Introduction: Referrals and Virality

Questions answered in this module

• What are the different virality types?
• Which type is best for our product/brand?
• If an incentives program is best for us, what kind of incentive should I offer?
• What kinds of tools can I use to create virality?

Overview‌

What is it about your product that makes it “spread” from user to user? Why would users want—or even feel the need—to share it?

Virality is what happens when people spread the word about a product while using it. It’s user-spread growth.

There are four virality types. The first three are “organic”—they happen naturally through product use. The last one is “inorganic” because it involves an incentive.

• Word-of-mouth virality: when users tell others about a product because they like it so much.
• Pull virality: when users invite others to a product because it improves their experience of that product, or because the product has little or no value unless others are on it (e.g., Slack, PayPal, Zoom, and Facebook are all better with others).
• Push virality: when real-world product usage increases its exposure.
• Incentivized virality: when users are incentivized to invite others to a product, for instance through cash, a discount, or rewards points. This is the virality type that typical referral programs belong to.

Any of these can lead to customer acquisition—and a lower CAC.

In the startup world, virality is highly desirable. It increases a brand’s recognition, popularity, and user base. (The origin of the term—viruses going “viral”—isn’t quite as positive, but it does paint a picture of how quickly something can spread through increased exposure.)

The measure marketers use here is the viral coefficient: the number of people a user recommends or exposes a product to who actually buy. If your average user gets three other people to buy from you, your coefficient is three.

No matter what type of virality works for your product, you want to avoid coercing users into referring it. They'll need to want to do it on their own. That's the key to virality.

We’ll help you understand if virality can be a major producer of growth for your company, and if so, which tactic(s) are best suited for you.

Client story

One of our clients is a coding bootcamp that trains people to get entry-level software engineering jobs in months. One of the big revenue drivers we found for them was a referral strategy. But it’s not a traditional one.

Specifically, we had instructors email students right after they accepted a job offer. The timing was key—at that point, their satisfaction with the program was at its peak.

They asked the student if they had any friends whose lives would genuinely change from the program. They made it easy for the student to make a personal introduction by forwarding an email.

This simple strategy became a referral engine for them.

Not all referral programs require a referral link or monetary incentive.