Viral Coefficient

Viral Coefficient refers to the number of new customers an existing customer refers to your local service business.

How to calculate your Viral Coefficient:

(#) invitations sent per customer X (%) conversion rate = (#) Viral Coefficient

To calculate your Viral Coefficient, you need to know two numbers. The first is the number of invitations sent per customer (referral links, social shares, or whatever best represents an invitation). The second is the average conversion rate of those invitations (how many invitees became paying customers). You then multiply those two together to get your Viral Coefficient.

What we like about Viral Coefficient:

Your Viral Coefficient is a good indicator of your company’s growth trajectory. This metric is a result of the services you provide, so improving virality starts with improving your Customer Fulfillment systems. It also helps you predict how many leads and customers you’ll receive from word-of-mouth, which we all know is one of the most effective marketing channels.

What we DON’T like about Viral Coefficient:

While Viral Coefficient is a marketing metric, your marketing team cannot change it on its own. By nature, virality must be baked into the services you provide to be effective. This means your entire team (marketing, sales, service, support) needs to be on board to improve this metric.

Also, it’s important to consider your Viral Cycle Time. This is the time it takes your existing customers to invite their friends, those friends to become paying customers, and those new customers to invite their friends. The shorter this period, the faster your business will grow.

Marketing metrics similar to Viral Coefficient:

Before you select Viral Coefficient as your One Metric That Matters (OMTM), be sure to check out these related marketing metrics and KPIs for context.

Net Promoter Score (NPS)

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