Let’s jump right in with the benefit of achieving a K-factor for your business: Free high quality traffic and users. No business would say no to that!
The overall concept of K-factor is to enable you to predict growth of your business through the impact of virality. Once we’ve modelled K, it can then help you to set KPIs and go hunting with more precision and more efficiency. In essence, you encourage your users to promote your activity through word-of-mouth, based on enhanced knowledge of what’s likely to go viral.
The K-factor edge
In a world of increasingly intense competition in the traditional digital marketing platforms, it has become expensive to be heard, to the point of almost impossible.
Frankly, the algorithmic-based marketing platforms, i.e. Facebook, Google and Twitter, are pitting company against company in a bid to increase their revenue at the expense of everyone else’s profit.
For examples of this, all you need to do is look at your historical ad spend over the years on Facebook and Google, as well as how much time and cash is being deployed to your SEO activity.
I’m positive that the cost is not declining and I’m sure that the impact is not as great as before.
To get ahead, you need to start looking at ways of leveraging your existing user base to share and promote your business to their friends and family.
Only your customers can get you free high quality users.
Modelling using the K-factor
K-factor has its roots in epidemiology: it’s used to track the rate of growth of an epidemic or a virus in a populace.
K-factor has its roots in epidemiology: it’s used to track the rate of growth of an epidemic or a virus in a populace
The formula below helps you model the impact of virality provided you have the number of invites to start with.
k=ixcwherei=numberofInvites,and c = Invites to users conversion rate
A formula that is more useful for established businesses is one that uses an approach which factors in only your happy or qualified users. For example those who create an account, place a bet or use a code. What you define as a positive experience is specific to whatever industry you’re in: you need to decide what metrics you use to define a happy user.
k = (# of positive experiences * share rate) * product conversion rate
You can quickly work out what focusing on viral growth through your user base would look like by creating a spreadsheet of your traffic/conversions and applying the formula above to it. From here you adjust rates of shares to understand at what point the model becomes self-fulfilling.
What I mean by self-fulfilling is that the cumulative incremental impact of the viral growth at some point starts to increase your traffic and conversions without need to drive traffic.
Adjusting and tweaking the model is how you set your KPIs for growth.
Don’t even try to hit your numbers until you’ve read this…
If we could package getting viral growth into a solution you wouldn’t be reading this article – you’d be on a site buying the service that makes it happen. Unfortunately for us marketers, obtaining the growth that you have worked out using K-factor is a process of agile marketing woven through a strong product.
This being the case, you can imagine that if your product isn’t delivering a valuable experience compared to your competitor then you will be unable to motivate a user to share your cause.
If they didn’t enjoy the experience they aren’t going to subject their friends to that experience…to try to trigger viral growth in this environment is an exercise in futility – it will fail.
Where to start
Trigger is the operative word. Frankly, what I’m going to ask you to do next is tedious work but 100% necessary. It’s important that you build this as part of your operating processes and that you get your entire team on board.
You’ll need to audit every stage of your product where your user engages and identify where they are likely to have a good experience – that’s your trigger point! You may find more than one, so sift through the entire product experience.
Pick three types of triggers, for example emotional, altruistic or transactional. What I mean here is for an emotional trigger, ask the user for help or to tell people how much they love your product. For altruistic, share to benefit another. And for transactional, offer something to the sharing party, the receiver or both.
Run A/B tests across different triggers and each trigger point.
Rinse and repeat until you hit your targets.
Super important point
No point in sugar-coating it: expect a 90% fail rate on most experiments. As I mentioned before, marketing is a process not a solution. Do not expect this to work first time.
Achieving the goals you set when plotting your K-factor is only going to happen by iterating repeatedly over failure until you find the right trigger.
Your trigger will be entirely specific to your business: competitors will be unable to copy you with the same effect. You will have built a long term competitive advantage. In which case, K stands for kick-ass success. And that has to be worth investing in.
K-factor made simple
Stage one: planning and KPIs
- Model the effect and establish when the ‘tipping’ will occur
- Set share rate KPI using this model
Stage two: execution and iteration
- Identify and create trigger points
- Decide on triggers
- Run experiment
- Iterate > experiment > iterate