Archives for December 2017

December 15, 2017 - No Comments!

Why word of mouth, not paid ads, is the future of marketing

The first question that emerges when discussing any possible solution to a problem is ‘why?’

Why virality and word of mouth?

I would say because it’s a marketing channel based entirely on your product and it doesn’t rely specifically on any other channel.

Then I would provide extra support to my argument by saying that word of mouth is the primary factor behind 20% to 50% of all purchasing decisions and also it’s 10x more effective than traditional advertising, as people are really sick and tired of being pushed to buy things.

Paid advertising is almost dead.

Relying on ‘rented’ space to acquire loyal customers, is a risky practice.

Plus, by increasing virality,  you decrease your CPA as more people get to use your product by keeping your marketing budget at the same level.

I bet that you hear a lot about the power of word of mouth. But what is it really?

Word of what?

Word of mouth is a phenomenon where people love something so much, they just cannot stop boasting about it, until everyone gets to try it. And if anybody has something bad to say about it, then these passionate fans are able to go full berserk in order to protect it.

Why word of mouth, not paid ads, is the future of marketing

It sounds stupid, but it happens.

Let’s see 4 simple things- at least in theory, you can do to generate word of mouth for your product:

  1. Have a great product, meaning that your product should solve a problem even for a small niche and actually work the way it’s supposed to.
  2. Keep your customer support in high priority. Humans love being treated well!
  3. Build communities! The big bang of the internet happened not because of products but because it offered the ability to people to finally belong somewhere. Building a community is vital, and if you ask me, it’s better to start building one for your niche even before having a product to sell.
  4. Love your customers. Help them in any way that you are able to! If you have a saas product, you can write a case study about them, or just support them by buying something they sell.

Actually, about customer support, I have a funny story.

During a marathon troubleshooting session, a  support engineer of Rackspace heard the customer was hungry, so she ordered them a pizza! How can the customer resist to not talk about this?

Another funny case is Shazam. Its users didn’t even have to talk about it!

When scanning for a song using the app, they would hold their phone near to a speaker. That, of course, raised the obvious question around them:

‘Dude what are you doing?’

The power to create curiosity is more powerful than words as curiosity is integrated into our DNA.

Virality Vs. Word of mouth

So, what’s the difference between virality and word of mouth?

Virality is a phenomenon where people spread the word about an offering, in the context of using it, rather than loving it, which is what happens with word of mouth.

In other words, virality has always to do with some sort of reward. Love, on the other hand, is unconditional.

Why word of mouth, not paid ads, is the future of marketing

I have 2 examples for you:

Kickstarter leverages user campaign for virality, as when a campaign creator spreads the word about his project, he helps Kickstarter reach higher user adoption.

The same mindset applies to product hunt. When a hunter submits a  product, both the hunter and maker spread the word about it,  bringing in more people in the platform.

Now, we know that both virality and network effects lead to growth but they are not the same by any means.

Eventbrite, for example, uses virality but not network effect, as in order for the organizer to get more registrants for their event, they have to spread the word in other platforms and external networks.

On the other hand, a platform like LinkedIn is designed to use network effects as you have to be a LinkedIn member in order to connect with other people through it.

As you can understand, virality is a business design problem and not just a marketing strategy. You have to make it part of your business model in order for it to work.

Now, there are 2 types of virality which I will explain and I’ll also give you some examples to get inspired by how you can get them to work for you.

First, we have Pull Product Virality (PPV), product virality where existing users require people in their network to join to gain value out of a feature.

You can see that type of virality on an app like Splitwise where you need friends on the product to input money owing and money lent. Or, with Whatsapp where you should have your friends and family in to communicate.

Snapchat also works the same way because need friends in Snapchat to see snaps and be seen.

Then, we have Distribution Product Virality (DPV), product virality where existing users spread awareness of a product to their network.

Instagram’s cross-posting was a game changer for them; You can share your photos on Facebook and Twitter and even non-users will get in.

The same thing happened in Facebook’s early days.

If a tagged friend wasn’t on Facebook, she would receive an email prompting her to create an account.

Why word of mouth, not paid ads, is the future of marketing

How to measure Virality

The way that someone can measure virality is through the calculation of viral coefficient or the k-factor.

The k-factor is the total number of registrations per unique inviting user.

So, if 1 in 5 of your users will successfully recruit a new user in their first month, your viral factor is 1/5 = 0.2, and our initial 5,000 users will recruit another 5,000 * 0.2 = 1,000 users in month #1.

I will get you out of the trouble to look for industry benchmarks on that by saying that for a consumer internet product, a sustainable viral factor of 0.15 to 0.25 is good, 0.4 is great,  and around 0.7 is outstanding.

But here’s the problem:

When our viral factor is less than 1, we acquire users at a decreasing rate until we grow no more.

That isn't an outcome that anybody wants, so is there something we’re missing?

