Viral Coefficient

Measure Viral Growth and Customer Referrals With The Viral Coefficient KPI

A measure of how quickly and how widely a marketing message spreads online. In terms of a marketing campaign to acquire new customers, the Viral Coefficient can be calculated by multiplying the current customer base by the average number of invitations sent by each existing customer, by the conversion rate of invitations sent/new customers, divided by the current customer base. A Viral Coefficient above 1 means you're achieving exponential growth.

The formula for the viral coefficient is as follows:

Viral Coefficient (K) = Invitations × Conversion Rate

Example: 10 current customers invite 2 friends and 50% convert = (10*2*.5)/ 10 = 1).

Example: You have 180 current customers and receive 110 referrals of which you close 95 new accounts (95/180 = .52). In other words, for every two current customers, one new customer is being successfully referred to your company.

Monitoring SaaS KPIs on a Dashboard

Once you have established benchmarks and targets for measuring Viral Coefficient, you’ll want to establish processes for monitoring this and other SaaS KPIs. Dashboards can be critical in this regard.

Learn more about how to track your Viral Coefficient on a SaaS Dashboard.