Category: referral

“Progressive On-boarding” is introducing new and unused features to users and one important part of a journey is to incentivize them to become a “sharer” or evangelist of your App/product – most Apps only get this when the user is:

• acquired
• activated/onboarded
• retained

Some readers will recognize this as the first 3 steps of Dave McClures’ AARRR – Pirate Metrics for Startups (I hope we can still appreciate DMC’s contribution in late-2017)

Retention is the most important pre-cursor to “virality” (or Referral, DMC’s last “R”),  an App developer’s natural end goal is to create a product that is so addictive that people use it regularly, find it indispensable, and keep coming back even after drop-offs in initial usage activity. This is the type of app that becomes integrated into a person’s daily routine – like using Instagram, Dropbox, or Spotify.

How does onboarding build retention?

Onboarding is instrumental in getting users to build self-reinforcing behaviors, specifically they:

• introduce and help understand the feature
• get the user to experience the “a-ha” moment for that feature
• track with analytics to have completed a goal or they may get tips/walkthroughs to guide them again.

Some examples of self-reinforcing behaviors are:

• The more data a user invests in a product, the harder it can be to leave it. Who wants to import 100s of documents over from Evernote to a competitor, for example? Users want to feel happy that they made the right decision from the jump.
• The more time that’s invested in using a product, the more reflexive the daily habit to use it becomes
• The two things above create an emotional connection between the user and the product. You’ll see this when users start posting and blogging on social media about how they can’t live without the app – this is how you get free brand ambassadors!

 

So Retention leads to Referral

If your goal is to build a viral loop around the core of your product, then the first step is to think about how you can make it easy for users to find, onboard, activate themselves with your App, and then share it with their friends.

Some steps and considerations to keep in mind:

Timing of sharing

• Keep out of the user’s way until they’ve had a happy experience. With Contextual you can target an audience at the right time of the user’s journey, then show them a tip or popup suggestion.
  • Your UI should hide the share until it’s relevant.
  • Example: Spotify makes it super-easy to share your current song,  because songs make us happy (evokes a positive response).
  • Spotify also passively shares your playlist to your FB timeline. This doesn’t make me happy as a user, but it’s free advertisement for them!
• Make it a simple one-click action to share while the user is experiencing that endorphin rush or “activated” experience.

• • Experiment with highlighting the share button or do some push campaigns to incentivize sharing.
  • Use your analytics to understand where best to test how and when to share. Contextual has some powerful analytics that allow you to look backwards for click events in the last 30 days even if you didn’t realize it was important. (we also support others like Segment).

Make it really easy to share widely

In the example above the awesome HelloFresh have a very subtle sharing button. It obey’s the rules of:

• “keep out of the way”
• “Make it a simple one-click”

But is it motivating users to share enough? What could be more viral than food? Just by sending a picture of the recipe will drive installs and views. That’s building the self-reinforcing behavior, here are just a few use-cases:

“Here’s what we are having tonight!”

“Will I do this for Saturday night with the Smiths?”

“This looks incredible!!! 🙂  “

What would the viral uplift be if HelloFresh simply targeted engaged non-sharers with a simple tip like this. Simple tips can increase the uplift of a “goal” or “success metric” by 20-80% – its certainly worth a try to do targeted, contextual tips!

This is a classic case where targeting users who’ve not shared before can be targeted.
In Contextual, this would look something like this:

 

Some other considerations

• Is your App running on a phone or on a tablet? Is the user “on-the-go” or is it a “lean-back” experience? Minimize the steps to get to sharing for each situation.
• Does each use of your app build upon the previous experience? (Do you have markers or “tags” that track a user’s journey).
• Pre-tick the share list with all contacts or relevant/recommended contacts.
• Enable search on the contacts list so the user can easily share to specific people.
• Provide the option to manually enter additional email addresses.
• Make it possible to share on multiple networks at once.
• Consider the fundamental value proposition you are presenting to your users
  • Are you enabling them to more easily connect with their friends and social networks? Are you saving them time or money? Are you making their day/lives more efficient somehow?
  • Is your value prop unique enough to cut through all the other competing noise?
  • Reward often and variably – this keeps the urge to share going and encourages daily connections since inviting friends becomes a core process in your app. Check out why variable rewards matter from here or just get Nir Eyal’s book – it’s good 
  • Clearly define and promote your value proposition early on in your marketing messaging, and connect these back to the core idea of what your product delivers
• Consider where new users can discover your viral loop and set the process off
  • Do it for free – App Store Optimization, online marketing, website integration, newsfeeds, your website homepage, and blogs are all great “on-ramps”
  • Spend a little – paid advertising, traditional marketing campaigns, SEO
  • Try incentive campaigns to encourage existing users to invite friends. Use push notifications or in-App feeds to get the message out.