Yes! We are missing all of the other channels with which you can acquire users like the Press, direct traffic, inbound marketing, paid advertising, SEM, SEO etc.

You see it’s truly rare to attain a viral factor of more than 1.

As I told you, you can measure virality by using the k-factor, but this is just an indicator of how your referral marketing works.

In order to see how virality affects your overall growth, you have to take into consideration your amplification factor.

Why word of mouth, not paid ads, is the future of marketing

The number of users acquired through non-viral channels by our amplification factor will reveal the real growth of your user base.

You can calculate the amplification factor by dividing 1 by the result of subtracting of your viral factor from 1.

In case I messed you up, you can see the equation in the image above.

Apart from your main marketing funnel, you can have multiple sub funnel, and your viral loop is no exception.

You should treat your viral loop as a funnel with several stages that can be optimized, so as to maximize your viral factor.

Here’s a basic anatomy of a viral funnel:

  1. The top of the funnel is the step where the user becomes aware that she can invite someone.
  2. Then the second step is where the users submit the invite form.
  3. The third step includes them sending the actual invitation.
  4. Then the fourth step is where the invitee gets the invitation
  5. The fifth and last step is when the invitee accepts the invitation and registers.

Why word of mouth, not paid ads, is the future of marketing

 

TL;DR

  • Paid advertising is rented space.
  • Word of mouth is the primary factor behind 20% to 50% of all purchasing decisions.
  • Virality and Word of mouth are not the same thing.
  • In order to see how virality affects your overall growth, you have to take into consideration your amplification factor.

I think this article gave you enough arguments, as for why Virality & Word of mouth wins over paid advertising. I'm curious to hear your arguments about the subject, so hit me us up in the comment section

Note: Puggy recently started spreading her knowledge on Referral Marketing, so 👉 Push the "Send to Messenger" button below to grab her exclusive content 🐶

December 8, 2017 - No Comments!

6 Ways To Grab More Participants For Your Referral Campaign

Whether you want to increase your sales or push your brand’s awareness on a new high, a referral campaign is always a wise choice in order to broaden the top of your marketing channel.

So, let’s say you build your referral campaign; now what?

People flood your page and you get millions of participants. Yeah, right.

In almost all occasions, it doesn’t work like that.

There are thousands of referral campaigns that might interest you, but you’ve never heard of them.

So, how do you make sure that your referral campaign lands on as many eyeballs as possible;

And how do you make sure that you’ll turn the simple visitor to a participant?

I got your back fam. 💪

Here are 6 ways to grab more participants for your referral campaign.

1.Give your existing customers an extra push

The best way to ensure that your campaign will get the number of participants it deserves is if people are sharing it.

Your customer base is far more likely to become your early ambassadors, so why not give them a boosted incentive to do so? If they truly enjoy your product/ service, they are more likely to recommend it to their friends.

In case you’re running a milestone referral campaign, you can instantly reward them for getting in your program by giving them a headstart in comparison with non-customers.

2.Make it really easy to share

Less is more, they say.

Obviously, if you’re about to spam users with a bunch of nonsense before they are allowed to share your campaign, most probably they won’t.

2 steps are enough:

  1. Sign up step
  2. Sharing step

You can allow users to signup by email or social media account, but in the sharing step, you must be really cautious.

People actually like to have a limited amount of choices; that way they don’t have to think.

So, apart from a clean an understandable UX design, try to keep the sharing options to the minimum.

Email is a to-go choice and you should also add 1 or 2 choices for social media; mostly the ones where your game is stronger. That way you ensure that people will share your campaign in places where you can support your level of awesomeness.

Pro tip:

Dropbox used the best invitation hack I’ve ever witnessed.They offered the option to sync your contacts from Gmail, AOL, Yahoo!, etc.

BOOM!

3.A 2-side reward always wins

If you are running a referral campaign for an eCommerce, a great tactic to follow is to offer 2-sided rewards- that way both the referrer and the referred have something to gain.

This is exactly what Airbnb did by offering $25 discount for accommodation booking to both sides. This referral program became known as the ‘altruistic referral’.

Actually, Airbnb tested 2 variations for their referral campaign:

  1. Variation A was based on single-side reward offering 50$ to the referrer.
  2. Variation B offered 25$ to both the referrer and the referral.

The results of their experiment showed that Variation B brought 25% more referrals than Variation A.

4.Put it everywhere.

This is pretty obvious, right? You should demonstrate your amazing referral campaign on any of your digital properties.

You can start by putting banners on your website and blog. If you’re running an app, send your users a notification. In case you have the budget, you can also run a sponsored post on Facebook.

Note, that in Facebook ads, it’s better to go with videos.

Try to capture in a few beautiful seconds all things that your referral campaign has to offer- and please, show your face; it’s important!

