Viral Strategies Presentation preview
Title Slide preview
Viral Cycle Slide preview
Viral Cycle Slide preview
Viral Growth Loop Slide preview
Viral Coefficient by Segment Slide preview
Viral Coefficient by Region Slide preview
Viral Growth Cycles Slide preview
Viral Growth Cycles Slide preview
Viral Growth Cycle Time (CT) Slide preview
Branching Rate Slide preview
Return on Ad Spend (ROAS) Slide preview
ROAS by Targeted Sectors Slide preview
Referral Growth Slide preview
Customer Acquisition Expenses Slide preview
Conversion by Region Slide preview
Conversion Rate Slide preview
New Referrals Added Slide preview
Daily Active Users Slide preview
Monthly Active Users (MUA) Slide preview
User Retention Analysis Slide preview
Cohort Growth Slide preview
Cohort by Region Slide preview
Switching Cost Slide preview
Switch Cost vs. Persona Slide preview
Business Model Overview Slide preview
User Engagement Dashboard Slide preview
Revenue Dashboard Slide preview
Critical Mass Slide preview
Communication Networks Slide preview
Network Density Slide preview
Network Effects Categories Slide preview
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Synopsis

How do some companies seem to grow exponentially? They use Viral Strategies. In this article, we'll explain 1) what viral strategies are, 2) how to incorporate them into your business, 3) the top viral tools you can use, and if you watch to the end, we'll explain how Tiktok became the fastest growing app of all time.

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Questions and answers
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Key calculations involved in identifying growth opportunities using viral strategies include:

1. Viral Coefficient: This is the number of new users an existing user generates. It's calculated by multiplying the number of invitations sent by the conversion rate. A viral coefficient greater than 1 indicates exponential growth.

2. Customer Acquisition Cost (CAC): This is the cost of acquiring a new customer. In viral strategies, the aim is to reduce this cost as much as possible.

3. Customer Lifetime Value (CLV): This is the total revenue a business can reasonably expect from a single customer account. It's important to ensure that CLV is greater than CAC for a sustainable business model.

4. Time to Virality: This is the time it takes for your product or service to go viral. The shorter the time, the better.

TikTok used several viral strategies to become the fastest growing app. Firstly, they targeted a younger demographic who are more likely to share content and invite friends. Secondly, they made it easy for users to create and share content, with a variety of tools and effects. They also encouraged user-generated content through challenges and hashtags. Lastly, they used AI algorithms to show users content they would like, keeping them engaged and on the app for longer periods.

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So how does a product become viral? Companies like Uber or Tinder that successfully created great viral products started with a niche demographic and expand with viral growth features. Uber targeted early adopters in the tech industry, so it hosted tech events and offered free rides to first-time users. It then built viral features into the app like promo and referral codes to accelerate word-of-mouth lead gen. Tinder copied Facebook's strategy and targeted colleges, specifically by sponsoring parties where you had to download the app to get in. Because you hoped your "crush" was on the app, you'd promote it to your friends as well. The more people who used it, the bigger the dating pool, and the more likely you'll find a date.

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A company that could benefit from implementing viral strategies is a new fitness app. The app could use referral codes to encourage current users to invite their friends. For each friend that signs up using the referral code, the current user could receive a reward, such as a free month of premium access. This strategy could help the app to quickly increase its user base, as each new user has the potential to bring in multiple additional users.

Viral strategies enhance business growth and customer acquisition by leveraging the power of word-of-mouth and network effects. Companies like Uber and Tinder have successfully used viral strategies to grow exponentially. They started with a niche demographic and expanded with viral growth features. For instance, Uber targeted early adopters in the tech industry and offered free rides to first-time users. It then built viral features into the app like promo and referral codes to accelerate word-of-mouth lead generation. Similarly, Tinder targeted colleges and sponsored parties where you had to download the app to get in, thereby increasing its user base. The more people use the product, the more they promote it to their friends, creating a viral effect.

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To supercharge your own growth, we've created a customizable Viral Strategies template that incorporates the top viral strategy tools available today. It includes slides on viral lead generation, viral growth loops, viral growth cycle time, return on ad spend, and conversion tracking, plus many more. Here's a breakdown of how to apply these tools to supercharge your own growth efforts.

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Some examples of companies that have successfully used viral strategies to scale their product include Dropbox, Hotmail, and Uber. Dropbox used a referral program where users could earn extra storage space by inviting friends to join the service. Hotmail included a simple line at the end of every email sent through its service: "Get your free email at Hotmail" which led to exponential user growth. Uber used promotional codes and discounts to incentivize users to invite their friends to the service.

