores or because of they found it entertaining as a result of containing something humorous, or worth sharing as the result of a gift or award option associated with the campaign.
Having such a built-in replication capability, just as with real viruses, it has the potential for exponential growth and can quickly spread a message to thousands or even millions of users from a single starting point.
Urban myths are a good example of such growth. Even though numerous websites debunk such myths, they continue to circulate widely. More than half the people exposed to them forward them to others even though they‘ve heard them already and know they are false. Sooner or later, the myths have spread too far and wide to stop.
One of the greatest examples of this in an actual working scenario was the original hotmail expansion program. Hotmail.com, as one of the first ―free‖ web e-mail service group, began recruiting members by first giving away free e-mail addresses and services, then requiring
Viral Marketing Formula
that every e-mail sent via their service include a simple tagline at the bottom detailing that the receiver could also receive free e-mail by signing up at www.hotmail.com.
Like ripples from a rock flung into a pond, the initial offering quickly spread outward causing exponential growth and a huge list of members to be tapped for marketing other services towards.

Strategies

Some strategies are obviously going to work better than others. The Hotmail campaign in which ―free‖ services are utilized with no apparent cost to the end-user, are no-brainers.
Approaches where some initial up-front costs are charged to credit cards or where ―future‖ charges will be incurred are much less likely to generate active involvement. Few promotions will work as well as Hotmail‘s strategy because most products and services don‘t generate revenue via their day to day use.
Hotmail users spread the word and generated new business simply by using the service itself. You can increase your campaign‘s likelihood success and its ability to generate new business traffic by including one or more of the following proven ―viral‖ elements:
" Gives away products or services
" Provides for effortless transfer to others
Viral Marketing Formula
" Scales easily from small to very large
" Exploits common motivations and behaviors
" Utilizes existing communication networks
" Takes advantage of others' resources
Let's examine each of these success elements briefly.

Gives away valuable products or services

There is no question that "Free" is one of the most powerful words in marketing. It‘s not surprising, then, that most viral marketing campaigns and programs include some method of giving away products or services of varying values to attract attention and draw customers.
From free e-mail services or free information to free "cool" giveaway items such as buttons, posters and pens to trial software programs that perform powerful functions hinting at the full-fledged capabilities available in the "pro" versions, the list of potential products and services to give away for free is practically endless.
Part of the reasoning behind this is the Second Law of Web Marketing known as Wilson‘s "Law of Giving and Selling" which in part stipulates that while words like Cheap or inexpensive may generate interest they won‘t do so as fast as simply saying "FREE!"
Viral Marketing Formula
One of the keys to the success of modern viral marketers is that they practice delayed gratification. They may not profit today or tomorrow, but if they can generate a groundswell of interest from something free, they know they will profit eventually and hopefully for a long time afterwards.
Investing up front by providing goods for ―free‖ to the end-user attracts attention that can then be redirected to other desirable things you are selling that will and eventually earn money.

Provides for effortless transfer to others

With real-life viruses, you find that public health nurses offer sage advice during flu seasons and high risk locations: ―simply stay away from anyone who coughs, wash your hands often, and don't touch your eyes, nose, or mouth and you are much less likely to catch a virus or get ill.‖ This is because a virus only spreads when it‘s allowed to transmit from one person to another. In the real world, the medium that carries the virus is normally mucus or other bodily fluids.
Likewise, your marketing message must rely on existing mechanisms through which the message is just as easy to transfer and replicate: e- mail, websites, graphics, software downloads, etc.
Viral marketing works so famously on the Internet, in part, because of the ease of near-instant and inexpensive communication and because
Viral Marketing Formula
people like to share things they see and hear. Digital formats make copying music and images simple.
Most software interacts with other programs in some form or another, despite AOL‘s noted exceptions! From a marketing standpoint, your goal is to simplify your message so it can be transmitted easily and without degradation: shorter is best. As with the Hotmail campaign; saying ―get it free‖, then listing the location is about as simple as it gets.

