Notes on customer acquisition and viral marketing from First Round Capital CEO Summit
I was recently invited to lead a session on customer acquisition and viral marketing at the First Round Capital CEO Summit (thanks Josh!). I wanted to share the notes I prepared for the discussion below – hopefully most of them will be self-explanatory.
I’m on blogging break right now, but I may expand the below notes into a series of posts when I have more time. Brb!
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How to get have sustained viral growth:
– Have a great product (ideally in communication or social content)
– Convert user growth ideas into Excel-based hypotheses and clear user funnels
– Build and track each step of your funnels
– Get an initial stream of traffic (Adwords is OK)
– Optimize until every user is bringing in a new user
Timeline: weeks to months
Getting scientific about user acquisition:
– Start with your laundry list of acquisition ideas
– SEO, tell a friend, Twitter, etc.
– Convert into 2-3 testable hypotheses
– “Buy users for $1, monetize at $5”
– “20% of registered users will import addressbooks, >5 of their friends will register”
Viral loops in SaaS/enterprise
– What things do people share? What tools do they use for communication?
– files, wikis, Outlook, Excel, USB keys, etc.
– These are your viral channels (vs Newsfeed/Notifications on Facebook)
– If your value prop can align with a channel, then you might make it viral
– Case studies: Yousendit, Dropbox, Wikis, Basecamp, etc.
How quick-hit viral loops work for consumer products
– Cialdini’s “Influence: The Psychology of Persuasion”
– Quizzes: Social norms
– Top friends, eCards: Reciprocation
– 8 invites left: Scarcity
– But what’s the followup?
– Hide quoted text –
Value propositions for viral loops
– Best value prop is like Skype
– great for both parties (inviter and invitee)
– build deeply into the product (takes 2 to tango)
– Worst value prop is like lots of FB apps
– little to no value for the inviter/invitee
– lots of churn, feels spammy
– Sustainable viral growth is key for long-term value creation
Different acquisition models work for different kinds of businesses
– Vertical social networks -> SEO/SEM
– SaaS/enterprise -> SEO/SEM
– Consumer/communication/social content -> viral
– Themes, decorations for blogs/profiles -> widgets
Optimize your funnels by brainstorming levers
– Lets say you have funnel of Signup -> Download -> Install -> Fill out profile
– Lots of ways to improve
– change the order of steps
– remove steps
– combine steps
– use lightboxes, or longer pages, or progress bars, or lots of other UI tricks
– To optimize just the download-to-install step, you have dozens of options
– headline
– button placement
– “hero” photo or video
– target their OS
– size of download
– AIR
– small installer vs all-at-once
– installer filename
– etc.
Books and more resources
– Adam Penenberg, “Viral Loop”
– Robert Cialdini, “Influence, The Psychology of Persuasion”
– Tim Ash, “Landing Page Optimization”
– David King and Siqi Chen, “Metrics for Social Games” (Slideshare)
(lots of other resources on Slideshare)
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