The accepted App funnel is:

• Acquisition
• Activation/Retention
• Referral
• Revenue

In this post covers the relationship between onboarding and Referral.

Onboarding generally is seen as the bridge from Acquisition to Activation and Retention. The goal is to get the user oriented in the App and get them to an “ah-ha” experience. In the past the prevailing wisdom was that the onboarding logic must be coded into the application.

However Apps like Canva are growing incredibly fast and one of their secrets is the ability to adapt quickly and run experiments to measure uplift.

…their growth experiments were built by their development team. This process took 4-6 weeks and included several more steps. Each experiment was prioritized into development sprint cycles, coded by front-end and back-end developers, QA’ed by another team, reviewed by a peer, then reviewed by another peer, before being deployed into their product.”

So the hard reality is that companies experiencing fabulous growth radically use onboarding and experimentation tools to get the uplift. One of the key goals Canva tries to achieve is the “sharing your first design”. This is a viral (or Referral) moment in a user’s journey.

Referral and Viral Loops

You may associate viral loops with social games, where the whole concept of playability is hinged around the concept of invites and cooperation. However, you don’t have to go to that extreme to benefit from an understanding and implementation of viral loops.

A viral loop is a self-fuelling cycle of users generating more users – it looks like this:

First, your App is shared. People in the sharer”s network see this, click through and engage with the App. Through a series of optimised steps, these people go on to invite the next set of new users.

Apps such as Facebook, Instagram and WhatsApp have all relied on viral loops to accelerate their dominance. However, this simple concept just evolves from the basic idea of personal recommendations.

Your best customer acquisition is one that is recommended by a friend. Think about it, if a friend recommends a cafe or a website, you usually check it out. According to a study by Nielson, 90% of people surveyed places at least some degree of trust in a recommendation from people they know. This is much higher than the trust placed in information seen in traditional and online advertising.

But with the ease of sharing these days, people are not only recommending things that they are absolutely addicted to. They just recommend something that is interesting or helpful and then they move on. So the trick is to have your App “Referred” (recommended or shared) before a user churns off.

Placed Tips and Tours

This checklist helps optimize your onboarding flow to get a user to this event:

1. What task is meaningful in Activation for a user?
2. Does your App design facilitate the user’s completion of that task?
3. Can you segment these users in real-time. For example, platforms like Contextual know how the user is interacting”InApp”.
4. Try a Placed Tip or guide to get the user to complete the task.
5. Try some “off-boarding” that supports sharing:
   • Did the user completed the task?
   • Have they shared yet?
   • If not, use a Placed Tip or even a CTA modal to encourage Referral.

Building in sharing or referral as part of the user’s onboarding process will get you growth – if your user has completed a task (a “Job To Be Done”) then

 

 

Think of a viral loop as bonus return on investment for all your acquisition techniques.

Why Referral Drives Hockeystick Growth

 Once every couple of new users, one successfully passes through the viral loop and invites someone that brings them on board.

That user is like a bonus that you did not have to spend any money to acquire…

That user is like a bonus that you did not have to spend any money to acquire, allowing you to stretch your acquisition costs over more customers. Thus your CPA drops. You don”t need a completely viral product to benefit from viral loops.

Let”s highlight the benefit more by looking at a numerical example. Say that one in every 5 new users successfully recommends the App to a friend.

•  We start with an advertising campaign that brings in 400 users
• These users will bring on another 80 users due to recommendations, based on the 1 in 5 rate
• The 80 will then each bring on 16 users
• And so on…
•  Eventually, this will equal a total of 500 users that signed up because of this campaign, 100 more than those that were brought on directly.

This 25% bonus to your customer acquisition is a great reason why viral loops are worth setting up right.

At the same time, since this is compounding, an increase in virality (not virility or vitality!) makes a huge difference in the final outcome. If instead of 1 in 5 users successfully recommending to a friend, it was 1 in 2, the eventual outcome of the campaign that brought in 400 initial users would be an increase in 800 users instead of 500 users.

Onboarding = Referral

Investment in an agile approach to onboarding will pay dividends as the tools can be shared from the Product Managers out to the Growth or Marketing teams. I’m not saying it should be open-slather on people running experiments but it can allow rapid iteration around getting users to drive your viral engine of growth.