If you’re just joining us, we are about to examine the most important part of viral marketing. So you’ve come at a good a time.
To provide some context, we’re currently in the third phase of our Creating Your Viral Marketing Engine in 15 Steps. The two previous phases we covered were:
- Viral Marketing Structure and the 6 magical questions to successfully map your viral loop
- Viral Marketing Optimization and the 5 simple steps to achieve a lucrative conversion cycle
Now that we’re all caught up, let’s explore the end-all, be-all of why we’re here – a central aspect of viral marketing that’s worth its weight in gold (and then some).
Viral Value: A Requirement for Viral Marketing Success
Very few products are capable of exclusively using viral growth as their primary growth engine. But it’s not their fault. Most marketers, heads of growth, and founders have NOT been educated in viral growth mechanics. And even then rarely do they give it much thought until after they’ve finished development. Which is a mistake.
Before you can create a product that can grow, you need one thing first:
I’m not talking about value to YOU.
I’m talking about value to YOUR CUSTOMERS. They’re your REAL boss. You cannot succeed in the long run without first satisfying them. So to generate large amounts of revenue, you must consistently and repeatedly deliver value to your customers.
You must offer so much value that your customers are willing to trade you something valuable (e.g. money) for the product or service you’re offering.
In simplistic terms, you’re bartering; you’re creating value, and you’re getting value in return. This might sound like Business 101, and that’s because it is. But many businesses forget this because it’s all too easy to fall into the trap of looking at things through our own perspectives more than through the eyes of our customers.
You don’t have to do something crazy or tabloid-worthy in order to become remarkable or valuable in the eyes of your users. Value can be created simply by solving a common problem very well. When you add remarkability to that value, by delivering it in a way that inspires customers to tell others about it . . . well then, my friend, you’ve stumbled upon viral value.
Why Customers Buy and Why Customers Talk
Consider this pattern of perception:
- People visit your site because they think you may have value they want.
- People buy from you because you’ve convinced them that you have enough new value (your product) to part with the existing value they have (money).
- People share or invite others because you’ve convinced them that you can offer additional value (elevated social standing, incentives, etc.) in exchange for the risk of parting with the existing value they have (their current social standing in the eyes of their network).
Perceived value is the foundation needed for users to complete your sales funnel. It’s also the foundation needed for users to complete your viral loop.
However, there’s one key difference between completing your sales funnel versus your viral loop.
If users buy your product and it ends up being a mistake, nobody else has to know. They can choose to publicly complain (i.e. leave bad reviews), but this is a voluntary and relatively rare action.
However, if users SHARE your product and it ends up being a mistake, that mistake is public.
They put their own credibility on the line to promote you, and as it’s often more difficult to build and maintain social credibility than it is to make a few bucks, this can be more detrimental.
This public mistake is the perceived cost, and it’s what you have to ensure your perceived value outweighs in order to get (and keep) your viral marketing machine humming like a champ.
You win when you can successfully demonstrate enough perceived value in the minds of your users to outweigh or erase the perceived cost. In this case you replace the fear of losing social credibility with a feeling of being “in the know.”
This then plants the idea in the minds of your users that sharing or inviting others will actually INCREASE their social credibility.
You Can’t Buy Viral Value
A common mistake is to confuse a viral incentive as being the only form of viral value you need to offer.
Sure, supplying extrinsic rewards and incentives can augment the rate and frequency at which users send invites. But unless your incentives are ridiculously outlandish (which slashes profitability), it won’t convince a user to do something they don’t see any value in otherwise.
Take PayPal for example.
Viral Value Success Story: PayPal
When PayPal appeared on the scene users received $20 for every friend they referred to the service, who in turn also got $20 for joining. A pretty nice incentive. Who doesn’t love free money, am I right?
However, the real key to PayPal’s viral marketing success was that this incentive was not their core value.
PayPal’s core value was the ability to send and receive money between people. The cash bonus simply pushed users on the fence over the edge, sparking them to take more immediate and profound action.
