Rocket GTM 🚀 - Virality ♽
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Rocket GTM 🚀 - Virality ♽
Virality as an acquisition channel
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Viral growth
Viral growth can be a powerful method of distributing product and acquiring customers. It's adored because, generally speaking, it's free and when done well it can lead to explosive growth.
A viral loop occurs when a new user invites one or more new users who then become customers.
If each new user only invites one additional user then growth will not be exponential. If each new user invites on average less then one additional user then growth will fizzle out.The real power of viral growth is when each new user invites more than one additional user each time.
Growth isn't determined simply by the number of users each person invites, it also depends on how many of those users actually convert. Ultimately there are three factors you must optimize for:
Number of new users
Number of referrals those users make
% of referrals that convert to customers
Now we know the math behind virality, how are some of the best companies actually putting this into action?
Building viral distribution directly into your product
Melio
Melio increased the "average number of referrals" by building viral distribution directly into their product.
In a recent episode of the 'Not Boring' newsletter Packy McCormick unpacks how Melio grew 2,000% during a global pandemic focusing on viral growth.
Melio is a B2B platform that helps SME's pay, and receive invoices. You can think of Melio like Bill.com for SME's. The product is simple, beautiful, and powered by a product-led growth engine.
When a Melio customer needs to pay their supplier, they send a payment request to the vendor.
Suppliers aren't required to use Melio to receive payments but they are incentivized to sign up because Melio offers faster payment processing if they do. When a user sends their supplier an invoice payment, the very nature of doing so informs the supplier of Melio's existence.
💡 Similar to when a user sends a Zoom link the recipient is made aware off the app and downloads it
The number of referrals made thanks to the product workflow skyrocketed, and they enhanced the % of referrals that converted by creating incentives for them to use their product.
Melio managed to spread through the wine merchant distribution network like wildfire. You can see a visual representation of what that looks like below.
The best VC backed startups aim for 300% growth YoY, but Melio grew by 2,000% in the same year everyone was going through a pandemic. Their growth rate helped them achieve a $1.3 billion dollar valuation after only three years in existence.
Intercom
Founded in 2011, Intercom was last valued in 2018 at $1.26 billion and have secured over $240M in venture capital to date. Intercom's success has been powered by three core factors:
Word-of-mouth
Content marketing
Viral distribution built-into their product
Intercom, a live chat bot that helps companies speak with customers directly on their website, leveraged widgets to propel distribution. On every chat there is a link at the bottom saying "we run on Intercom" with a link to their website.
Intercom has over 30,000 business as customers. Not all of those companies display this link. Some pay for the premium plan allowing them to remove the branding. But still, a huge percentage of their customers are publicly promoting intercom for them for free.
If 10% of companies display the link, that's 3,000 chat bots. If each website received 1,000 unique visitors a month that would mean 3 million people every month see intercom without a salesperson ever reaching out.
Widgets a formidable distribution channel but the thousands of backlinks to intercom's website also drive an insane amount of backlink juice. Google uses backlinks to judge a websites domain authority and decide whether to push blog posts higher in Google search. Widgets don't just help with distribution, they help your content marketing too.
A double whammy 💪
Producthunt is another example of the embedded widget method. Producthunt users share a widget on their website to show their audience.
Delighting customers with product
Revolut started as a B2C FinTech product that enables people to send and receive money in different currencies without FX fees.
In 3.5 years they grew to over 4 million users. They achieved this rapid growth by intentionally building viral loops, not only into their product, but also their offline and online marketing.
Users generate content after product delight
Revolut share user-generated content online
Existing are incentivized to refer new users through promotions
The product itself has viral distribution baked in
Revolut delight customers within the very first experience. The card packaging (at the time) was so unique and beautiful that everyone felt compelled to take photos and share on social media. Owning a Revolut card became a status icon.
People even make Youtube videos unboxing their new card. Revolut re-shares user-generated content online, which encourages people to share it even more.
Each new user told more people about Revolut because of the experience they had, Revolut's marketing team sharing this content online them amplifies the reach even more.
People sharing their love for Revolut on Instagram which then gets repurposed for marketing assets.
Incentivized referrals
Revolut also incentivized in-app referrals by offering a free metal card (a premium offering) to users who invited five of their friends.