Scales easily from small to very large

If you expect your message to spread like wildfire, then the transmission method needs to be rapidly scalable from small to very large. This was one of the few weaknesses of the Hotmail model.
As a free e-mail service, it required its own mail servers for transmitting messages. When the strategy turned out to be wildly successful, more mail servers had to be added very quickly to support the rapid growth. Otherwise, the service would have bogged down and people would have deemed it unreliable.
Just as in real life, if the virus multiplies but kills the host before spreading, then nothing worthwhile is accomplished. Having an idea in advance of the potential for growth and for building any necessary scalability into your viral model is vital to a successful viral marketing
Viral Marketing Formula
campaign.

Exploits common motivations and behaviors

A clever viral marketing plan will take advantage of common human motivations. For instance, what proliferated "Netscape Now" buttons and ―Microsoft Bob‖ T-shirts in the early days of the Web? It was the desire to be cool and be part of a trend.
Another factor that always drives people is the desire to strike it rich, or put simply: Greed. A hunger to be popular, to be loved, and to be understood also stand out as driving human factors.
The resulting urge to communicate based on these basic human needs can produce millions of websites and billions of e-mail messages. When you can design a marketing strategy that builds on these common motivations and behaviors for its transmission, you have a winner.

Utilizes existing communication networks

It is a fact that most people are social. Nerdy, basement-dwelling computer science grad students may be jokingly referred to as the exceptions, but even they have friends and family with whom they connect. In fact, scientists tell us that each person in the modern society has a network of anywhere from eight to twelve people in their group of close friends, family, and associates. If you factor in a person's broader network that may increase to scores, hundreds, or

Viral Marketing Formula

even thousands of people with whom they interact within a given period depending upon their position in society. A waitress, for example, may communicate regularly with hundreds of customers in a given week; a person running a news-blog may reach millions.
Network marketers have long understood the power of these human networks, both the strong, close networks as well as the weaker networked relationships. People on the Internet develop networks of relationships, too. They collect e-mail addresses and favorite website URLs.
Affiliate programs exploit such networks, as do permission e-mail lists. Learn to place your message into existing communications between people, and you rapidly multiply its dissemination.

Takes advantage of others' resources

The use of others‘ resources aptly demonstrates what makes viral marketing unique. In a traditional campaign, the marketers themselves must identify a niche in society, carefully design a campaign that appeals to that target audience, and then pay for and otherwise promote ways to reach that group of people.
A viral campaign, on the other hand, both generates its own spread and is at least part self-targeting. People who are interested in or use your campaign will tend to be communicating with other people like themselves. They do your work for you by reaching your ―target‖‘ without your having to first identify and locate that group yourself. In

Viral Marketing Formula

addition, and perhaps most importantly, you are not out all the costs associated with first identifying and then reaching those individuals.
While you may still have a large percentage of people who do not participate if your offering is not of interest even if it is free. But considering that your costs are nil or close to it as compared to a traditional campaign, this is still a remarkably inexpensive type of marketing campaign to participate in!
Viral Marketing Formula

Epidemic Or Opportunity?

