'We will leverage our viral marketing efforts, resulting in widespread adoption of our revolutionary ‘no-revenue' product, as customers recommend us to their friends.' — Any of a million forgettable business plans

Blech. Let‘s get real. Stocks are tanking, and VCs have boldly declared startups should have a revenue model. In this brave new world, the old "new rules" don't apply, and the new "old rules" say business plans need more than New Economy Buzzword Hype.

Nonetheless, every plan I read will blow the world away with "viral marketing." They almost always use the phrase incorrectly, Let's explore the correct use of Viral Marketing.

The best plan: don‘t use buzzwords like "viral marketing." Buzzwords rarely impress your readers. If you can't say it in plain English (or your native language), then it‘s probably fluff and doesn't belong in a serious document.

If you must use "viral marketing," use it correctly. Viral marketing campaigns piggy back on your product, exposing non-customers to your company automatically when your existing customers use the product.

Hotmail spawned the viral marketing revolution. Hotmail is web-based e-mail that appends "Try hotmail!" to every outgoing message. Without any user action, every e-mail advertises the service to the message recipient, who (at that time) probably didn't know about Hotmail.

Hotmail was weak viral marketing, since the recipient could ignore the ad without trying the service for themselves. Weak viral marketing requires voluntary action. MCI's successful "Friends and Family" plan gave discounts for calling people in your plan circle if they were also on the plan. This made customers persuade friends to join the plan, and friends could refuse without trying it. The need for both customer and recipient action made this weak..

Strong viral marketing requires the non-customer to try the service. To receive money e-mailed with the "Paypal" payment service, a recipient must register with the service. Since registration means receiving money, Paypal recipients are highly motivated to join. Evite online invitations also require recipients to use the service to confirm an event invitation. Other strong viral applications include Yahoo!'s shared calendar service and their briefcase service.

Pressuring customers isn't viral marketing. If you're selling manufacturers a production planning system, and the manufacturers pressure their distributors to switch to the same system for convenience, that's simple peer pressure. It may be effective, but it isn't viral marketing, since using the system normally doesn't automatically expose new prospects to the system.

Word of mouth is neither viral nor marketing. Since it depends on the customer acting voluntarily, it isn't viral. Since it's what the customer does, it's not marketing (marketing is what your company does; not what your customers do).

In short, Viral marketing works in transaction oriented businesses where a customer transacts with a non-customer. The opportunity comes in controlling that interaction so the non-customer must be told about your product (weak viral) or actually made to try the product (strong viral) without action by the current customer.

Who is Stever?

The host of The Get-It-Done Guy's Quick and Dirty Tips to Work Less and Do More (#1 in iTunes business, top 20 overall*), Stever Robbins has been a businessperson and entrepreneur since the late 1970s. He is currently working on his 10th startup, launching the book based on his podcast (Get-it-Done Guy's 9 Steps to Work Less and Do More, due September 2010), and producing, co-writing, and performing a one-man musical based on the book.

He also co-designed and teaches Building Social Capital for Personal and Professional Success as an adjunct lecturer at Babson College, where his previous job with working with the President's Office, setting and implementing strategy to turn Babson into the world's premiere source of applied entrepreneurial thinking and action.

www.steverrobbins.com