Dropbox is a cloud-based digital storage company founded in 2007 by Drew Houston and Arash Ferdowsi who were frustrated by the inability to easily access files when working across multiple computers. They set out to create a service that would enable instant access to digital files no matter your location or platform.
I heard about Dropbox through an email invitation send to me by one of my contacts. Most of the time I do not pay much attention to spammed invitation requests but the Dropbox one was simple and seemed it like a really useful service. During the sign-up process I was encouraged to pass the Dropbox invite on to my own contacts and if one of them signed up I would receive more storage for free. This was a great incentive and I signed up 8 more people thus doubling my free space allotment.
This form of viral marketing can be extremely powerful once it achieves a critical mass and the cost to Dropbox is probably less than a dollar per new customer acquisition (the only cost being the additional 250MB of free storage). In this way existing customers essentially become a very effective sales force.
Aside from the costs to get a clever marketing intern (beer, pizza, and letter of recommendation?) and the software development to include the referral process, marketing materials don’t really have to be produced. I think the strategy cost less than $5,000 to implement.