Chapter 9 Flashcards
we call something viral if
it spreads widely and rapidly from one consumer to another
Viral Coefficient
First, note that the more friends (on average) each of your friends can convince to adopt the app, the more viral we can consider it. We call this number of other people your average friend can convince to adopt the app a viral coefficient.
Note that this viral coefficient is a combination of two components:
First, it increases with the number of people your friend shares the information about the app with.
Second, the coefficient increases with the probability of adoption (conditional on learning about the app from a friend).
Although the viral coefficient determines how widely the app will spread, another critical factor is
how fast the adoption happens.
Viral Loop Example
1) Customer first sees your application
2) Customer decides to try your application
3) Decides they like the app enough to invite friends
4) Creates invitation, looks up addresses, sends invites
5) Friend receives invitation
6) Friend decides to take a look
Only once all steps have been completed in this viral loop is
the adoption accomplished, and this friend now re-starts the adoption cycle.
We refer to the time between one adoption and the other as
viral cycle time.
The shorter the viral cycle time (the faster it takes to go through the whole viral loop) and the larger the viral coefficient…
…the more viral the process.
The shorter the viral cycle time (the faster it takes to go through the whole viral loop) and the larger the viral coefficient…
…the more viral the process.
four observations about what helps make the process more viral:
1) Sharing with others should be easy.
2) Sharing mechanism should drive conversion (i.e., increase the probability of adoption upon learning about it).
3) Adopting (e.g., receiving a link, opening an app or browser, watching a video) should be as fast as possible, thus leading to shorter viral cycle time.
4) The time from adoption to sharing with others should be as short as possible, thus leading to shorter viral cycle time.
VMC
Viral Marketing Campaign
Typically, a VMC involves…
…seeding, whereby a firm sends product samples to a selected group of consumers (seeds) and asks them to generate WOM about that product and share with other consumers (masses). This approach makes VMCs very different from traditional dissemination of product-related information:
firms are increasingly asking seeded consumers to generate WOM about their products in the form of
posts to online forums or social media websites, or as reviews on retail websites.
For example, a recent industry study by the American Marketing Association and the Word of Mouth Marketing Association reports that
one-third of marketers either have run or plan to run campaigns in which samples are seeded with customers, and three-quarters either have used or plan to use consumers to start spreading WOM.
What makes viral marketing so popular? This is due to two key assumptions:
1) Information from a social source (e.g., a friend) is more influential than when it comes directly from a company.
2) The cost of reaching and converting a consumer segment is lower with social media channels than with traditional channels.
Once you decided that launching a VMC would be optimal in the context of your product, the first question you would need to address is…
…who you should select as initial seeds.
it is important to include both __ __ an __ in your group of seed customers.
social hubs and pumps
it is important to add as additional criteria for seed selection such impact-driving consumer characteristics as being a
product category expert, being passionate about the product, and/or being easy to relate to.
Is it enough to select the right seeds for your VMC to be successful?
Only if the barriers to activation are very low.
marketing interventions are needed to “nudge” seeds to spread product-related information, even for social pumps. Such interventions usually involve a combination of two categories of incentives…
…extrinsic and intrinsic.
Extrinsic incentives
typically involve offering some material or monetary rewards in exchange for seeds performing a certain set of agreed-upon actions, usually associated with creating product-related content and sharing it.
Intrinsic incentives
are designed for triggering seeds’ intrinsic motivation for performing various tasks facilitating information flow over their social connections (and benefiting the company behind VMC). The tasks should be designed so that they tap into consumers’ needs and desires. Such needs may include relatedness (need to interact with people with similar interests), purpose (feeling needed), and status (need to feel superior to others).
Note that while it is possible to combine extrinsic and intrinsic rewards in one campaign, the research found that when applied to tasks that require creativity (e.g., generating original product-related content)…
…extrinsic rewards often harm intrinsic motivation.
Finally, it is important to put together a schedule of providing various incentives throughout the campaign. If all (or most of) incentives happen to occur within a short time period, then…
…seeds will likely stop creating and disseminating product-related information after that period ends.
