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How To Use Viral Marketing To Drive Traffic And Sales For Free!

by Jonathan Mizel

For the past few years, we have repeatedly said that as far as Internet advertising is concerned, there's no such thing as a "free lunch".

In other words, every "no cost" method of acquiring customers has a definite price in either money or time. For example:

1) People who understand how to manipulate search engines can get specific key words ranked higher than others. Unfortunately, you either have to spend hundreds of hours becoming one of them, or pay thousands of dollars to hire them.

2) Link swaps are great, but only when you can get people to link back to you. If you have ten or fifteen hours to spend e-mailing potential candidates, and a few more hours following up with them to make sure they set the link correctly, this is a great way to get...a few extra visitors a week.

3) Free-for-all pages and newsgroups still work, but the amount of traffic they generate is almost negligible, and of course your e-mail address is plastered all over the net to be harvested by spammers.

4) Publicity techniques like giving free content to websites and e-zines for republication are fantastic ways to bring in targeted customers, but they require that you create, and then willingly give away, your best information to attract prospects.

And so on and so on. That's why we focus on monetizing existing traffic with additional revenue streams. Once visitor value and ROI are determined, then it's easy to predict what will happen when you add more traffic.

Is there any free online marketing left?

The answer is a definite 'yes'.

We discovered a marketing model so powerful that entire businesses have been built using it. A secret principle with virtually unlimited marketing leverage. If you can work it into your business model, or better still, if the nature of your product lends itself to this technique, the results can be explosive.

It's called viral marketing. In a nutshell, viral marketing is a technique that uses a product or service's natural ability to endlessly propagate, much the way viruses do.

Viral marketing works in 2 primary ways:

1. It gets people to voluntarily promote your business because they want to.

2. It forces people to unwillingly promote your business because they have to.

For example, one company we profile spent practically nothing on promotion, received 32 million downloads of their software, and sold for $287 million. Another gets people to solicit their own mom, dad, and other close family members. Yet another pays people to refer friends to their site, but doesn't focus on the money aspect of the transaction. Rather, they focus on the high quality "content" they provide.

Below are 6 examples of viral marketing in action. Your mission is to review these case studies, determine which could be applied to your own business, and create your own viral marketing sales process.

Case Study 1: ICQ

ICQ is one of the top viral marketing success stories. Mirabalis (the parent company of ICQ) was a small Israeli software company that produced a free Internet chat program. They needed many users quickly to get market share and establish themselves as leaders in the chat software field, however, they openly declared they had no solid business plan to generate revenue.

And they had an ad budget of only $100,000!

Their chat software worked extremely well, which was a huge bonus, because people actually enjoyed using it. When they started using it, they immediately recommended it to others. Initially, the way most people heard of ICQ was through a friend (that's how we started using it).

Viral Marketing Strategy: Because ICQ worked, and was easy to install as well as use, people wanted to share it with their friends and co-workers. The nature of the program itself is interactive, and it works only with someone else who has it installed on their computer.

One of the first things people do after registering it is contact everyone in their own address book and ask them to download it so they can become part of their "chat" network. Of course, those people tell their friends. And so on, and so on.

In fact, several Fortune 500 companies saw ICQ's potential as a communication tool, encouraging their staff to use it instead of e-mail during business. Office workers quickly became accustomed to it, and got their spouses to download it to stay in touch during work hours.

In essence, the users become carriers, spreading the instant chat software throughout their own personal networks and beyond.

The strategy is simple. Build a good product that promotes communication, encourage others to share it, and make it compatible only with itself.

The result? 32 million downloads, leaders in the marketplace, a sell out to AOL for $287 million dollars, all with a measly $100,000 ad budget, a good product, and viral marketing.

Case Study 2: MyFamily

This is one of the more innocent examples of viral marketing, but effective nonetheless.

MyFamily allows you to set up a free website for your family. You can post a note on your own private discussion board, upload your vacation pictures so friends and relatives can see them (and don't have to sit around watching your slides), even send a mass e-mail to every family member at once announcing an engagement or important family business.

It's billed as a central meeting place where everyone can get together and communicate virtually, which is important these days since family members can be scattered all over the planet.

Viral Marketing Strategy: Once you set up your free family website, you are supposed to e-mail mom and dad, grandma and grandpa, your brothers, sisters, and cousins, even your freaky Uncle Louie, and have them all set up their own MyFamily accounts to access the family website as well. Invariably, they do.

Many viral sites encourage you to notify friends. MyFamily takes it a step further by encouraging you to solicit your relatives as well. All these visits add up to "page views", which are sold off to advertisers, thereby monetizing the traffic.

Case Study 3: Amazon

Everyone has heard of Amazon and everyone knows they have an affiliate program. However, not 1 in 100 people knows the secret of how they turned a simple associate script into a viral marketing machine.

Viral Marketing Strategy: The key is category specialization. Instead of merely allowing you to set up a bookstore to sell anything and everything, Amazon encourages you to create a specialty environment, focused on a specific topic, by paying a higher commission on books you directly recommend.

For example, if you run a site for body builders, you can create your own "body builder bookstore", featuring the books you want to share with your customers (which pays you 15%), rather than the New York Times bestseller list (which pays you 5%).

