This chapter starts by analyzing paper-based pass-it-on promotions which have been used to market music clubs, phone companies, even soap. Tell-A-Friend promotions aren't new, but they have become more powerful on the Internet. Because each customer can reproduce information instantly and spread it to dozens or even thousands of others, this form of Internet marketing is called "viral marketing." In the same way that the common cold spreads through sneezes, coughs, and handshakes, your offer now spreads through e-cards, electronic coupons, and invite-a-friend e-mails. In the following excerpt I discuss the instant-messaging service ICQ.

Viral marketing still has the strongest effect if your product can be somehow incorporated into the communication between two people. This includes phone systems (MCI), electronic postcards (Blue Mountain), free e-mail (Hotmail), and the communications tool that someone is inventing in his or her garage as you're reading this chapter. Look at what happened with ICQ. This instant-messaging service is not that useful to you if your friends don't have it, too, so you're likely to start telling all your friends about it, encouraging them to download the ICQ software.

An interesting thing about ICQ is their marketing—or the lack thereof. When journalist Ami Ginsburg came to interview the young Israeli founders, all the "marketing" they could show was a brochure they had once produced but that was hardly ever used. They simply didn't do marketing as we know it. All their efforts are directed at motivating the user to spread the word. They seemed to understand that as much as people liked the service, they wouldn't necessarily go out of their way to promote it. So they tried to make it very easy to spread the word. For example, they use the standard e-mail that will invite your friend to join, but the software can also be instructed to scan your address book and send all your friends invitation letters. Telemarketers from ICQ will never call you up during dinner the way MCI did. Their idea is to build a tool that includes an inherent mechanism for spreading the word and then letting it grow. When a structure like this works, there is no need to nag customers. "The less you do, the more it grows," Ted Leonsis of AOL, the company that now owns ICQ, told Newsweek.

Also in this chapter: • Have Your Customers Interact • Prompt Your Customer to Spread the Word • Should I Give Incentives for Referrals? • Multilevel Marketing—the Ultimate Buzz?