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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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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.

Some of the top viral tools that can be used to enhance business growth include social media platforms like Facebook, Instagram, and Twitter, content creation tools like Canva and Adobe Spark, email marketing tools like Mailchimp and Constant Contact, and SEO tools like Google Analytics and SEMrush. Additionally, video sharing platforms like YouTube and TikTok have proven to be effective for viral marketing.

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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.

Yes, there are numerous case studies that demonstrate the effectiveness of viral strategies. For instance, Uber and Tinder are two companies that have successfully used viral strategies to grow their user base. Uber started with a niche demographic in the tech industry, hosting tech events and offering free rides to first-time users. They then built viral features into their app, such as promo and referral codes, to accelerate word-of-mouth lead generation. Similarly, Tinder copied Facebook's strategy and targeted colleges, sponsoring parties where attendees had to download the app to get in. This encouraged users to promote the app to their friends, increasing the user base and the likelihood of finding a date.

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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.

Viral growth loops and cycle time play a crucial role in reducing the cost of customer acquisition. A viral growth loop is a mechanism where existing users bring in new users, typically through some form of referral or sharing. This can significantly reduce the cost of customer acquisition as it leverages the network of existing users rather than relying on paid advertising or other more costly methods of customer acquisition. The cycle time refers to the time it takes for this process to complete a loop. The shorter the cycle time, the faster the growth, as new users are acquired more quickly. Therefore, optimizing the viral growth loop and reducing the cycle time can lead to exponential growth and lower customer acquisition costs.

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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.

App features play a crucial role in incentivizing users to share the app. They can be designed to encourage sharing by providing value to the user for doing so. For instance, features could include rewards for sharing, such as access to premium content, discounts, or other benefits. Additionally, features that enhance the user experience can also motivate users to share the app with others. The more a user enjoys using an app, the more likely they are to recommend it to others. Therefore, creating an app with user-friendly and valuable features can significantly boost its virality.

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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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The Viral Strategies template can be used to scale a product and attract more customers by incorporating a high growth mindset. This involves developing new features to stimulate viral lead generation. The goal is to continuously lower customer acquisition costs as the number of users increases. Without active viral growth strategies, the cost of acquisition remains fixed and doesn't decline over time, making growth challenging. Even companies that use viral growth strategies may see their growth plateau, so it's crucial to proactively develop new features to reignite viral lead generation.

The viral coefficient, cycle time, and branching rate are key metrics in viral strategies. The viral coefficient measures how many new users an existing user generates. A viral coefficient greater than 1 indicates exponential growth. Cycle time refers to the time it takes for a user to invite others. Shorter cycle times can accelerate growth. The branching factor, or rate, refers to the number of people one person can realistically invite. These metrics together can help a company understand and optimize their viral growth strategies.

Developing new features is crucial in jumpstarting viral lead generation because it stimulates interest and engagement. New features can attract more users, encourage existing users to share the product with their network, and enhance the overall user experience. This can lead to a viral effect, where the product is rapidly and organically shared among users, thereby reducing the cost of customer acquisition and driving growth.

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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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There are several ways to increase the branching and conversion rates in a viral strategy. First, ensure your content is engaging and shareable. This can be achieved by creating content that is unique, relevant, and valuable to your target audience. Second, leverage social media platforms to reach a wider audience. Encourage users to share your content with their networks. Third, offer incentives for sharing. This could be in the form of discounts, exclusive content, or access to premium features. Lastly, continuously monitor and optimize your strategy based on performance metrics.

A line graph timeline slide can be used to track user growth by visualizing the growth across set periods of time. It can help in understanding the initial number of customers, the conversion rates, the number of days it takes to complete a full viral cycle, and the viral coefficient, which indicates the success of your strategies. This visual representation can provide a clear picture of how user growth is progressing over time.

Cycle time in a viral strategy refers to the number of days it takes to complete a full viral cycle. It is significant because it measures the speed at which a product or idea spreads. A shorter cycle time means that the product or idea is spreading quickly, which can lead to rapid growth. Conversely, a longer cycle time may indicate that the product or idea is not spreading as quickly, which could slow growth.

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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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When implementing a viral strategy, some key metrics to consider include the viral coefficient, the conversion rate, and the click-through rate. The viral coefficient measures how many new users an existing user can bring in. A viral coefficient greater than 1 indicates a successful viral growth loop. The conversion rate measures the percentage of users who become customers after clicking through an invitation. The click-through rate measures the percentage of users who click on a shared product link. Monitoring these metrics can help you understand the effectiveness of your viral strategy and make necessary adjustments.

The viral coefficient is a measure of a product's viral growth, specifically, how many new users an existing user generates. It begins with one new user. If this user becomes a brand advocate and shares the product with others, and a certain percentage of these referrals convert to become new users, this contributes to the viral coefficient. For instance, if the viral coefficient is 1.05, it means that for every 100 users you bring in, you'll get an additional 105. Any number over one indicates a viral growth loop.

Some examples of companies that have successfully implemented viral strategies include Facebook, Twitter, and TikTok. Facebook's "friend suggestion" feature and Twitter's "retweet" function are examples of viral strategies that have helped these platforms grow exponentially. TikTok's unique algorithm that pushes content to users based on their preferences and interactions has also contributed to its viral growth.

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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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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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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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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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The concept of viral coefficient, cycle time, and branching rate can be used to find growth opportunities in several ways. The viral coefficient measures how many new users an existing user can bring to your product or service. A higher viral coefficient means more organic growth. The cycle time is the period it takes for a user to invite others. Shorter cycle times can lead to faster growth. The branching factor, or rate, refers to the number of people that one person can effectively invite. By optimizing these three factors, you can significantly improve your product's growth rate.

A company like Uber could greatly benefit from implementing viral strategies. Uber's business model relies heavily on its user base for growth. By implementing a viral strategy such as a referral program, where existing users are incentivized to invite new users to the platform, Uber could potentially increase its user base exponentially. This would not only bring in more customers but also reduce the cost of acquisition.

The key topics covered in the "Viral Strategies" presentation enhance business strategy by providing insights into how to scale your product, attract more customers, and reduce the cost of acquisition. It offers a high growth mindset that can be incorporated into your business strategy. The presentation also provides tools for analyzing the effectiveness of different strategies, such as comparing the impact of a new feature on conversion rates to the baseline rate. This can help businesses avoid strategies that do more harm than good. Additionally, it provides a framework for AB testing different features to determine which brings in higher conversion, allowing for more effective strategy implementation.

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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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