Online consumers have a propensity to communicate and can become an ideal sales and marketing channel. Viral marketing can best leverage the democratic and self-service character of that channel by becoming a formal process.
Viral marketing has quickly achieved recognition because of a handful of high-profile examples: Marketers demonstrated that on shoestring budgets they could motivate millions. They did so by leveraging customer-to-customer communication to increase sales, brand awareness, and market coverage.
To date, however, marketers have had difficulty reproducing the success of a handful of viral campaigns, such as "The Blair Witch Project," HotMail, and the "Dancing Baby."
Although most e-businesses are planning to launch, or have already attempted launching, viral marketing campaigns, there are two obstacles to integrating viral marketing with the overall sales and marketing mix:
After comprehensive studies on the impact of viral marketing, we at IMT Strategies found that for most marketers the strategy is hazily defined but entails manipulating customer-to-customer interaction with marketing gimmickry in an attempt to achieve an exponentially growing user base. Many marketers also believe that if consumers do not respond to clever marketing tactics, then cash and prize offerings will provide enough incentive for consumers to spread the marketing message.
Discipline and Loss of Control
However, we also found that the cost of overnight market coverage is a near total loss of control over the company's marketing message and brand as eager consumers indiscriminately spam. Marketers perceive viral marketing as an art because it does not allow for a high level of control.
Monetary incentives are viewed as necessary because they offer what seems to be the quickest and most understandable way for marketers to gain that control in the customer-to-customer communication chain. "Paid" viral marketing, however, can be a dangerous solution. Rather than introducing the desired control, monetary incentives lead only to predictable increases in market coverage and an equally predictable loss of control.
All viral marketing initiatives share the goal of turning customers into a sales and marketing channel. Efforts to use the customer as a new channel also introduce a fundamental tradeoff between growing market coverage and maintaining control over the marketing message.
Viral marketing initiatives differ, however, in the degree of discipline involved in strategic planning and in the triggers they use to motivate consumers to function as a sales- and lead-generation channel:
The Right Perspective
The two most common mistakes viral marketers make are focusing on formalizing the message rather than the process and adopting a campaign-level, rather than an enterprise-level, perspective.
A campaign-level perspective might focus on relatively unpredictable qualities, such as the public's perception of a service, product, or marketing message as "cool." But an enterprise-level perspective on viral marketing is informed by quantifiable and thus predictable aspects of the sales cycle.
An enterprise-level viral marketing campaign relies on research data detailing frequently asked customer questions, complaints, and responses to follow-ups. It also identifies and helps develop high-advocacy customers, who can then be independently targeted with referral opportunities. Similarly, an enterprise perspective gathers and utilizes data about sources of referral.
Triggers, Segmentation, and Hardwired Viral Capabilities
The vast majority of marketers are planning to launch a viral marketing campaign in the next 12 months. To do so successfully, they must scientifically identify triggers that encourage customer-to-customer advocacy and segment existing customers who are receptive to viral marketing and understand the structure of incentive packages.
Success, ultimately, is in the hands of the marketer, who must encourage customers to connect with each other with the intent of advocating products and services.
Moreover, the online marketing environment must hardwire viral capabilities into its engine. Web sites must be equipped with tools that allow users who have just read an article or purchased a product to either post their opinions of the experience or forward related information to their network of friends and colleagues.
Other tools that would build viral marketing capabilities into an online marketing engine include gift registries, gift certificates, community bulletin boards, community chat rooms, and Amazon.com-type affiliate marketing programs. Online self-service channels can also be equipped with resources such as product comparison tools to support the customer-as-sales-channel undertaking.
It Must Be a Process
As the volume of permission email and unsolicited email increases, viral marketing will become more important. This is because online buyers will, over time, expand their network and come to rely more on their peers to learn about and recommend new products or services.
Viral marketing must therefore become less an episodic event and more a process and cycle. Managing customer-to-customer interactions requires setting in place and formalizing processes that guide customer advocates' communications.
The benefit of viral marketing grows from the close alignment of customer communication and buying behavior. Tapping into this benefit requires understanding the new role of the customer as a sales channel and focusing on the marketing process more than the marketing message.
As tools for tracking and analyzing online customer response and behavior grow increasingly sophisticated, marketers will realize higher levels of control over the customer sales channel. And more marketing and PR agencies will develop an expertise in enabling viral marketing strategies over the next 6-12 months.
In constructing an online marketing strategy, sales and marketing executives must consider viral marketing an integral element of their overall strategy.
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Stephen Diorio is President of IMT Strategies, which he founded in 1998. He is an established authority in sales and marketing strategy with specific expertise in hybrid selling systems, customer relationship management (CRM), and e-business strategy development. He has developed high-growth, low-cost channel strategies for leading marketers including IBM, American Express, GE, and Eastman Chemical and has published "CRM 2000: A Demand Side Perspective on Relationship Marketing." Prior to forming IMT Strategies, Steve was a partner at Oxford Associates, a leading "go to market" and e-commerce strategy firm. Steve has held marketing management positions at Citicorp Direct Marketing and GE Sales and Marketing. He holds an M.B.A. from the University of Chicago and an engineering degree from Bucknell University.
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