3 Types of Viral Loops: Growing Your Customer Pool [Part 2]

3 Types of Viral Loops: Growing Your Customer Pool [Part 2]

Have you ever wondered how some companies seem to grow so quickly? They have a product that is doing well, and then it just explodes. Is it a lucky coincidence, or is there a secret ingredient to their marketing campaigns?

Well, it’s neither, actually, because the lead-up is a well-defined and well-executed strategy, not a coincidence. And there’s no secret, not anymore, that at the center stage of this strategy is a viral loop.

A viral loop is a type of marketing technique that will help your company grow by increasing your customer pool, but how does it work? Let’s find that out based on three main types of loops.

What Is the Basic Mechanism of a Viral Loop?

A viral loop is a marketing technique that encourages customers to refer new customers to the product or service. This can be done through incentives such as discounts, free products, or early access to new features. The goal is to create a system where customers are continually referring new users or buyers, which increases the customer pool and drives growth.

Viral loops are an effective way to drive growth and facilitate word-of-mouth marketing – a powerful tool for growing your business and expanding your customer base.

Basic Mechanism of a Viral Loop

Types of Viral Loops

Types of Viral Loops

Viral loops can be divided into three main types based on the nature of a user’s contact with a product or service. So let’s discuss them in more detail and figure out what constitutes each type.

Organic Viral Loops

Organic loops mainly happen due to the word-of-mouth mechanism, but they also involve other factors. Such viral loops are built into products or services so users can easily share content with their followers, friends, fans, and family members through social media channels, like Facebook and Twitter.

Organic viral loops do not offer any incentives from the company's end aside from the product. But users are naturally motivated to share content with their friends and followers, without any rewards or induced motivation from the organization creating the product or service.

Several factors facilitate organic viral loops:

  • Word of Mouth – Users talk about a product or service to their audience (friends, family, coworkers, followers, etc.).
  • Content Virality – Users share entertaining, informative, or valuable content on social media.
  • Inherent Virality – Users gain value when other people sign up (e.g., for Instagram or Facebook) because their connections grow.
  • Collaboration – Users are encouraged to work together to achieve a common goal. For example, in Trello, a task management tool, users can invite others to collaborate on tasks by sharing a special link.
  • Communication – Users are also encouraged to communicate with each other on a social networking platform. For example, Slack is meant for communication between many people, which means more people need to join in order for that to happen.

What Constitutes an Organic Viral Loop?

  • Nature of the trigger. In order for any type of viral loop to work, there have to be easy steps and simple actions so users can do what is required without much effort.
  • Trigger frequency. The more frequently a user gets exposed to triggers, the better their chance of action (though it shouldn’t be so frequent it’s spammy).
  • Response rate. It's not enough for the trigger frequency to be high, as many triggers often result in no response from users who may have been exposed to them several times. Then, the response rate is the percentage of users who take action after being exposed to a trigger.

Casual Viral Loops

These are viral loops based on the idea of a customer introducing your brand to another person who would become interested in it. These loops typically don't involve any direct incentives but rather rely on marketing efforts that encourage customers to bring their friends, family members, or coworkers onto the platform because they think those people will enjoy it too.

These loops can be subdivided into three categories:

  • Embedded Loop. A company embeds a viral loop into its product or service, which means users must be brought onto the platform in order for it to work.
  • Physical Content Loop. As the name suggests, users are encouraged to share physical content with one another, which leads to an increase in their social networks/friends lists and allows them access to more people on the platform.
  • Awards Loop. This is where users introduce products to a broad audience with awards, certifications and etc.

What Constitutes a Casual Contact Viral Loop?

  • Branching. For the best results, there has to be a high branching factor, which means users need to be able to communicate with a whole lot of people at the same time.
  • Time. If it takes longer for someone who has been exposed to a trigger to join the platform, it’s less likely they will join.
  • Ripple Effect. It's what happens when a user refers someone to the platform, and they take action. This creates a ripple effect where more people are exposed to the brand and start taking action as well.

Incentivized Viral Loops

As the name suggests, incentivized viral loops involve providing rewards or incentives to users to get their friends and followers onto the platform. These loops are often based on referral marketing programs, such as the ones used by companies like Uber.

Incentivized viral loops rely on a reward system, so they usually only work for products or services with a low cost to entry, as customers need to be convinced about their value before they're willing to go out and encourage their friends and family members to sign up too. There are three types of incentives used for this type of viral loop:

  • Money: This is where people are paid for getting their friends and followers to join the platform.
  • Content: Some platforms offer exclusive access or additional content to users who get their audiences to join.
  • Features / Product Access: Some platforms offer exclusive features or product access to users who get their audiences to join.

What Constitutes an Incentivized Viral Loop?

  • Meaningfulness. This involves making sure people understand why the incentive will be of value to them. The more meaningful it is, the better the results will be.
  • Alignment. This means having a strong alignment between users on both sides of the loop (existing and potential), which can happen when there's a mutual benefit or some kind of symmetry.
  • Positioning. This is about making sure that people are aware that the platform exists in order to get them involved in the incentivized viral loops.

Types of Rewards

Different types of rewards are provided by the different types of viral loops. These include:

  • Free products – a product that is given away for free, such as when Dropbox gives away extra storage for referring new users
  • Internal currency – different types of currency that can be earned within the product itself
  • Discounts – a discount from your company on a partner company’s products (Zola, for example, allows people to save money by buying gifts from other businesses that are registered with them.)
  • Company swag – free or branded merchandise offered by a company on a larger scale
  • Exclusive content – content offered by a company to its customers exclusively through methods like email newsletters, videos on YouTube channels, or access to certain events
  • Early access – when a product allows people to have early access or beta keys for certain products that are still in development (This practice can easily be abused by companies, so it needs to be monitored carefully.)
  • Access to private communities – allowing customers to join exclusive forums and groups that can provide them with new insights and opportunities

While the different types of viral loops have different incentives, triggers, and rewards, they all intersect in one way or another. So, to add some clarity to the meaning of each type, let’s review some real-life viral loop examples.

Organic Viral Loop Examples

Communication: Slack

Slack is an online, business-oriented chat app that makes collaboration easy. It's super simple to use, and it facilitates keeping track of all the important conversations happening in your workplace.

Slack is made up of channels that work like chat rooms. You can create as many channels as you want, and each one can focus on a different topic or project. Within each channel, you and your coworkers can have a conversation by typing in the text box at the bottom of the screen.

There’s one “but,” though — you need to be invited into a business’s workspace.

Slack Viral Loop

Slack's Value Proposition

  • Collaboration and transparency: Slack makes it easy for coworkers to communicate with each other and see what everyone is working on. This helps keep projects moving forward and eliminates the need for constant status updates.
  • Integrations: Slack integrates with tons of other apps you probably already use at work, like Dropbox, Google Drive, Zendesk, and 1000 more. This makes it easy to send important files directly from one app to another without having to jump back and forth between different programs.

Steps to Achieving an Organic Viral Loop

There are several steps that encourage users to complete the loop, but the target audience is mostly business owners and managers who are willing to create a workspace and invite coworkers:

  1. See an ad – sign up for the product. Slack uses social media to push organic traffic to its website and generate new users. Third-party integrations also push organic traffic to their website. Slack also has a referral program that lets you earn credit for inviting your friends to sign up.
  2. Invite teammates. When someone signs up for Slack, they invite their coworkers.
  3. Recommend. After using Slack, a coworker might refer a friend to share their positive experience with Slack or create their own workspace. Of course, then they add new users.

The more people use Slack, the more likely it is to continue growing its customer pool. And that's a good thing for businesses looking for better ways to collaborate.

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