In growth hacking, businesses look for simple but effective ways to achieve massive growth. This can be accomplished by embedding virality into your product or simply nurturing the relationships with customers you already have.
How to Engineer Virality
Everyone wants their product or content to go viral. They want to benefit from the exposure of having millions of people sharing and liking their content. Very few people or businesses have products that are able to grab the attention of millions of people and provoke them to share it.
But most people don’t know this secret about virality: It’s all engineered!
Yep, I said it. Virality is engineered. Any product or content can go viral with the right ingredients. The best approach to make your product go viral is to either provoke an emotion or create a desire to share it.
Example: Dropbox became a viral sensation with their referral system. To attract new users, Dropbox asked that after every user signs up, they refer a friend. Dropbox offered an incentive: for every person referred by a user, both the user and person referred will gain an extra 500MB of storage! This tactic is credited to a 60% increase in signups.
Dropbox also used the power of social media to growth hack their business. They offer 125MB of free storage if a user connects their Facebook and Twitter page or follows them on Twitter.
How to Profit from Customer Loyalty
A lot of businesses spend a lot of time trying to find ways to gain new customers instead of building relationships with the customers that they already have. Don’t get me wrong, gaining new customers is really important but these new customers are not going to become loyal fans of your business if you don’t take the time to nurture your relationships with them and ask them what they want from you. There is little ROI from attracting users without benefiting from their loyalty.
There’s a saying that 80% of the profit that you earn will be from 20% of your customer base. You need to figure out how to make that 20% trust, stay loyal, and love spending money on your business.
Bain & Company explains the effect of customer loyalty, “In financial services, for example, a 5% increase in customer retention produces more than a 25% increase in profit. Why? Return customers tend to buy more from a company over time. As they do, your operating costs to serve them decline. What’s more, return customers refer others to your company. And they’ll often pay a premium to continue to do business with you rather than switch to a competitor with whom they’re neither familiar nor comfortable”
One of the best ways to retain customers is to provide awesome service. Be so good that they can’t forget you!
Example: Ryan Holiday, the author of Growth Hacker Marketing, tells a story of how he became a loyal customer of Uber in his book. When he was traveling internationally as a guest speaker for a conference, he was given a $50 gift card. When he couldn’t find a cab, he used Uber to get a ride. He had a great time! He complimented the service and admired how convenient it was. After his ride, Uber asked him to rate his drive and gave him a coupon.
When he was stranded in Brooklyn he asked for another Uber. He is now an active member. He acknowledges that it’s easier to get more money from an existing customer than a new one.