Benefits of viral marketing:

Viral marketing can be extremely effective for small and medium sized businesses due to its low customer acquisition and distribution costs. A recent report found that viral marketing can reduce customer acquisition costs by nearly 30% and increase average order sizes by up to 60% (Jupiter MMXI).

Additionally, consumers are becoming increasingly immune to mass marketing and advertising, so viral marketing offers something that doesn’t feel like they are being sold to, making them more receptive to the offer.

However, you need to tread carefully when running a viral campaign – particularly if using email – due to the overwhelming amount of unsolicited emails currently being sent by unscrupulous companies. While promotional emails containing cash incentives or prizes will most likely motivate customers to forward these on to friends, you have to be careful that this doesn’t encourage them to “spam” friends as this could potentially damage your brand.

How viral marketing works on the internet:

Like Hotmail, many companies have employed email as the main tool for viral marketing campaigns. This is due to its low distribution costs and speed of delivery, gaining significant reach for your marketing campaign in a short amount of time.

You can also use your business website to kick-start a viral campaign by simply placing a compelling offer – whether a promotion, a prize giveaway or a piece of must-have information – on a web page and encouraging users to recommend this to a friend.

Affiliate programmes such as those pioneered by Amazon, can also work well as a viral marketing campaign. By placing text or graphic links on an affiliate partner’s website you can direct users to your site while the affiliate partner earns a percentage of the conversion (be it a sale or a user simply arriving at your website) that takes place as a result of that referral. This usually works well if your product or service complements those offered by your affiliate partner, and also means you benefit from exposure to their customer base without any marketing activity.

Another more recent strategy to trigger recommendations and referrals is to place your marketing message in an environment where people are already communicating with each other, such as a chat room, news group or discussion forum, in order to create interest. However, this clearly has to be in context of the subject matter and not just a blatant plug otherwise you’ll offend and alienate any potential customers.

There are agencies who participate in relevant news forums on your behalf in order to build awareness of clients’ websites and services and encourage users to visit the site by linking to it.