Viral Loop

Effective customer acquisition method for product promotion

Alexander Sergeev avatar
Written by Alexander Sergeev
Updated over a week ago

Viral loop is a technique that helps the product to promote itself, when one user invites the others. The essence of such a promotion method is not in any special approach and activities, but in the features of the product itself: for example, a product owner offers special conditions for new users and consumers, such as discounts, free extra functions, premium accounts, etc. 

That is, it encourages consumers to use the product themselves, invite other users and receive promised bonuses - such a simple but effective way of promoting can significantly increase the number of users and, therefore, the popularity of the product.

Viral loop formula    

Like many techniques that are used in product marketing strategies, viral loop has its own checking formula with the value VC (Viral Coefficient), as follows:

This formula contains such the parameters as:

  • N is the average number of invitations per user who sent at least one invitation by himself

  • IC1 is the conversion from the invitations to the valid users

  • IC2 is the conversion from the valid users to the users that are actively sending out invitations.

After the calculation and multiplying these indicators out, there is a certain figure of the viral coefficient that determines the effectiveness of the product’s viral loop. Thus, it is possible to see the following results:

  • If VC is more than 1, the viral loop is going to be successful and profitable for the product development

  • If VC is less than 1, it is necessary to keep the viral loop under control and accurately monitor N, IC1 and IC2 indexes in order to make the loop more efficient

  • If VC is 0, the current viral loop does not work properly, and it will not bring any benefit

Viral loop strategies - how it works

Viral loop has three main strategies, or its principles, that demonstrate how and what the viral loop can offer the company in accordance with the current product model.

Viral loop strategy 1 - To give a lot and to get even more

It is a quite simple principle of cooperation between the product owner and the users. The more users are registered and invite new users (their social media friends, followers, contacts, etc.), the more benefits and so-called ‘perks’ these users receive. For example, a company promises the users different free functions or a trial period of the product use. Then, for active users who actively invites newcomers and extend the popularity of the product, there are additional pleasant moments like special discounts, holiday presents and other profitable things.

Viral loop strategy 2 - Social effect

This principle comes from the previous activities. When people see that a certain product is very popular and attracts more and more users, they intuitively begin to take interest in such product, they want to know more about it. Finally, they either adjoin most lovers of this product, or make a choice in favor of another one - but the point is that they tried and they were interested in it for a certain period! This is all about the social or mass effect, that is the essential part of the viral loop.

Viral loop strategy 3 - There is always a reason to pay

The viral loop welcomes low costs of the product promotion, so it is a common practice to pay the users for their activities of the new registered users invitation. Therefore, the users you paid turn into your real business partners, and they become even more interested in the development and use of your product. Score!

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