September 2002 - Issue 15

The Power of Viral Marketing

Introduction: Why Email?

Email marketing is fast becoming an area of investment for nonprofit organizations, and rightly so.  Many organizations think of email as a fundraising tool -- a supplemental method for direct response during fundraising campaigns.  Email is an attractive direct response vehicle because of its relative low cost compared to direct mail and telemarketing.  Email also enables organizations to conduct campaigns in a timely and quick manner.  Others think of email as a cost-effective way to distribute their newsletters or other regular communications to constituents. 

In any case, the economics of email distribution tend to be much lower than the costs of a paper- or phone-based communications or campaigns.  One especially effective and efficient way to use email is through what's called "viral marketing."  To understand how and when to use viral marketing campaigns, it's important to first understand broadly how email can help build strong constituents relationships.

Use email to build relationships

Email-based solicitation will only be successful if constituents generally receive value-added communications from an organization.  One organization, which Convio interviewed, spent several months building an email file (a list of email addresses for prospects and members), then sent a solicitation as its first email.  Not surprisingly, the response from recipients was poor. The campaign yielded few gifts and a large number of people opted out from receiving further communications.  A smarter approach is to use email as a tool to initiate relationships with interested parties (prospects) and then for engaging supporters to take some type of mission-critical action. An ongoing stream of regular communications helps cement relationships and primes constituents for eventual email and direct mail solicitation.  Email enables an organization to move from a transactional relationship "please donate now" to a much richer level of communication and relationship.  Email also can be an effective mechanism for building relationships with non-donor constituents, e.g., volunteers, recruits, clients who receive services, advocates, etc.

With the right tools in place, personalized email messages can speak to a constituent's unique interests.  By addressing supporters by name, and acknowledging individuals for specific actions or gifts, personalized emails easily can strengthen relationships with a large number of supporters.  Furthermore, frequent email interactions with supporters can be a very cost-effective and powerful way to learn about constituents' interests and motivations.  An organization can do this by monitoring which links constituents click on and assigning segmentation flags.  For example, one email communiqué could include content about planned giving.  The organization can monitor and flag supporters who click on the specific link to read more, and then segment them into a new list of people interested in planned giving for subsequent marketing purposes.  The for-profit sector refers to this type of communications and marketing strategy as online Customer Relationship Management (CRM).  Nonprofits can apply this type of strategy to their own operations a strategy that Convio refers to as Constituent Relationship Management (CRM).

Developing a Constituent Relationship Management Strategy

Nonprofits should start developing a Constituent Relationship Management (CRM) plan by first identifying key constituencies.  Then, the organization should evaluate its effectiveness in four key areas, which map to the lifecycle of an organization's relationship with constituents:

• Outreach reach new constituents who have the potential to become viable prospects for the group.
• Cultivation engage prospects to create relationships with them.  For example, send relevant communiqués on topics of interest to each individual.  
• Action ask constituents to take action, e.g., make a gift, advocate, volunteer etc.   If the organization has been communicating with constituents to provide timely, relevant information, constituents are more likely to feel involved and motivated to take action such as donating money, volunteering, contacting lawmakers about policy matters or simply referring friends.
• Loyalty retain constituents.  By catering to the interests and needs of individuals through targeted email messages, nonprofit organizations can build longer lasting, more valuable relationships with supporters and increase retention rates.

Email is a critical tool for achieving success in each of these phases.  Viral marketing campaigns, in particular, can be very effective during the outreach phase.

Outreach: The Power of Viral Marketing

How can email help an organization reach new prospects?  Start by taking a creative approach think beyond the initial recipient of an  email message.  Viral marketing, a relatively young term in the marketer's lexicon, refers to generating awareness and prompting consumption of products and/or services through word-of-mouth or online communications.  A great example in the for-profit world is Hotmail.com.  The Internet-based free email service Hotmail.com spread by having a promotion at the bottom of every email "Get your free Web-based email account at http://www.hotmail.com/ ."  The term "viral marketing" was coined to illustrate that awareness and consumption spread contagiously like a virus.  (Of course, the term does not have anything to do with computer viruses.)

Viral Marketing and Nonprofits

Most nonprofit organizations take a narrow view of email communications.  Many regard email simply as a way to send messages with a specific call-to-action (usually asking existing donors for contribution) or as a conduit for a general communiqué such as a newsletter.  This approach overlooks emails' "viral" potential.  An organization can spread its message far beyond its initial target audience and extend its reach to new constituents by sending compelling content that recipients are motivated to forward to others.  The process is elegantly simple.  A person receives an email that he finds compelling.  He then takes an action, for example, he might donate to the organization and/or forward the email on to friends.  Although some friends may ignore or delete the message, others are inspired to take action they also might donate and/or send the email to other friends.  Unlike paper- or mail-based communications, supporters can easily forward messages to friends who, in turn, take action and forward the message.  Imagine the exponential power of hundreds of supporters forwarding messages to friends if a person forwards a message to 10 friends who each forward it to 10 friends, and this happens five times, the message would reach 100,000 people.  The notion of viral marketing does not just apply to a solicitation.  Viral marketing also applies to general communiqués.  For instance, the American Society for the Prevention of Cruelty to Animals (ASPCA) regularly finds that up to 9 percent of the "click-throughs" on links in ASPCA emails are from people who have received a forwarded message.

Another viral marketing tactic that is effective for nonprofits is  "tell-a-friend" where Web site visitors alert friends about interesting content or send e-greeting cards.  For example when a person finds  a news article on an organization's Web site that he thinks might interest a friend, he clicks a link, which pops open a window that allows him to email the page's URL (or Web address) to his friend.  When his friend checks email, he sees a message from a trusted source, increasing the likelihood that he will open the message and click on the link to visit the recommended Web site.  Similarly, some groups have good success with e-greeting cards on their Web site that visitors can send to friends.  When a friend clicks on the card's message, he is prompted to visit the nonprofit's Web site.  In many instances, these friends end up registering on the site and/or donating to the organization.  Planned Parenthood Federation of America posted Mother's Day cards on its Web site and promoted e-cards through email.  Within a week, 5,000 new people had registered on the site as result of receiving an e-card.

Remember secondary audiences when preparing emails

Good email marketing systems allow an organization to track forward rates (or how often email messages are passed to other people), so test different messages to determine which messages are more likely to be forwarded.  Email newsletters are the most commonly forwarded type of message.  For some advocacy-oriented organizations, the most frequently forwarded email messages are action alerts and even donation appeals. 

Viral marketing is a powerful strategy in today's wired world it enables nonprofits to easily, frequently and cost-effectively reach out to hundreds of thousands of prospects.  It would be difficult, if not impossible, to replicate these impacts and efficiencies in the direct mail world.