For years businesses have understood the power of word-of-mouth advertising; both positive and negative. Enough negative comments spread by unhappy customers can have a devastating impact, and it is obviously desirable to have people spreading the word about the positive attributes of a business's product or service. Yet until recently, although companies certainly have paid attention to popular buzz, marketing campaigns have not been planned based mostly, or entirely, on getting people to "spread the word." E-commerce has changed this. A form of word-of-mouth marketing known as viral marketing has proven to be an effective strategy in electronic commerce. The term "viral marketing" describes any tactic designed to encourage people to pass the word in ever-widening circles. This paper will explore this trend through the @ of an internet article entitled "The Six Simple Principles of Viral Marketing" (Wilson, 2000); and a look at how these principles were applied in a successful viral marketing plan by Hotmail.com.
The Six Principles
The six principles as outlined by Wilson (2001) are: "1) gives away products or services, 2) provides for effortless transfer, 3) scales easily from small to large, 4) exploits common motivations and behaviors, 5) utilizes existing communication networks and 6) takes advantage of others' resources." Hotmail.com utilized all of these and managed to establish itself as the largest independent e-mail provider on the Internet. One wondering what the point is may consider the large (seemingly unending) number of advertisements seen at the Hotmail.com website. The value of ad space grows with each new e-mail account Hotmail.com provides. As stated by Perreault and McC...
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...omputers already owned and used by the account holders. All Hotmail.com had to do was supply the mail servers and initiate the viral process by means of a small push to several thousand Internet users. After that it was simply a matter of waiting for the campaign to do its job.
Viral marketing is a strategy that can be used by almost all e-commerce businesses. They do not necessarily have to be an Internet based service such as Hotmail.com. Any website offering a free product or service, along with the caveat that the user must be willing accept a link or offer a recommendation, is likely to increase its site traffic manifold. This is comparable to what Perreault and McCarthy (1999) describe as pulling, which is using a promotion to get customers to ask for a product. An increase in traffic, and potential customers, would be beneficial to any business.
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