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Has 'Viral Marketing' Gotten Out of Hand - and Out of Touch?

This article explores the fine line between viral marketing and spam. Learn how to reach and out touch your customers without offending them!

In a recent edition of our local newspaper, The Philadelphia Inquirer, there was a disturbing story about how a mortgage loan company in Phoenix, Arizona had sent 'spam' advertising messages which appeared on the screens of thousands of wireless phone customers. Not only were the messages not requested, but these customers had to pay to retrieve them.

In the United States, phone numbers are allocated to wireless companies in blocks of 9,999, all beginning with the same three-digit prefix following the area code. The text messaging address for each mobile phone is derived from the phone number assigned to each customer's handset and the wireless company's name. This means that an advertiser can simply choose any three digit prefix in an area code and send a message to 10,000 people by changing the last four digits after the prefix.

One industry analyst noted that this is just the tip of the iceberg. This type of spam is cheap and easy for advertisers to use. Wireless text messaging is growing rapidly in the U.S.; and, while some carriers are taking precautions to protect their customers from text message advertising, so far neither the direct marketing industry nor the federal government has been able to control this form of spam. As the president of the mortgage company noted, the advertising had brought in new clients and "There still isn't any rule against e-mailing." On-line, the concept of 'permission marketing' is similarly tossed aside each day with the receipt of unsolicited promotional e-mails.

We call this indiscriminate solicitation of prospective customers the 'Casonova Complex', reflective of the 18th century Italian adventurer, perhaps best known for his many female 'conquests'. In the haste to bring in customers, companies can often forget to court the right customers, those who represent the best long-term revenue potential, or who won't overtax the company's customer service and support structure.

If offline instances of the Casanova Complex are a disease, then it is an epidemic among Internet companies. Many online retail sites have engaged in sweepstakes programs. Their objectives, they say, are to create 'viral' promotions which create excitement for their sites and build their databases of available names both inexpensively and quickly. In one instance, 4anything.com, a portal site which runs more than one thousand web sites featuring links to other sites, signed up 50,000 registrants in a "Win Up To $4,000" game. Another sweepstakes program secured 126,000 registrants. EBags' "Million-Air" sweepstakes, offering one million air miles to the winner, generated over 60,000 names in ninety days, almost all of whom were new to the site.

The big issue for any of these sites is - do these promotions and schemes draw attractive customers, who can then be cultivated over time through the various marketing tools available today? And, once these customers are on board, are companies doing enough of the right things to keep them? Or, is this another extrapolation of the Casanova Complex? As one site marketing executive said: "This is a great low-cost way for us to acquire new names. The jury's still out on how many of those new people will come back." Companies involved in developing or using promotional tools like sweepstakes, unsolicited e-mail, or wireless spam. seem inclined, though, at least for the moment, to believe that these possibilities generally don't apply to them.

For traditional off-line companies, the Internet may be 'commoditizing' their industry or undermining customer relationships. Many brick and mortar CEO's sat that a key corporate goal is to transition more of their offline customers to online usage. Why? Because an on-line transaction costs dramatically less than a brick and mortar transaction, there is less risk for service error, and the company can more effectively capture and leverage information from an online transaction, to cite a few advantages. Certainly, the transactional advantages of e-commerce are very appealing. But what about the effects on loyalty, especially for new customers?

One of the important ways both online and offline companies can discipline themselves to avoid the Casonova Complex is to apply personalization in all contact with customers, both new and established. This, at least, gives companies a better chance of establishing a value, viral relationship with these customers.

While it's been estimated that over eighty percent of e-commerce sites have customer and visitor e-mail personalization capabilities, only four percent of the sites used personaization in follow-on marketing campaigns. For web sites favoring incentive devices like sweepstakes and frontal assault e-mail programs to attract potential customers, personalized communication is the perhaps the best opportunity to demonstrate ongoing interest in customers, especially new ones.

Personalization is at the heart of the 'relationship' in successful online CRM programs. Ultimately, it's what makes any CRM effort viral.

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