The viral strategies template can be customized to suit different business needs by adjusting the elements such as viral lead generation, viral growth loops, viral growth cycle time, return on ad spend, and conversion tracking. These elements can be tailored according to the specific needs and goals of your business. For instance, if your business needs to focus more on lead generation, you can emphasize that part in the template. Similarly, if your business is more concerned about the return on ad spend, you can customize the template to reflect that. It's all about identifying your business needs and adjusting the template accordingly.

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Tool highlights

Viral lead generation

What Uber and Tinder did to grow was called "viral lead generation." This slide visualizes how viral lead gen works. To acquire a user, assume the base cost is five dollars. On Day 1, you've already built your app with certain features to incentivize the new user to share it. The branching rate is how many new people the first user shares the app with after Day 1. By Day 5, this number of shares plateaus at four new people. Thanks to the additional features you designed, your conversion rate of these additional shares to users is 50%. This means two of those four become users by Day 12. Thanks to your viral lead generation engine, since every new user brings in an additional three users, the true customer acquisition cost has dropped from five dollars to one dollar and sixty-seven cents.

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The conversion rate in the context of viral lead generation is significant as it determines the effectiveness of the viral strategy. It refers to the percentage of individuals who are shared the app (or product) and become users. A higher conversion rate means that a larger proportion of the individuals who are exposed to the app become users, thus increasing the overall user base and reducing the customer acquisition cost. This is crucial in viral lead generation as it amplifies the effect of each new user, as each new user can potentially bring in additional users.

Viral lead generation significantly reduces the customer acquisition cost. It works on the principle of users sharing the product or service with others in their network. For instance, if a user shares the product with four people, and two of them become users, the customer acquisition cost is effectively divided among more users. This means that the original cost of acquiring a customer, say five dollars, can drop significantly, for example, to one dollar and sixty-seven cents. This is because every new user brings in additional users, spreading the cost over a larger user base.

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Viral Cycle

The benefit of viral growth is to continuously lower customer acquisition costs as the quantity of users increases. Without more active viral growth strategies, your cost of acquisition remains fixed and doesn't decline over time, which makes growth hard. Plus, since even the companies that use viral growth strategies inevitably see their growth plateau, companies of all sizes and stages should use this slide as a reminder to proactively develop new features to jumpstart viral lead generation. (Slide 3)

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Viral lead gen timetimeline

If you want to tabularize the information, a line graph timeline slide tracks the user growth recorded across set periods of time with a line graph to visualize growth. across time. The cheat sheet breaks out the variables you'll track: initial customers on day zero; the branching… and conversion rates; the cycle time, aka the number of days it takes to complete a full viral cycle; and the viral coefficient, which is the number of invites divided by their conversion rate, and indicates how successful your strategies are. We'll explain both of these below. (Slide 4)

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Viral Cycle

Viral growth loop

So how do you calculate the viral coefficient? In an ideal scenario, you want a viral growth loop to be a positive feedback loop that feeds into and amplifies itself. This slide defines the viral growth loop. It begins with one new user. In this example, seventy-five percent of these users become brand advocates and share the product with seven others. Of those branching referrals, only fifty percent clicked through to the invitation. And of those, only forty percent converted to become a new user. So in this scenario, the viral coefficient is "1.05." This rate means that for every one hundred users you bring in, you'll get an additional hundred and five. Any number over one indicates you've got a viral growth loop on your hands. To learn about Tiktok's original viral growth loop, watch the end of the article. And if you wanna see me dance on TikTok, too bad cause that's never gonna happen. (Slide 5)

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Organizations can utilize time stamps to track the impact of new marketing initiatives or acquisition strategies on growth by using them to create cohorts. These cohorts can be based on the time when users were acquired or when a new marketing initiative was launched. By comparing the growth rates of different cohorts, organizations can measure the impact of their strategies. For example, if a new marketing initiative was launched in January, the organization can compare the growth rate of the January cohort to previous cohorts to measure the impact of the initiative. Similarly, time stamps can be used to track the growth rate of users acquired through different acquisition strategies.

The concept of cycle time plays a crucial role in the growth of a customer base in viral strategies. Cycle time refers to the time it takes for a customer to go through the process of discovering, using, and sharing your product or service. The shorter the cycle time, the faster your customer base will grow. This is because a shorter cycle time means customers are discovering, using, and sharing your product or service more quickly, leading to a faster rate of customer acquisition and growth. This concept is particularly important in viral strategies, where the goal is to rapidly increase your customer base through word-of-mouth and social sharing.

