Categorized | Marketing

Viral Marketing – The Good, The Bad and The Ugly

Posted on 26 July 2006 by SonHouse

Have you ever seen that ad where the guys are sitting around a computer waiting for their first order to come in and all of sudden they start pouring in faster than they ever expected and the guys begin to panic?. I was lucky and fortunate enough to experience that over 7 years ago, well…sort of, in one of my first ever online marketing campaigns.

Well..I mentioned in my first post that my family had owned and operated an educational supply store in south Texas for some time. I moved to Austin in 1996 to open my own retail location in the same industry. Business was ok at first, but I was always trying to find ways to make more money. I quickly discovered that I could do just that online. So, I learned some HTML and built my first website in 1997. My online business moved along for the rest of 1997, 1998 and in 1999 I decided to really focus on online sales as my brick and mortar store was not doing well and I was thinking about closing it. Sales were relatively slow at first, but with some early SEO, before it was fashionable, some cpc through GOTO.com, and the help of ebay driving traffic to my store and the fact that I could process credit cards through my business, I was able to make additional revenue each day. This was before paypal, so I would get the customers to email or call in their credit card number..I even thought about accepting payments for other ebay members using my setup and taking a small cut for the trouble, missed that one..huh?

Anyway, I was pretty aggressive in my marketing efforts for the online store but noticed only a few products were selling well online. The same ones week after week. So I decided to dump all but a few best selling categories and see how that would work. I also decided to try something different, well different at the time. I thought about offering a small free sample of one of the products..it was a consumable type product, light weight, easy to ship that I could put together myself. My thinking was, sell the customer with a web page for this one product, offer the free sample, request the customer info, send it out, and sit back and wait for the orders to pour in. So, I learned how to submit a custom form to my email address and then I just waited. The first week, I received a few sample orders a day and would send them out with an order form, website info, etc. My cost on each sample was about .80 including the postage. This goes on for a few days, then I notice one morning, I get about 120 emails requesting the sample. I started to get a little excited…I quickly sent them all out that same day. I updated my form to ask where people were learning about the free sample so I could track what was going on. Well the next day I came in and checked my email and I could not believe what I saw. I hit the send and receive and watched an avalanche of email, over 5,000, rain down on me. Well I was excited to say the least but totally unprepared for the response. Over the next few weeks, I managed to rack up over 80,000 requests for samples of this one particular product. After looking through the emails I learned that “word of mouth” was the top entry in the field asking the user how they discovered our promotion.

Well, needless to say, I neither had the cash, $64,000, the samples or the staff to fill that many orders in a timely manner. To make matters worse, I had set up an autoresponder that would email the customer after about 2 weeks to see what they thought of the sample and if they would place an order. This same autoresponder would check in again every few weeks to “encourage” the customer to place an order, which was all fine and dandy for the first few thousand I managed to get out…for the rest of them, well..I had a lot of angry people replying to all those emails even though the sample was free. I was working as fast as I could to get the samples out, but it was not fast enough. I even put a statement on the site that free samples would take 6-8 weeks to deliver but the complaints started pouring in. People wanted to know where their free sample was and when were they going to get it.

Anyway, after a few weeks of trying to scrape together some cash, and send out as many samples as I could, I had to finally pull the plug on the whole thing, take the page down, kill the autoresponder and email the other 75,000 people telling them that the response was so overwhelming that I could not afford it and was not going to be able to send out the freebies.

I did start to receive some orders from the first few batches of samples that were sent out but it was not enough to really tell if the promotion would have worked.

What did I learn from this experiment? Well..the power of the internet is awesome and the power of viral “word of mouth” marketing is even more awesome Things happened fast and furious and if only I had had the financial resources to tweak that program, things might have turned out differently.

I’m currently working on reviving this product offering and have figured out a way to manufacture it myself. Stay tuned!

Viral Marketing..wow! Be prepared! you might just get what you asked for.

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  1. SonHouse Blues » Blog Archive » Product Manufacturing 101 Says:

    […] The product, I wrote a post about it last year, that I have been been manufaturing for the last 2 years is something for kids in the educational toy industry.  I have been making the product by hand and I recently invested in a machine that will help me scale my manufacturing 20 fold.  I had been researching these machines for years and felt they were still a little too expensive for what I was doing.  I finally found someone selling one of these machines, online, and we made a deal that I coudn’t turn down.  So I drove to meet this guy half way between Austin and Dallas, in Waco, to complete the transaction in a McDonald’s parking lot.  So I’ve got this machine in the back of my truck, and I have no idea really how it works.  The guy who sold it to me didn’t know much about it either, he just imports them from China and sells them on the side. […]

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