? How to Achieve ACTUAL Exponential Growth in a SaaS, Product or Service Biz?
/// AKA. LEVERAGING VIRAL LOOP STACKING \\\
Let me paint a picture…
You’re finally at a point in your business where you’re generating customers through advertising or your SEO has traction and you’re seeing a good flow of customers come in the door.
Bit by bit the traction is getting better, more folks through the door every day and you’re seeing a nice straight 45 degree angle of growth.
Every now and again someone refers in a new customer or shares a post on Facebook about how awesome you are and you’ll get a couple folks turning into customers - but for the most part you’re paying for a customer, and getting a customer…
Not a bad situation to be in right?
For most businesses, this is a dream scenario…
That is, until:
- Facebook changes their ad algorithm
- Cyber Monday comes around and your cost per click 5x’s
- Google removes 2 ad spots in the top results
- Or any platform change really
For many, that’s the reality. It’s all in a state of working well, until the platform(s) they’ve built their business on fail them.
? The Unicorns ?
When your goal is building a unicorn (a company valued over $1 billion), you can’t be subject to the whims of a single marketing channel…
You need all your growth and marketing efforts to work together to continuously evolve and get better.
This is where virality comes into play in the form of viral loops - or a system that helps you turn one new customer in the door into 2 or more.
One of the most commonly known being AirBnB’s referral viral loop where you can offer $25 in credit to any of your friends or family, and in exchange you’ll get $25 in credit when they book.
That viral loop enabled AirBnB to have a set cost per viral acquisition of $50 (a minimal cost considering their ability to enable first time users to become 2nd time bookers) that scales as long as people are willing to give their friends money in exchange for getting money….a no brainer
If you really want to deep dive on viral loops, I posted a video about it a bit back - so I won’t go into heavy details on what they are or anything, you can just watch the video here: https://vimeo.com/201189641/fcda124dac
Assuming you know what viral loops are, you’re probably thinking “well all I need is one viral loop in my customer acquisition or activation flow and I’ll see that coveted hockey stick growth - then I’ll be on track to become a unicorn!”
WRONG!
? The Viral Loop Myth ?
All a single viral loop will do is enhance your growth and multiply your results - hockey stick growth and the path to a unicorn (in your lifetime) happens at the exponential growth level.
With a single viral loop in play, you may see something like this at the best of performance:
In rare occasions something close to exponential growth is possible if your viral loop is insanely strong - an example: Taskworld
They’re a project management tool and their main viral loop was during the initial on-boarding they’d ask you to invite your colleagues to join you - but they’d make it super easy by just logging into your email provider and showing you a big list of everyone you ever emailed.
The aim action being to just hit the big green “send” button instead of picking and choosing folks individually.
Out of every dozen or so folks who signed up, one would send a blast to every single person on their list. That one person usually ended up bringing in a few dozen customers.
Obviously, it’s not the most scalable viral loop as it gets into the arena of spam quickly, so it was later removed and revamped to just be a simple referral where you’d enter in the emails you want to invite.
But imagine if you took a viral loop that’s multiplying your customer base (one into two) and stacked that on top of another viral loop in your customer journey….
Turn one customer into two with the first viral loop…
And then two customers into four before they finish their activation phase…
And maybe even turn four customers into eight once activated over the customers lifetime…
That’s where you go from straight 45 degree angle growth, to a inflection point that brings hyper speed growth.
Something like this:
That’s where the Uber comes into play.
? The Biggest Taxi Company Without Taxis ?
If you’re a user, you probably know about Uber’s AirBnB type offer to give $20 in credit and get $20 in credit when you refer someone. A similar referral program exists for the driver side of things.
But that’s one of many viral loops they’ve built into their customer journey that’s fuelling such massive adoption.
They leverage a lot of different viral loops, some not triggered by a typical customer journey, some inherit in the journey to get one lone Uber customer to invite their friends, family and circle of influence.
When you’re in the app, there’s a few convenient features that have inherent virality built-in - like the split a fare feature. If you’re going out to dinner with friends and all 6 of you have to get a cab - the traditional way would have been to just all pitch in a few bucks and you’re set.
These days with fewer folks carrying cash, let alone small bills, the simple solution for convenience is Uber - but while tools like Venmo exist (I only found out about this thing like a couple months ago) - do you really want to setup an account and all to collect a few bucks?
HELL NO!
You’ll want to just split the fare in the same app you’re using to hail your cab, while putting the hassle on your friends to download and sign up for Uber to cover what they owe.
That simple functionality easily turns that single Uber customer into 1 or more new customers who will likely activate with the free credit Uber gives them for their first ride rather quickly.
There’s also a lot of cross play between the Uber Eats app and the Uber ride app, as well as quite a few other functions built in to drive virality outside of the app (time of arrival sharing) that are just pure genius.
But I think you get where I’m going.
? The Viral Loop Stacked Journey ?
But, here’s a simple journey to explain:
?? Uber acquires James Smith (YAY!)
? James Smith is heading to meet 4 friends for dinner, he’s running late so he’ll share his time of arrival with his 4 friends so they know.
? One of James Smith’s friends at the restaurant thinks he’ll rather ride a taxi home than take the subway, so he clicks on the link from James’ time sharing notification and signs up for Uber.
??Uber acquires John Hammer
? James and his friends finish dinner, James and John decide to split a cab since they’re going the same way - as is one of their other friends, Mark
? They hail an Uber and send Mark a link to sign up so they can split the fare
??Uber acquires Mark Money
? Everyone arrives home and END
In the course of one night, Uber just landed 3 customers as a result of:
1. Providing a good customer experience that’s just convenient [James]
2. Being top of mind passively through user actions [John]
3. Guilt tripping (just kidding - but really it’s just another form of convenience around paying for a cab - typically a very annoying affair with coins and cash) [Mark]
And of course that story would continue and continue where all three would likely go on to convert more and more customers.
? But Uber's a tech company, I run a pool company, this won’t apply to me ?
Again……WRONG!
While you may not be able to apply half a dozen viral loops into your service business - ANY business that can scale beyond $200k a year theoretically can implement multiple viral loops.
I say theoretically because the bottom line is most folks won’t do what it takes to deliver a level of service or build in a level of virality that’s needed to get to exponential growth.
It’s all possible, the main limitation is what limiting beliefs you have on what's possible.
? So…what’s next? ?
If you have a scenario where you want to implement a viral loop (or several) but:
? Need a second set of eyes
? Can’t quite figure out the best implementation
? Really have no idea where to start….
Than comments below or InMail me and I’m happy to have a strategy session to talk through it. I’ll send you a link to book a call and we can dive right in!