19 Jun
Posted by Marc as Internet Marketing 101, Market Research, eBay, Software, Reciprocity, Viral Marketing
In 1999, a group known as the Cult of the Dead Cow released a remote Windows administration system which caused quite a stir across the internet. This program, called Back Orifice, could be silently installed without the owner of the target computer knowing about it, and it would run silently in the background, providing anyone who knew the password complete control of that computer as long as it was connected to the internet.
This program was routinely used by hackers to gain control of other people’s computers, and the press had an absolute field day reporting how dangerous and malicious it was. Intrigued by this supposed “super trojan”, I downloaded a copy and proceeded to pick it apart to learn how it worked.
Included with the download was an administration tool that allowed you scan all the IP addresses in a C block to find infected computers. To my amazement, there were usually 10-20 computers infected in every C block that I scanned.
Every single one of those infected computers were completely accessible to me, or to anyone else who had the administration tool for this trojan. And when I say completely accessible, I mean completely accessible. I had access to those computers’ complete file systems - I could take whatever I wanted. I could upload any files or software that I wanted to the infected computer. I could run programs, edit files, surf the internet, even shut down the computer or make its CD ROM drive open and close.
For the next few days, I would scan for infected computers, login to them, and add a password to their Back Orifice install, effectively making it impossible for hackers to access these infected computers. I would then send them an email alerting them that their computer was infected, and provided uninstall instructions.
Most of the people with infected computers that I emailed replied back admitting to not being technical, and not understanding the uninstallation instructions (most of them didn’t even understand what the Windows Registry was, much less how to edit it). I was asked for a piece of software that would do the uninstall for them on numerous occasions.
I fired up Visual Basic and quickly knocked out a Back Orifice uninstaller program, and emailed it to all who had asked. Once they had run the uninstaller I built, they could use the information that I had given them to ensure that they were no longer infected.
During this process, I received scores of emails back from people expressing sincere thanks and appreciation for the information and the software. Fresh off my recent eBay Pepsi success, the entrepreneur in me quickly took over.
Over the next two days, I wrote a special report about this trojan which included information about what the trojan allowed hackers to do on your computer, instructions for detecting the trojan on your computer, and complete uninstall instructions. I bundled that with souped-up version of the uninstaller I had written (which would also detect the trojan for you), and I had my first infoproduct/software product.
Not having a website, I turned to eBay once again. I wrote up a quick auction description informing potential customers about the dangers of this trojan, and included screenshots I had taken of IP blocks showing lots of infected computers. I included links in the auction to news stories about the trojan. I used the emails that I had received back saying “Thank you so much for this great tool!” as testimonials in the auction. The price for this special report and software was $5.
Sales trickled in slowly. I was trying to use fear to sell and in this particular case, it wasn’t working very well. A lot of people were viewing the auction, but less than 1% were buying. I knew that the scarcity prinicple was a powerful sales technique, but I couldn’t find a way to apply it for this product. I couldn’t imagine using a fear/scarcity sales combo - could you imagine something like:
“You may be infected with this viscious trojan right now, but I’m only selling 100 copies of this tool that will fix it for you, so buy now before it’s too late!”
I dove into the marketing materials that I had been buying and reading and came across the Rule of Reciprocity. This rule works pretty much like this: When you receive something from another person, and you subconsiously place value on what you received, your normal sociological response will be to try and repay that person.
The Rule of Reciprocity is what is in effect when you sign up for someone’s newsletter and get real value from that newsletter. You didn’t pay for the news letter, but if the content is high quality, you have a basic sociological need to repay that person. This makes you much more accepting of promotions that the owner of the newsletter sends you.
Here’s how I leveraged Reciprocity for my anti-trojan tool: I gave the report portion away. After a few weeks of lackluster sales, I changed my auction description so that my special report WAS the auction description. I gave everyone all the information that they needed to learn what the trojan did, how to find out if it was on your computer, AND even how to remove it, step-by-step. I provided all the needed information free in the auction listing, and sold the software for people who didn’t want to manually remove the trojan, or for those who weren’t technical enough to do it themselves.
As a result of changing from fear-based selling to reciprocity selling, my sales increased by 1000%. A full 10% of all the people who viewed my auctions purchased the software. What’s more, the amount of traffic to my auctions tripled. As it turns out, people would stumble across my auction listing, follow my instructions to see if they were infected, and then email a link to my auction to their friends, so that they could check for infection.
I learned that actions or information seen as overly kind or generous can become very viral.
Now, a portion of that 1000% increase in sales can be attributed to the fact that I was now providing a way for people to see if they were infected or not, and those who discovered they were infected would be more apt to buy the software. However, I was making sales to people who were not infected as well (in fact, based on the emails I received from the buyers, I would say most of them weren’t infected). I would get emails that read:
“Thank you SO much for letting us know about this! I’m not infected but my sister’s computer is (I talked her through the steps over the phone). We both bought your removal software - even though I don’t need it now, I might in the future! We really appreciate your generosity
”
There it is, folks - kindness. By giving people all the information they needed to detect and remove the trojan, I was perceived as kind, generous, and “not out to make a quick buck”. So much so, that even people who didn’t have the trojan on their systems purchased the software to “thank” me for my generosity.
Look for ways to incorporate the Rule of Reciprocity into your marketing. Give people good, high quality content, and do it without asking anything in return. This will create a subconsious need to repay your kindness in the future, so that when you do want to sell your prospects something in the future, they will be more apt to read your marketing message, and to buy what you are selling. And if you’re giving people something of great perceived value, they are much more likely to share it with others, resulting in a snowballing viral effect.
Principles Used: Using Current Events for Market Research, Rule of Reciprocity, Viral Marketing
4 Responses
Saumil Patel
June 19th, 2006 at 10:41 pm
1I see how the codemonkey in you evolved !
Brilliant story and good education on the Rule of Reciprocity !
Reminds me of the one of the core lessons taught by Dr.Robert Cialdini, heard him speak at one of Stanford’s Alumni meetings (recording) - Principle of Reciprocation.
Also check out http://blog.guykawasaki.com/2006/04/book_review_inf.html - a short interview with Dr. Cialdini, while you are at the blog check it out .. its by someone called Guy Kawasaki … brilliant stuff there !
~ saumil
ianmac
June 20th, 2006 at 3:19 am
2Well, I have no difficulty giving people things for free. You can see my free html course in http://smarthomebiz.com/html1.html and on my http://studying-techniques.com/ I’m giving away an eBook about the easy way to write essays, and I’m putting a book about how to pass exams onto the site one page at a time.
My problem is getting anything back on the reciprocity principle.
Marc
June 27th, 2006 at 5:15 pm
3Saumil-
Dr. Cialdini is awesome - I love his book Influence.
Marc
David Jaeger
December 25th, 2006 at 1:32 am
4IanMac: the rule of reciprocity does not work if people don’t know what you are offering. Unfortunately, it requires alot of traffic.
You’ll get there!
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