Will Marlow

I received an invitation yesterday to attend a barbecue from an old friend from college.  He just returned from a "Birthright Israel" trip, which is a Jewish-Israeli charity that pays (over $400 million over the last ten years) to bring Jewish people who live in other countries to visit Israel for 10 day trips.

I just learned that upon return from the trip, Birthright Israel will reimburse the travelers for the costs associated with a welcome home party for themselves and as many guests as they wish to invite.  All the traveler needs to do is take a photograph of all the guests with the food and drinks, and they will be reimbursed. 

From a word of mouth marketing perspective, this is very, very smart.  If you are spending a huge amount of money on one key, necessary activity that is responsible for most of your costs, you need to continually ask yourself: how can I derive more value from that activity?  For example, if you have a fundraising event or a reunion once a year, but you don't arrange for a photographer (or if you don't position disposable digital cameras at strategic locations for the guests to use), then you lose out on gaining lots of permanent assets that you could use to promote next year's event.  You're already paying for the cost of the event - if you pay a little more, you can exponentially increase impact.

Or, if you are doing anything that is truly remarkable (in other words, something that people like to talk about, such as traveling), but you aren't encouraging people to talk to their friends in a number of ways about it (both offline at a party, or online on Twitter and Facebook), you're missing out on very important opportunities.

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A lot of people think (or hope) that one of their ideas or marketing materials will somehow "go viral," but most people don't put much time into thinking about what actually causes something to spread virally.  Without doing too much math, here's the basics of how something spreads virally: You start with your initial userbase (let's say it's 100 users).  A percentage of your userbase (for easy math, let's say 10%) will invite 10 people to check out your idea or product. Of those 10 invites they send out, let's assume 10% accept the invitation and become new users.  You add these new users to your original userbase.  But you also should assume (for easy math) that your attrition rate is 10%, so you subtract 10% from your initial userbase.  This represents one wave of viral growth that will then repeat itself to continue the trend.  (In this example, of course, you're losing the same number of users that you're gaining.)

But here's how it gets tricky: you can assume that your viral growth will get worse over time, because in the second, third, and fourth waves of growth, you can expect more and more invitations to go out to the same people, which means your conversion rate (which started out at 10%) may plummet as invitations reach people who are already users, or who have already rejected invitations.  So people begin adopting it at a lower rate, while your attrition rate is likely to stay the same.  This means that each wave of growth is smaller, until eventually it stops.  As Andrew Chen explains it, each "new batch of users needs to exceed the previous batch in order to "go viral."

What can you do with this information?  Well, the most important thing you can do is set measurable goals for viral activity to guide your decisions and planning to avoid wasting time and resources.  If you know what you're looking for (adoption rate; conversion rate of new users; attrition rate of your base over time; the size of the universe of users), you can actually measure the factors that have the greatest impact on your success and you can learn how to improve results over time.  Like most useful things, viral activity isn't guided by one enormous X-factor that either is present or absent.  If you know the rules, you can make it happen.

PS - If you want to go deeper into viral models, follow this link to read Andrew Chen's stuff.  I will return to this topic periodically, and I hope my posts are helpful on this subject, but if there's a better place than Chen's blog to go for an in depth, technical analysis of viral products and marketing, I'm unaware of it.

Will Marlow co-founded AlumniFidelity to help his clients reposition their fundraising to benefit from Web 2.0 technology and marketing techniques. He’s working with clients such as UVA, the College of William & Mary, the University of Oklahoma, Bowling Green State University, Randolph Macon College, and he loves nothing better than a thorny marketing challenge.  Email him at will@alumnifidelity.com.  

Here is the most helpful advice I've received so far on blogging.  Some points seem to contradict other points, but I've found it all helpful when taken together.

I like the free e-book format as "primers" for some topics, and I hope more are written in the future.