In case your wallet doesn’t allow you to spend on ads, you should probably prepare your Facebook audience for your campaign.

A great way to do so is by gathering messenger subscribers using a bot from a service as Manychat.

Recently, I created a bot for my new venture, Growth Hacking University that subscribed people on our pages messenger when they commented on a certain post by using a given keyword.

I've also made a video explaining how I did it:

5.Up your follow-up game

When I started working as a marketing consultant, I was doing nearly anything for our newly founded company.

I was writing articles to attract leads, I was a sales guy and a consultant.

Sales were always hard for me because I felt like I was pushing people to finally buy. I hated follow-ups. The sad truth is that following up is the only way to close a sale.

The same mindset applies to your referrals.

The only way to make people refer to their friends and colleagues is to communicate to them a sense of urgency to them. No one wants inactive users.

Just email them to show them how close they are to achieve a goal, or consult them on how to get closer if they need to.

6.Sneaky remarketing

This is another brilliant way to follow up, without spamming their inbox. You can set a retargeting pixel on the page after the user signs up.

After that, you can create some beautiful ads to run only to users that are not so active.

A good tactic is to incentivize them by giving them a boost like the one that I described in the first section of this article.

TL;DR

Just by launching a referral campaign for your business doesn’t ensure that people will fight each other to get on-board. The good news is that there are 6 things you can do, to get the maximum number of participants possible:

  1. ‘Boost’ your existing customers.
  2. Make it easy to share.
  3. Use 2-side rewards.
  4. Announce your campaign on all your digital assets.
  5. Follow up inactive referrers.
  6. Retarget users to incentivize them to refer more friends.

Now it’s your turn to rock.

Cheers 😎

Note: Puggy recently started spreading her knowledge on Referral Marketing, so 👉 Push the "Send to Messenger" button below to grab her exclusive content 🐶

 

December 1, 2017 - No Comments!

How Airbnb Built a Billion $ Growth Formula

Remember when people first started using “google” as a verb?

It’s every startup’s dream—beyond making lots and lots of money, of course.

It’s the arrival. The moment when there’s a universal acceptance that your company as the go-to provider of a product or service…so much so, that people now use your brand as generic noun or verb.

Pass the Kleenex. Xerox a copy. Relax in the jacuzzi. Enjoy fish and chips with a coke.

And now...paying to stay overnight in a neighborhood flat or borrowing a local family’s rollaway bed while you travel...you’re airbnbing.  

So how did this scrappy, born-out-of-necessity, startup make their claim to fame?

For starters, they had a great idea. But everybody’s got an idea, right? What brought Airbnb to billion-dollar status was how they grew that idea, that is, how they increased their number of guest arrivals from 21,000 in 2009 to 80,000,000 in 2016. 😲

It was its well-timed and well-implemented referral marketing programme.

Let’s talk about how they did it.

How Airbnb Built a Billion $ Growth Formula

Let your customers do the convincing

So you’ve got a new product, but the world is not knocking down your door to download your app or use your service?

Well, you’re not alone.

Not everyone wants to be an early adopter, and that was certainly the case for Airbnb.

What’s more, when Airbnb launched their service model, they were met with concerns—travels and hosts alike worried if they could trust a stranger.

Jumping that hurdle began with this fundamental insight: a whopping 92 percent of people say that they find recommendations from a peer more compelling than advertising.

We know how powerful word-of-mouth advertising is when used to sell any product or service. But for the services Airbnb offers, the power of a word-of-mouth was be even more critical for accelerating growth.

By building a refer-a-friend-like program that gave experienced customers the mic—along with background checks and a hefty insurance policy—Airbnb could reduce (if not eliminate) those fears, making travelers and their hosts more travel-ready.

Current customers became the trusted brand advocates new customers really want and need to hear from.

As Jason Bosinoff, Airbnb engineering manager, said in an article for Medium, “Airbnb experiences are so personal. People use Airbnb to unlock incredible experiences — anything from weekend getaways with friends, cultural exchanges, and once-in-a-lifetime events like honeymoons.”

And the referral approach is just that...personal.

Go big…and go home

When starting a referral program, everyone has the same question: What will entice people to sign on, sign up and most importantly, to refer others to do the same?

For Airbnb, the answer was simple.

Experiences. 🗽 🌉 🗼

They wanted to build a database of world travelers, ready to rent apartments, rooms, and homes the around the globe.

So the home-sharing company incentivized would-be travelers offering travel credits—$25 when a referred friend rented from Airbnb and $75 when a referred friend listed his or her property for rent on the site.

What’s particularly advantageous about this referral tactic is that Airbnb can detract swag hunters simply looking to collect loot or swag and instead, increase referrals of people who would actually travel. ✈🚆 🚁 🚍 

How Airbnb Built a Billion $ Growth Formula

Travellers who participate in the program can earn up to $5000 worth of lodging fees they can use to try out the service. 💰 🤑 💰

That’s certainly enough to pay for lots of mini-break weekends. 🚗 🏘

It’s up to the traveler to decide whether to spend these credits as they are earned, or save them up and use all at once.

