Virl
Viral Coefficient
aka Virality, K-factor
The number of new users an existing user generates. This metric calculates the exponential referral cycle - sometimes called virality - that accelerates company growth. [1] [2] The K-factor is a calculation that measures your initial customers and the number of invites they send out. The number of those invites that convert, when compared to the number of invites sent out, is an indicator of how popular each wave of invites will be. The higher the conversion rate, the more likely your product will go viral. [3]
A K-Factor/Viral Coefficient of greater than 1 is the target. A viral coefficient of 2 means that every customer you acquire will bring in 2 more customers. A viral coefficient above 1 is advantageous to your customer acquisition costs because as users join through word of mouth and other unpaid channels, the CAC declines. [4] [5] [6] [7] [8]
[1] Retrieved May 21, 2021, from https://neilpatel.com/blog/9-metrics/
[2] Geckoboard. Retrieved May 21, 2021, from https://www.geckoboard.com/best-practice/kpi-examples/viral-coefficient/
[3] 34 Types of Startup Metrics to Measure (with Examples). Retrieved May 21, 2021, from https://startupdevkit.com/types-of-startup-kpis-metrics-to-measure-with-examples/
[4] Retrieved May 21, 2021, from https://bothgunsblazingblog.wordpress.com/2013/10/22/the-k-factor-growth-and-going-viral/
[5] Muzyka, D., Birley, S., and Leleux, B. 2003. Trade-offs in the investment decisons of European venture capitalists. Journal of Business Venturing. https://doi.org/10.1016/0883-9026(95)00126-3
[6] Hall, J., and Hofer, C.W. 2002. Venture capitalists' decision criteria in new venture evaluation. Journal of Business Venturing. https://doi.org/10.1016/0883-9026(93)90009-t
[7] Kakati, M., 2003. Success criteria in high-tech new ventures. Technovation. https://doi.org/10.1016/s0166-4972(02)00014-7
[8] Petty, J.S., and Gruber, M. 2009. “In pursuit of the real deal”. Journal of Business Venturing. https://doi.org/10.1016/j.jbusvent.2009.07.002
[9] Retrieved May 21, 2021, from https://clevertap.com/blog/viral-coefficient/