Although incentivized referrals can work well, it's important to note that people are incentivized by both money and emotions.
People want to refer products they love to friends because it makes them look good, they become someone 'in-the-know' and add value to their network.
Monetary incentives add fuel to the fire of course. But they work when there is already a desire to share in the first place. If you rely on monetary incentives alone you can attract unwanted behavior where people game the system purely for financial reward and not love for your product.
Implicate your customers in your journey
Revolut launched a crowdfunding campaign which raised £3.8M from 4,260 investors. These investors were mainly customers.
Not only did Revolut have customers who loved their product experience, but they're now investors. These people have an even greater incentive to spread the word.
Revolut successfully turned their customers into investors and salespeople at the same time.
Limitations
Above we give examples of how WoM and product can promote viral growth. But there are some limitations. Take Dooly for example, a note taking app for salespeople making it 10x faster to update Salesforce.
The product has a level of virality built-in because salespeople will share notes with other colleagues which promotes discoverability. However, growth through product is limited to people within the organization.
Calendly on the other hand is a product used by both users internally and externally. Every time someone sends a friend a calendly invite that friend now becomes aware of Calendly. Growth from product usage is not capped to within the existing organization. It can spread a lot further.
If your product limits the reach of virality, fear not. WoM tends to break past organizational barriers because people share products with other friends simply because they love it, not because they have to use it together.
For example, Stripe didn't require engineers from outside companies to use the product for it to be useful. But engineers told other engineers in other companies, simply because they loved it.
“Initially [Stripe] very much spread through a word of mouth process. That was surprising to us because it’s a payment system not a social network so it’s not something you’d think would have any virality whatsoever. But it became clear that everything else was so bad and so painful to work with that people actually were selling this to their friends.” - Interview with TechZing
Product delight rather than product usage can be a powerful way to create viral distribution.
You either have it or you don't
Of course, you may be reading this thinking "How can I get unlimited virality thanks to my product", but the reality is not all products be used as a distribution channel.
In fact most products won't be a good fit for this growth mechanism. Your product determines your product-channel fit. Products that are valuable only through multiple users, like social networks, or payment infrastructures, naturally have virality baked in. Your job is to enhance it not create it.
Easter egg marketing
Easter egg marketing promotes viral growth by enhancing the spread of word-of-mouth. Here are a few examples:
Go to Google and type "do a barrel roll" and see what happens 😉
Siri's quirky responses to rude questions
Pokémon shortcuts
Siri's responses to quirky questions got a lot of attention, the press even wrote about them.
An easter egg is an inside joke or a hidden feature. When users find out about them they enter the exclusive circle of "people in the know". Of course, they tell their friends because what's the point of being "in the know" if your friends don't know you're in the know?
These types of methods are specifically designed to get people talking about you and evangelize an existing user base by making them feel special.
When done well they cause word of mouth to go viral.
Exclusivity catalyzes word of mouth
Viral growth is faster when more people are talking about your product.
Exclusivity can act as a catalyst because people want to show off that they are "in the know" and you're not.
A recent example is Clubhouse, a drop-in audio chat. Clubhouse created exclusivity by making their app available by "invite-only". Each user was limited to sending only two invites.
Clubhouse managed to get people going crazy over their product, before they had even seen the value of using it. All thanks to exclusivity.
By artificially restricting growth they in fact created it.
Clubhouse now boasts 10+ million users, primarily driven by WoM.
Wrapping it up 🌯
For viral growth to work you need to increase the number of referrals each user makes and increase the rate that each referral converts.
Common methods for doing both are:
Influencing word-of-mouth through delightful product experiences
Influencing word-of-mouth through viral marketing stunts
Building viral distribution directly into your product (example widgets)
Incentivizing users to refer friends or colleagues: using both monetary and emotional incentives
Artificially creating scarcity and exclusivity by restricting access (example waiting lists)
Viral growth from product usage can be capped within an organization, if that's the nature of your product perhaps its best to focus on creating word-of-mouth virality.
Not all products will work well for a viral growth engine, but if yours is one of them, you now have a blueprint.
If you got this far, then thanks for sticking around.
Have a great week 💜