Some people hate viral marketing and view it as a much-abused sales technique. This belief arises from the confusion many people have over the difference between viral marketing and so-called ―junk e-mail‖ campaigns. In fact, many viral marketing schemes do rely to greater or lesser extent on getting individual users to forward e-mails out to large groups of other people.
The key to avoiding this perception—which can and will eventually lead to methods to ban or at least stymie the effectiveness of viral marketing campaigns—is to include offerings that have interest and value to the end-users, even those who choose not to participate.
This is again one area in which the Hotmail campaign succeeded so very well because even people who did not sign up for the service were often getting benefits from being able to communicate with friends who otherwise might not have an e-mail carrier or account with which to share.
Perhaps one of the greatest threats for successful viral marketing campaigns is the increase in ―Malware‖ software or links that cause harmful additions to users systems such as pop-ups, slowdowns and redirects on Internet pages.
While some are legitimate attempts to gain market share or public attention, poor programs and links can cause great harm. And of course, the public has reacted adversely. Now, many potentially
Viral Marketing Formula
successful viral marketing campaigns have been restricted or even fouled by public skepticism and fear.
Mal-ware and viruses are so prevalent that the public is often either overwhelmed and doesn‘t even try to protect themselves or goes so far overboard that they refuse to even open or read e-mail messages from sources that they do not recognize. Neither approach is sound. But the latter, of course, will ruin any chance to market a new product or idea to these people by using e-mail as a communication method.
The mal-ware issue looms so large, that antivirus companies are now circulating lists of NON-harmful virus hoaxes along with the names of misunderstood programs the public fears. Why? They want to teach computer users the difference between perceived threats and real threats. Here are just a few examples of one such list of perceived (but not real) threats:
" "Hello Dear" Hoax
" $800 from Microsoft Hoax
" 48 Hours Hoax
" A Moment Of Silence Hoax
" A Virtual Card For You Hoax
To further add to the confusion, many antivirus software manufacturers are using the word ―hoax‖ when referring to harmful or
Viral Marketing Formula
potentially harmful malware even though these programs may actually cause problems when a person installs them or reacts to them.
They‘re being called hoaxes because the information included with them isn‘t technically true. However, calling them hoaxes may lead people to assume that unsafe programs are safe.
The biggest harm in these and other ―humorous‖ attempts at causing mischief amongst the world‘s under-educated is that it works far too often.
The result?
The fooled computer users delete legitimate files and otherwise damage their systems in the belief they are protecting their computers. Then the companies targeted by such ―humor‖ are forced to spend money—via support staff costs—by fielding questions about false issues and/or by helping users fix the problems they just caused by falling for the hoax.
These actions and others like it are resulting in the public‘s outright hatred of all e-mail ―instructions‖ and e-mail chains. In fact, computer users have grown suspicious of many of the methods necessary for viral advertising to work effectively via e-mail. If this attitude prevails, the future of viral marketing itself may be in question!
There are many sites like http://www.hoaxkill.com/ and
http://www.snopes.com which help to debunk urban legends, myths
Viral Marketing Formula
and false virus warnings. Hopefully, the public is savvy enough to utilize these sites.
However, the need to frequently check such sites along with the constant barrage of warnings about opening or forwarding e-mail is beginning to negatively impact otherwise successful viral marketing campaigns. This is why it is so vital to keep your campaign simple. Like the now ―classic‖ Hotmail example, clearly describe who you are and what you are doing.
Make certain that any user involved knows exactly what their involvement might be and what the potential effects both on their system and personal accounts may be—up front when possible.
It‘s a good idea to at least do a study of these e-mail hoaxes to know what your viral marketing campaign email should NOT look like or be perceived as.
It‘s interesting to note that finding the public being caught in the middle between companies advertising legitimate products and others using similar techniques for immoral or illegal purposes is not restricted to the Internet.
Not long ago, an article was posted on http://publications.mediapost.com/index.cfm?fuseaction=Articles.show ArticleHomePage&art_aid=45264 about an attempt to find a way to kill ―ad skipping‖ features that had been introduced in modern digital
Viral Marketing Formula
video recorder in an attempt to force users to view the commercials when they were watching taped shows.
Obviously, if they can disable this feature in some way the users who have paid extra to have said feature will lose. The executives, however, will see it as a victory because those commercials are, in the minds of TV programmers and advertisers, part of the viewing package; the commercials help pay for the programming in the first place.
The truth is, if you force someone to watch a commercial they don‘t want to see after they have paid money to be able to skip it, those viewers aren‘t going to be very happy to deal with you at this point. But, you probably won‘t be able to convince the industry executives of that!

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