Creating Viral Loops To Drive Your 2017 Business Growth
Cassi Sturgul
Finally, funnels are easy to replicate. There are thousands of blogs that business owners can use to copy another business's growth strategy. That leaves little room for showing how your product is unique or stands out from the competition.
On episode 19 of the Growth Machine Marketing podcast, Amanda explains what a growth loop is, how she used one of them throughout her five years at The Knot, and how she plans to create viral loops within her startup, House of Wise.
Viral loops transform your most engaged users into your marketing team, inviting their friends and family members to your service. A number of viral companies, from Uber, Dropbox, Instagram, and LinkedIn, have used viral loops to increase their exposure.
The network effect is the ultimate marketing strategy. For a SaaS business, cultivating a network effect increases customer satisfaction and retention strengthens customer loyalty and creates a viral loop, a revolving door of customers. But how do you develop a network effect for your SaaS business, particularly within your online community?
A viral loop occurs whenever a potential customer interacts with your business before they are a customer themselves. For a viral loop to be successful, prospective customers should automatically see your product's value. Those touch-points are crucial to converting prospective customers into loyal, sticky customers.
Well, the way users share, repurpose, and distribute a piece of content to other channels, making it viral, helps us understand that there are certain patterns you can replicate in your business to set up a viral moment for your creation.
The viral loop is calculated using a viral coefficient that shows the exponential referral cycle accelerating business growth. It estimates the number of new users generated by an average client. The formula is as follows:
All viral loops are identical in structure and function. However, you must choose which form of viral loop is most appropriate for your product or service. As such, develop the one you believe is the best match for your target demographic and encourage people to share it with their friends and family.
At its core, this value-driven approach is what makes virality successful. But how do you actually know when your viral loops are successfully driving growth? And how do you optimize those viral loops to attract and engage more customers?
There are many benefits to creating a viral loop for your business. First, it is a very cost-effective way to market your product or service. The costs don't scale linearly, as they would with traditional marketing methods; rather, the more people who use your product or service, the less it costs to acquire new customers. In fact, once a viral loop takes off, there's zero marginal cost to acquire new customers.
Ultimately, viral loops are a powerful tool that can help businesses achieve exponential growth. But they need to be carefully planned and executed in order to be successful. By keeping the above elements in mind, you'll increase your chances of creating a viral loop that will take your business to the next level.
By incorporating paid advertising into a growth hacking strategy, businesses can reach new audiences, increase brand awareness, drive traffic and sales, and achieve their growth goals in a cost-effective and results-driven way.
"There are many ways you can grow your product. But when you use virality, it can have a huge impact on accelerating the growth of your business and lowering your customer acquisition costs. This is one of the areas that you can obviously invest in and you get compounding growth and returns over time as well."
"There are different ways to build in this kind of a notion of incentivized to growth loops into your business and it scales depending on whether or not you're a B2C organization or a B2B organization.
We tried everything from giving away shirts, AWS credit, and trial extensions. In some cases, the incentive can be as simple as a user sharing an achievement they've accomplished. So here, we're not really giving the user anything of monetary value but allowing them to build their own prestige or brand here."
Patrick also advises measuring your K-factor as part of your baseline. The K-factor is the output metric that is used to describe the growth rate of products, which is essentially the sum of all the viral loops in your product.
Community-led growth is a GTM strategy where you engineer ways to delight your audience, activate your advocates, and assist them in scaling the growth of your business and their rewards.
Create viral loops in your \u201Cdelight\u201D projects that bring value to the community (not just a social share button, in other words). Example: Miro, Airtable, and others allow you to create your own templates within their product, and you can share them out
As a consumer-focused company, you understand the significance of incentives for customer acquisition and retention. However, creating a growth loop is even more crucial than just offering incentives for sales. A growth loop helps drive continuous customer engagement, fosters brand loyalty and fuels sustainable business growth.
While the AARRR funnel is an effective strategy for understanding consumer behavior and attracting new customers, another system may work better. Incentive growth loops are an alternative acquisition and incentive strategy offering ongoing benefits for your marketing campaign.
Growth loops are a compounding growth strategy encouraging users to provide inputs that generate greater outputs, which the company can reinvest into future inputs. While the AARRR framework has a linear output, growth loops create compounding effects that drive sustainable growth and beneficial outcomes.
Sales loops are most valuable within sales-driven organizations, such as retail and SaaS. These types of incentive growth loops involve affiliate marketing or referral programs that give incentives to existing customers. Their main goal is to acquire new customers by incentivizing current ones.
Successful sales loops produce networks of customers who are continually referring new prospects, creating a strong loop of sustainable growth. Offering rewards as part of these incentive programs can increase their effectiveness.
Many companies are adjusting their incentive programs to focus on the growth loop model rather than the AARRR funnel. But is this shift necessary in your organization? Here are a few reasons sales companies have shifted from funnels to growth loops:
Incentives and rewards programs offer effective ways to attract new customers to your SaaS or retail company, but they have some downsides. These reward systems can be expensive, time-consuming, and challenging to perfect. But incorporating growth loops into product and your rewards program may remove these barriers.
Adding incentive growth loops to your retail or SaaS growth strategy could prove highly beneficial, and Giftbit can streamline the process. Giftbit lets you automate customer rewards by integrating them directly into your current CRM system. Sign up for Giftbit for free today to learn more.
Viral loop is a powerful tool that can help B2B SaaS (Software as a Service) companies achieve rapid and cost-effective growth. Customers and users value trust, so word-of-mouth referrals like viral loops hold so much potential to help build brand awareness and allow for profitability.
In a B2B SaaS (Software as a Service) context, viral loops can be used to rapidly increase adoption and drive revenue growth by encouraging existing customers to refer others to the service. This can be accomplished through a variety of mechanisms, such as referral programs, incentives for sharing or embedding sharing functionality directly into the product itself. An experienced development team with the right technical skills can help you to explore these options.
This viral loop helped Slack to achieve rapid growth and reach millions of users across thousands of organisations. By becoming an effective tool and making it easy for users to invite others, Slack was able to harness the power of word-of-mouth referrals and achieve significant growth. Slack is one of the most popular workplace communication platforms, serving businesses of all sizes around the world.
This viral loop helped Zoom achieve a high conversion rate and reach millions of users worldwide. By offering valuable features and making it easy for users to invite others, even those outside of the platform, Zoom was able to leverage the power of word-of-mouth referrals and drive significant growth. Zoom cemented itself as one of the most popular video communication platforms, serving businesses, schools, and individuals.
Viral loops are a powerful tool that can help B2B SaaS companies achieve rapid and cost-effective growth. By leveraging the power of viral marketing and referral campaigns, businesses can reach new customers, build brand awareness, and drive revenue growth. The success of companies like Dropbox, Slack, and Zoom demonstrates the potential of viral loops to drive growth for SaaS products and achieve significant impact.
What's more, viral loops can create a virtuous circle for businesses, whereby the more people who share your content, the more people are exposed to it, and the more likely they are to share it themselves. This can result in a powerful feedback loop that can propel a business to new levels of success.
Of course, not all businesses are able to achieve a viral loop. However, even if you're not able to achieve true virality, you can still benefit from creating content that is easily shareable and that people will want to share.
2. Viral loops: Viral loops refer to a growth strategy consisting of incentivizing users to invite others, thus creating a self-perpetuating cycle of growth. Startups can leverage referral programs, social sharing incentives, or user-generated content to encourage and amplify user-driven growth.
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