Viral Loop

A viral loop is an automated marketing strategy that rewards customers who spread the word about an app, product, or service. This strategy benefits companies and products because it can help acquire more customers or users quickly and at low cost, as it spreads quickly in a self-perpetuating manner. Each user reaches more people, which leads to more users which increases customer adoption.

Viral loops are based on simple yet effective word-of-mouth references. When a product or service can gain widespread and quick visibility, it can grow exponentially. This is because the users who benefit from the product can act as “marketers” and can bring in new users and customers more quickly than a company’s marketing team through incentives such as discounts and prizes.

In traditional marketing, the broader customer base tends to be too geographically dispersed for cost-effective promotion. But with viral loops, a company can leverage its existing customer base to quickly reach more users, and even those who are located in geographically disparate areas. It is critical for companies to ensure that the rewards provided are significant enough to encourage customers to share their experiences and promote the product or service.

Viral loops can be designed to be ongoing – meaning the product will continue to gain more users through a prolonged promotion cycle. It can also be done in a series of time-limited campaigns that can promote rapid growth but have a predetermined time limit to help maintain a manageable customer volume.

An example of a viral loop can be seen in the popular messaging app 'WhatsApp'. When a user installs the app, they can invite friends using their contacts list. If the user's contact accepts the invitation, they get access to the app, and the inviting user also gets rewarded with perks such as 'free credits'. This incentivizes the user to promote the app to more people, and the cycle continues.