If PayPal hadn’t had this viral core value, they would NOT have acquired active, high-quality customers. Sure, they would have still seen invites sent out from people trying to game the referral program and make a quick twenty, but PayPal would NOT have experienced substantial and profound viral growth in a cost-effective way.
As former PayPal CEO Elon Musk said,
“We started off first by offering people $20 if they opened an account. And $20 if they referred anyone. And then we dropped it to $10. And we dropped it to $5. As the network got bigger and bigger, the value of the network itself exceeded any sort of carrot that we could offer.”
Overcoming “Inviter’s Guilt”
A common phenomenon in any viral marketing program is what I call inviter’s guilt. This is when a user will see the value THEY get from inviting others, but the guilt they feel about exploiting their friends to acquire that value prevents them from taking action.
Thankfully, this is easily overcome. You simply need to inject double-sided value into your viral value proposition, and augment it with double-sided viral incentive marketing.
In the PayPal example above, as a member, YOU got viral value from using the service and being able to send and receive money online. As a sweet bonus you also got $20 for every additional member you referred.
But if that’s as far as things went, PayPal’s viral growth would have been inhibited by inviter’s guilt. So they added a double-sided viral value prop and a double-sided incentive.
Not only did a user see the value their friend would get from joining PayPal (i.e. they too could now use a quick and secure way to send money), but their friend also received $20 for signing up.
Get the picture?
Viral Value Success Story: Dropbox
PayPal’s legendary referral program inspired another titan of viral you may have heard of – Dropbox.
The online file hosting service similarly used viral value wisely as the foundation of their viral marketing strategy. Only instead of waving around money to kickstart growth, they offered something just as, if not more, valuable.
Here’s a simple breakdown of the viral value they provided:
- Users sign up for Dropbox because they want space to store their files.
- They get MORE value when sharing access to those files with others.
- They get EVEN MORE value by inviting new users.
Just like PayPal, Dropbox offered both a double-sided viral value prop and double-sided incentive. When a user invited a friend who successfully signed up, both received 500MB of free space and they both could benefit from Dropbox’s file storing and sharing services.
It was a win-win-win for all parties involved.
Starting to make sense?
Measuring Viral Value
Viral value is NOT a soft-skill metric. It has very little to do with branding, and a lot more to do with how quickly, easily, and cost-effectively you solve the core problems of your users. Branding is a fun thing to show your mom, but if the changes you make to your branding don’t drive key metrics in a significant way, it’s just more wasted time and resources.
So keep in mind the following when evaluating the true impact of your product’s viral value:
- Focus more on specific metrics than on branding. (This will provide a quantitative, data-backed view of the value you’re ACTUALLY adding.)
- Take steps to increase your viral value in comparison to the user’s perceived cost.
- Mitigate perceived cost by adding elements like social proof (such as tweets from influencers).
- Make sure any share or invite CTAs within your viral loop lead with the benefits users get from completing the action.
Your users hate being “sold,” but they love getting value. Overall ensure they see the viral value FIRST before seeing what they need to do in order to unlock it.
The Million Dollar Questions
Want to achieve financial success and blow up all over the Interwebs? Ask yourself these two questions:
- Are your users CURRENTLY sending out a ton of shares and invites?
- If not, is the viral value prop you have REALLY compelling enough to get customers to share?
Determine the answers to these, and you’ll have a good idea where you need to start towards achieving viral success. If you’re having trouble finding the way, go back to the drawing board and figure out how to either add more ACTUAL value, or at least more PERCEIVED value to your viral CTAs.
I’ve been talking a LOT about your “viral loop,” but haven’t given much of a robust definition or visualization of exactly what this is yet.
That’s about to change.
Want To See How a Viral Loop Can Make You Absurdly Rich?
Most don’t map out their viral loop. Instead they hedge their bets on bells and whistles for their product, and expect users to fall in line. Then they fail. In our next chapter I’ll provide a walkthrough to ensure you never find yourself left out of the loop again.
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