Regardless of your industry, Amazon allows you to choose as many titles as you like, write your own review, and earn a commission when someone follows your advice.

It's been said that too many choices confuse a prospect, thus, Amazon's strategy could be considered "Freedom From Choice" since most of their successful affiliates present a limited number of book and video selections, rather than the entire catalog.

Here's the kicker, since the subject matter is targeted, the online bookstore is considered "content" rather than advertising, increasing the overall perceived value of the site.

Case Study 4: Microsoft Office

One of the most insidious examples of viral marketing is what many software companies do. Mainly, they force you to upgrade by making newer versions backward, but not forward compatible.

In other words, they allow users of the new version to read older data, but users of past versions can't read the new data. Nowhere is this more prevalent than with Microsoft products, especially MS Office.

Viral Marketing Strategy: If you deal with corporate America like we do, you probably send and receive a lot of documents like Word files and Excel spreadsheets.

Up until last year we were using Office 95, which we really liked. However, right around February 1998, we started to get a lot of files we couldn't open because they were in the new Office 97 format. We'd call the person who sent us the document and ask them to resend it in Word 6 format or rich text (the universal format).

The first few times we did it, we heard a sigh on the other end of the line, followed by a pause. "I'll do it this time, but you should really upgrade to the new version because this is a pain."

After about 5 calls like this, the person would usually mention to their boss that "those poor people at Cyberwave are so broke they can't afford to upgrade their computers."

This would result in their boss calling us to say that if we couldn't afford to upgrade, they would pay for it (this really happened).

So, through sheer embarrassment, cajoling, and Fortune 500 peer pressure, our system got upgraded and Microsoft made another $400. (We can hardly wait for corporate America to upgrade to Office 2000. This time we bought some MSFT stock!)

Case Study 5: Adobe Acrobat

Adobe produces a proprietary software allowing businesses and individuals to share documents across multiple platforms like Windows, Mac, and Unix. The documents, known as PDFs, are readable on any computer.

Unlike HTML pages or Word documents, PDF allows you to keep your formatting, graphics, and fonts intact. It also makes them uneditable (however they are printable).

This is especially useful for corporate brochures, ads, or other format-specific documents you want distributed, but not manipulated.

Viral Marketing Strategy: Basically, Adobe gave away the Acrobat Software to several large corporations and encouraged them to put documents like technical manuals, instruction sheets, and media kits in PDF format.

They then encouraged those sites to offer a link back to Adobe allowing people to download the reader for free. Eventually, through continued use (as well as the fact that Acrobat is a good program), it became the de facto standard for public corporate documents delivered electronically.

Like ICQ, if you want to read an Acrobat document, you have to download and install their software first. So the key to Adobe's success is this: since they are able to see a fundamental problem on an industry scale (which is cross-platform document readability), they aim to set a new standard.

Case Study 6: Blue Mountain Arts

One of the most creative, clever, and non-intrusive forms of viral marketing is practiced by the online greeting card companies, specifically Blue Mountain Arts.

As a stand-alone site, Blue Mountain is regularly rated as one of the most popular commerce sites in terms of traffic, even though they market a limited number of items (they sell a few books, and lots of advertising).

The punchline is even though they don't make much in the way of revenue, they were just bought by Excite.com for over one Billion (with a big B) dollars!

Viral Marketing Strategy: Quite simply, when a person sends an online greeting card to someone, the only thing transmitted is the following e-mail message: Jonathan Mizel just sent you an online greeting card. You can pick up your card at: http://bluemountainarts.com/directory/623294739290

In order to read the card, the recipient must visit Blue Mountain Arts website. Of course, they are encouraged to respond, or send a card to someone else, totally free. This brings yet another person onto the site, who brings more people, and more people, and so on.

All these people opening and closing pages, and sending cards on Blue Mountain's site helps them by creating "page views", which they sell to advertisers, either on an impression or per-transaction basis (hence the high commerce ranking). In actuality, a majority of their traffic comes from people picking up cards or returning to the site to send their own.

Conclusion And Resources

By now, you have probably thought of at least 1 or 2 ways to implement viral marketing into your own business.

At the very least, you should find applications for the "share it with a friend" strategy or the addition of a greeting application to your site (check out Bravenet).

If you own a commerce site, you need an affiliate program (like Synergyx). And if you have an incredibly cool proprietary software program, consider giving it away free.

Note: After reading this article, you may think that viral or word-of-mouth marketing is a technological game. Actually, it's not so much about technology as it is about getting people actively involved. Certainly, the people-numbers game requires a high level of skill and dexterity to pull it off, and we have 2 recommendations. Seth Godin's Unleash The Idea Virus is a 197-page long and slightly difficult read...a real brain food but classic ready for your FREE download. The other book that recently made its appearance is Creating Customer Evangelists: How Loyal Customers Become A Volunteer Sales Force by Ben McConnell and Jackie Huba. You can purchase it at Amazon or your nearest bookstore. Here's a preview.

Jonathan Mizel is a well-known and respected Internet Marketing expert, and is often found advising well known companies such as Microsoft, Intel, and American Express.

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