It’s no secret that in order to survive, your business has to grow. How that growth looks might differ from business to business. You might not be interested in adding locations, franchising, or expanding your product lines right now, but one thing you do need to think about is customer acquisition. There are lots of strategies your business can implement to gain new customers, but one that has proven very successful for many well-known brands is known as a viral loop. This growth engine has boosted the bottom lines of big brands like Uber, Dropbox, and Airbnb, but the beauty of it is that you can easily put this idea to work for your small business.
How Does a Viral Loop Work?
For a business, going viral isn’t all just luck. You can plan for it and make it part of your marketing strategy. A great way to do this is by building a viral loop. Simply put, a viral loop is a way to get your current customers to refer you to others, who will in turn refer you to even more people, and so on, so that you – hopefully! – create a lasting loop of continuous referrals that leads to continuous growth.
Here’s how the process works, broken down into stages:
- The “install” or “purchase” stage – A new customer tries your product or service.
- The “desire to share” stage – When you gain this new customer, the first thing you need to do is to advertise a referral program to them, and invite them to share your product or service with their friends. How do you ensure that they’ll do this? Offer them an incentive! So, if your customer shares your product with their network, and one of their friends eventually becomes a customer, then your original customer is rewarded in some way, like with a discount or free gift.
- The “share” stage – Your customer is intrigued by your referral program, and takes you up on the offer.
- The “see” stage –Hopefully some of your original customer’s friends will see the message from their friend, trust their friend’s opinion on your product, and decide to try it. Now the “install” and “desire to share” stage begin again!
Notice that viral loops are different from viral marketing, which uses highly shareable content to get your brand noticed. Viral loops use the same principle of creating a cycle of sharing, but the aim is more customer acquisition focused.
Types of Viral Loops
All viral loops use the same basic structure as above, but there are different types, or different ways to incentivize your customers to share your product with their friends. For example, the following things could be used to motivate your customers to get in your loop:
- Savings – Free stuff is always tempting! You can offer your customer a discount, free item, or credit for each successful referral.
- Value – Similar to offering savings, you can also offer an incentive that both your customer and their friend get.
- Charity– Many businesses nowadays are getting in on the “buy one, give one” model. In the viral loop model, you promise to give something to a charitable cause for each referral that your customer makes.
- Friendship – Similar to offering value, you can motivate your customer to offer their friend something that is “helpful” to them. For example, Uber offers free rides to each customer referred.
Creating a Successful Viral Loop
Viral loops follow one basic structure, but there are ways to tailor them to your business: what you choose to offer your customers is totally up to you. There are things, though, that you need to consider in order to create a successful viral loop.
- Put some thought into it – Figure out how and when you’re going to invite your customers into your referral loop. Will your entry point be right after they make a purchase? How will you make the offer stand out and look enticing?
- Make it worth everyone’s while! – You need to make sure your referral incentive is something that customers will find valuable, but you also want to make sure that it’s cost-effective for your business! You should also consider an incentive that rewards both your original customer and their referral, making it more tempting for both of them to get on board.
- Don’t close the loop – If you can, make the incentives you offer cumulative, so that customers can continue to earn rewards – and continue referring more and more people.
- Keep it simple – Don’t make your incentive system overly complicated, or give customers too many steps to go through to refer their friend and get their reward.
Going viral can really grow your business, so don’t sit back and just hope that it happens to your business. There are solid strategies that you can try to get people engaged with your business, and eager to share it with others. With just a little work and creativity on your part, you can create a viral loop that will hopefully get your customer base growing exponentially – and will boost your bottom line!