Models of the diffusion and adoption of innovation are central to our understanding of marketing. Our basic marketing model describes how potential customers become customers through the act of buying. It stipulates customers decide to buy—or members decide to join—as the result of advertising or word of mouth.

  • The better your advertising content—and the greater its reach and frequency—the higher your advertising effectiveness will be. No surprises there.
  • People decide to buy because of word of mouth depending on the number and nature of interactions among potential customers and customers. The more frequent, favorable, and persuasive the interactions, the greater the buying rate due to word of mouth. The standard model of these interactions is derived in part from epidemiology—hence the phrase “going viral.”

The purpose of this video is to walk you through the key assumptions underpinning the marketing model. Obviously, the accumulation of members is at the very core of an economic model of a paid membership community. So, it’s worth some time exploring.