when viral gets out of hand

Price promotions via email campaigns are a much used way of incentivising consumers. However beware there are a number of promotions that have been so successful that they have had ultimately disastrous results for the company. The infamous Hoover promotion in August 1992 reportedly cost the company £48million plus the resignations of most of the marketing department. Ultimately the company was bought by the Italian company Candy as a result. It's important to do the math!

When propagated via the internet price promotions can quickly escalate out of control. The recent Thresher's promotion has received much press of late. Timed perfectly to coincide with shoppers looking for a Christmas booze bargain the promotion offered 40% off wine and champagne on orders above £500. Emails were originally sent out to trade and business partners only, however when the offer appeared on the South African wine company Stormhoek's website it was downloaded over 800,000 times and passed on virally.

The Threshers example shows the power of viral marketing. Viral marketing works by allowing individuals to propagate emails to their peer groups and therefore provides exponential growth of a brands message. It is the cyber version of 'word of mouth' and therefore utilises 'peer endorsement' which is one of the most powerful techniques that a promotional campaign can utilise.

The Threshers example above teaches marketers two important lessons. Firstly any promotional offer that is published must be within the financial parameters of the company offering the promotion i.e. do the math and secondly the terms and conditions must be watertight and be relevant to the target market of the promotion.

At the moment it is impossible to tell what the effect of the promotion will have on Threshers business and profits. It may prove to be as damaging as it was to Hoover however it may also have proved to be a PR master stroke.