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Viral Coefficient measures the rate existing customers refer new customers to a product or service.
This metric assesses the virality of a product by measuring how many new users, on average, an existing user converts. It gives insight into the potential for exponential organic growth to expand a customer base. The metric is useful during growth-focused campaigns to evaluate the compounding effect of referral-based user acquisition.
Average # Invites Sent by Each User x Conversion Rate of Each Invite
To calculate Viral Coefficient, multiply the average number of invites sent by each user by the conversion rate of each invite.
Encourage sharing and implement features or incentives that encourage users to invite others. Ultimately, focusing on building a high-quality, valuable product or service is the best way to increase a Viral Coefficient – word-of-mouth is free and very powerful.
A high Viral Coefficient doesn't always equate to high, sustainable growth. Among other factors, it must be complemented by solid unit economics and good customer retention to breed long-term success.
