Word-of-mouth is a type of a viral marketing since it encourages the audience to pass on a marketing message to others, creating the potential for exponential growth in the message’s exposure and influence. The name “viral” marketing was coined because it utilizes people as the “hosts” to carry the advertising message in a similar way as virus operates. The idea is to make your message “contagious” so it infects others that your company may not yet have come in direct contact with through the use of “hosts”. Advertising costs are kept to a minimum since they are usually indirect costs such as time and materials used in the effort to engage its customers in recommending its products. This expense is usually miniscule compared to the cost of acquiring customers though any other advertising medium. While the initial exposure is slim, when spread effectively, the area of influence rapidly expands by exponential growth.
Elements of an Effective Viral Marketing Strategy:
- Gives away products or services
- Provides for effortless transfer to others
- Scales easily from small to very large
- Exploits common motivations and behaviors
- Utilizes existing communication networks
- Takes advantage of others’ resources
“Free” is the most powerful word in a marketer’s vocabulary. Most viral marketing programs give away valuable products or services to attract attention. The following successes show the effectiveness of WOM over glossy magazine or flashy TV ads in certain cases.
- HotMail. Instead of marketing their product, they gave away free email accounts to anyone who wished to sign up. The only catch was each email message they sent from their Hotmail account was accompanied with a little notice in the footer telling people how they could get their own free Hotmail account with a clickable hyperlink. This led their user base to explode as people who used this email system continued to spread the word whenever they emailed friends or associates.
- MP3s. This popular music format was an overnight success. WOM first passed through a network of college students. Within 6 months, the phenomenon spread to all campuses across the US and now has become a common household acronym. All this without a single penny spent in advertising funds.
- Amazon.com. Amazon.com has a “share the love” program in which you can send friends a 10 percent discount on any book you have bought. If your friends bought the book, you would receive credit toward future purchases. The credit consists of the actual dollar amount of the 10% discount I saved my friend. Using viral and word-of-mouth techniques, “Share the Love” employs standard refer-a-friend techniques but with an added kicker: You share goodwill of letting your friends know about a great book, and you get paid for doing it.
- Krispy Kreme Doughnuts does not spend any money on advertising. Instead, it relies on strong word-of-mouth that is generated by the thousands of free donuts it gives away in the neighborhoods of its new locations. Since its debut on the NYSE in April 2000, Krispy Kreme Doughnuts Corp. has gone through two stock splits and continues to exceed all financial expectations.
The success of WOM led to the establishment of new companies specializing in creating WOM, such as NewGate:
“Our Core Word-of-Mouth Campaign proactively generates buzz about your offerings by seamlessly integrating your product’s key selling points into ongoing discussions relevant to your industry. NewGate has a full-time staff dedicated to monitoring these discussions, looking for opportunities to begin conversations and answer questions about your company while disseminating compelling information about your offerings. Once group members start talking about your brand and products, word-of-mouth gains momentum. The end result: increased sales and improved online and offline awareness.”
Not only do they try to duplicate the extremely personal effect of WOM, they even have sneakier techniques for creating positive buzz surrounding your products by such methods as their whisper campaign:
“Our Whisper Campaign is designed to piggyback on the publicity surrounding your competitors. We begin by closely monitoring the Internet to locate conversations about products or services competing for your audience’s attention. Wherever we locate these mentions, we incorporate praise of your offerings into the discussion. We never denigrate or criticize the competition, but rather add to the conversation by “whispering” useful reminders about the advantages of your offerings.”