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Viral Growth Loop

Viral growth cycle

So what about "cycle time"? Cycle time makes a huge difference, as the lower the cycle time, the faster your customer base will grow. This slide breaks out cycles into cohorts, where one cycle's starting point is the end point of another. In cycle one, we started with ten users and ended with thirty. Cycle two begins with thirty users and grows to seventy, and so on. This tool is useful for organizations that want to utilize time stamps to track how changes in new marketing initiatives or acquisition strategies could impact upticks or declines in growth. (Slide 8)

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Viral Growth Cycles

How cycle time impacts growth

This slide visualizes how cycle time influences the overall growth trajectory. Each line is a separate scenario where the only difference is cycle time. As you can see, the royal blue line of five days yielded the highest result as it compounds on itself. Imagine how much of a difference it makes if these growth rates continue over a span of five years. Features can and should be designed to drive this cycle time down. Like referral systems that utilize time limits for promo codes to create a sense of urgency for their users to spread the word. You know, like those annoying pop-up notifications and marketing emails to remind you to subscribe? (Slide 10)

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Viral Growth Cycle Time (CT)

Return on ad spend

If you want to grow your user base, you'll likely need to spend money on ads, which is where the return on ad spend, or ROAS comes in. A decent goal for every team to strive for is a ROAS of one to break even. Anything above that is gravy; anything below, and you're advertising at a loss.

In this slide, the dividing line is the break-even point. The ROAS is tracked across three separate ad platforms, and the graph delineates at what point each ad source breaks even. This tool is useful for tracking and goal-setting. For example, if your current viral coefficient from Instagram is 1.7, you can visualize how reaching 2 would lower the days required to reach a ROAS of one below forty days. Some companies have longer ROAS timelines depending on their business model. Because freemium models allow users to enjoy certain features for free, they may delay paying. So if you're watching this because of an ad, please subscribe! Do it today - it'll raise our ROAS!* By the way, for more tools to calculate your customer acquisition costs, you can download our Customer Acquisition presentation template.

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A viral growth loop is a strategy where a product or service is marketed primarily through the network effects of existing users. In the case of TikTok, when users post their TikTok videos on other platforms, these videos are shared with all of that user's followers. This creates a loop where more and more people are exposed to TikTok, leading to exponential growth. For every user TikTok acquired through ad spend, it was estimated that they gained an additional 6.4 users due to this viral growth loop. This effectively reduced the cost of acquiring a new customer, contributing significantly to TikTok's success.

TikTok leveraged viral growth to reduce their cost of customer acquisition by creating a viral growth loop. When TikTok videos were posted on other platforms, they were shared with all that user's followers. This resulted in TikTok acquiring additional users without having to spend on ads for them. For instance, for every user TikTok acquired with their ad spend, they gained an additional 6.4 users through this viral growth loop. This meant that for every dollar spent on ads, TikTok saved $0.20 on acquiring a new customer.

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Return on Ad Spend (ROAS)

Conversion tracking

This slide breaks out the different global and regional conversion rates of your overall viral strategy. Let's say you want to increase your conversion rate in a specific region. You can compare the effect of a new feature on a conversion rate to the baseline rate with this slide. If the new feature drives the new rate lower than the baseline, it will do more harm than good. This slide can also be used to AB test two different features and determine which brings in higher conversion. In that scenario, add a line for an A and B line. Test both features in two test groups, then use the feature with the higher rate for a wider rollout. (Slide 17)

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Conversion Rate

Case study: TikTok

So how did Tiktok owner ByteDance create viral growth for its app that made it the fourth biggest social media company in only four years? Besides spending a billion dollars on PR and paid ads in 2018, Tiktok designed some specific viral features into its app to help it grow organically. It prioritized out-of-app shares in a world where social platforms wanted to create closed ecosystems to keep users engaged. TikTok knew it needed to leverage social sharing on other platforms to spread virally. That's why it's so easy to send a friend a TikTok, and why you always see videos reposted from TikTok on Instagram.

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As TikTok videos get posted on another platform, they are shared with all that users' followers. The Growth data scientist Justin Hilliard estimated that Tiktok acquired 6.4 additional users for every user that it acquired with that one billion ad spend. Hilliard found that this viral growth loop returned $0.20 of additional ad dollars TikTok didn't have to pay for a new customer with every dollar spent on ads. That is true viral lead gen.

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Conclusion

If you want to incorporate these viral growth strategies into your marketing initiatives, you need this presentation. Download the Viral Strategies presentation template for more slides on branching rate, viral coefficient by segment, new referral tracking, switching cost vs. defendability, and critical mass to save time and hours of work.

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