Sounds really awesome to a traveler, doesn’t it?

For Airbnb, however, the approach was a little risky.

Here’s why...

To offer these travel incentives, Airbnb had to open up their wallet and pay some cold-hard-cash. When a traveler got a credit for accommodations, Airbnb still had to pay the host.

With this double-sided reward model, Airbnb was (and still is) putting their money where their mouth is betting that once customers try their service, they’ll return. Otherwise, Airbnb is just tossing money out the window.

If you’re confident in your product or service model — as Airbnb was — taking this sort risk just might be worth it, as the reward can be so sweet.

Know your bullseye and keep score

Before you launch a referral program, you need to set a realistic goal and identify metrics that you’ll use to measure success or failure.

How Airbnb Built a Billion $ Growth Formula

Airbnb made sure they were aiming at a reasonable target by first running a closed beta test of its referral program.

To start, Airbnb offers the travel credit incentives for referral only to their existing 2,161 existing members.

The result? 2,107 new members joined, this nearly 1:1 growth ratio was a clear indication that this program would be a likely success.

From there, Airbnb identified six specific metrics to track, including:

  • Number of monthly active users sending invites
  • Number of invites per inviter
  • Conversion rate to new user
  • Conversion rate to new guest
  • Conversion rate to new host
  • Revenue impact potential

They looked at their growth in these areas historically (before the referral program) to see what they could reasonably expect from this program.

The results determined that the Airbnb team could expect their numbers in these categories to increase anywhere from 20 to 90 times their current standings.

This range provided a way to decide if the live referral programme was successful in their attempts at bolstering their business through referral.

To see how their actual performance measured against their projection, Airbnb tracked growth every step, A/B testing new content and landing pages and using customised dashboards to make the information accessible.

And Airbnbers surely delighted in watching the numbers climb, as we know now exactly how successful this effort proved to be.

Ultimately, what Airbnb is trying to do is build a community of travel-loving followers. And their referral program is only one of the ways they are making “airbnbing” a choice preferable to booking some boring old hotel room.

December 1, 2017 - No Comments!

What are the best growth hacks for B2B startups?

Some challenges you may find when you start your business, how to make search engine optimization work for you, how to generate leads, how to develop your brand awareness in a way that will increase awareness and many more challenges.

I put together a list for you, after a lot of experiments and obstacles we ‘ve been through with Viral Loops.

So, here we go:

1. Add your content into newsletters from other editors/companies/influencers

What are the best growth hacks for B2B startups?

A great way to promote your business is via existing newsletters. When you publish a new post, find some editors of newsletters that fit your industry in order to promote your business.

Another way to do this is by getting in touch with companies that have already a user base of emails that matches your industry. (Be away from competitors)

2. You can run a referral program in which the attribution happens when the invitee becomes a paid customer

For Viral Loops - yes, it’s a viral and referral marketing platform - we have 2 referral marketing templates for this.

The Referral Program, inspired by dropbox in which you can reward people when their friends sign up.

What are the best growth hacks for B2B startups?

The other one is the Milestone Referral Program inspired by Harry’s and The Hustle, which is based on the concept of milestones.

What are the best growth hacks for B2B startups?

When you reach a specific milestone, say got 4 or 10 friends, you get something. If you don’t catch that, you don’t get anything.

3. Retargeting

Some of your page/blog visitors, will leave without understanding your product. You should bring them back by using google ads, facebook ads etc.

If you know your post that will make a lot of traffic, your custom ads propably will convert better.

Create a post about a topic you want for your campaign and then, retarget its visitors.

4. Launch some free tools/features from your product in order to get leads from the traffic

What are the best growth hacks for B2B startups?

Search your product for any feature that is probably easy to promote.

Try to find a feature that can stand by itself.

Go for it and promote it!

After some days, you will see that a lot of visitors will continue to explore your main product.

This is a good tactic to reactivate users who have forgotten you. Just send a product update email and you’ll see them come back.

5. User Experience

Your product should be easy on technical and non-technical people to handle.

A good user experience will make people use your product, be happy with your product and finally share your product.

If the users talk/chat about your product in their everyday life, there is a big change that they will convert others into paid customers.

6. Free Trials

What are the best growth hacks for B2B startups?

This tactic is a must-do in B2B businesses because these products are often expensive.

With a free trial, you are showing the user the value she will receive from using it.

It makes it easier to sell your product after a free trial period because it makes you look more trustworthy.

Which of these tips would work best for you? Try them and find it out!

In the end of the day, probably a lot of the tips I gave you will help your business make its existing trial users into paid customers.

Hope it helps! 🙌