Step-by-Step Instructions

Click to open worksheet.

Problems it Solves

• What if your K Factor (Viral Coefficient) is too low?

If your K factor is too low or not enough people are referring others to your solution, what do you do about it?

• How do you improve your solution?

Just like improving the LTV, the best way to improve your K Factor is to improve your solution. In this chapter, you'll learning how to do just that.

The absolute best way to improve your Viral Coefficient is by solving your customers' problems better.

If you solve someone's problem, they will tell others about it.

Many of the principles in the previous chapter, How to Increase Your Customer Lifetime Value, apply here. As you increase your LTV, people will become more likely to refer your product to others.

This is because the today's inter-connected world is optimized for sharing.  One of the strengths of the internet is it's ability to share information worth sharing. The biggest names on the web - Facebook, Twitter, Google, Yelp - are all about sharing the best ideas, products and services with people who want to consume them.

The best and most effective way to leverage that sharing potential is to make your solution worth talking about. We're living in a world where word-of-mouth is on steroids: people are talking and sharing all the time.

Solve the problem well and your solution will be shared.

Tips to Increase your K Factor

Prompts

A prompt is a message that encourages your customers to share your solution with others. There are a few things to keep in mind when developing your prompts:

First, prompts are not intrusive. Your customer is using your product to solve a problem, and in using your product, they are embarking on an emotional journey. If you interrupt their experience by asking for a favor (e.g. sharing your solution), you will create a negative emotional interaction.

Instead, think of how your prompt can accelerate your customer towards solving their problem. More on that shortly.

Second, great prompts are not overbearing. Just as you wouldn't ask someone you were having a conversation with the same favor over and over again, if you are prompting a customer for a share, don't do it repeatedly. Don't be needy. Instead, prompts should be intriguing and just often enough to remind the person that they can help others by sharing, without bombarding them.

What do great prompts look like?

In the steps below, you'll brainstorm a number of potential sharing opportunities for your customers. Once you've finished brainstorming, you'll prioritize the ideas you've come up with based on the estimated positive Emotional Delta they'll create. Ultimately you'll choose the top one or two sharing opportunities and test them to see the impact they have on your K Factor.

Step 1

The fastest way to create a great prompt, is to start with a bad one.

Using your Increasing Viral Coefficient worksheet, write down an example of an intrusive prompt. For your solution, when would a prompt be considered intrusive by your users? When, if you asked them to share your product with others, would doing so interrupt their seeking of a solution to their problem?

In my example, an intrusive prompt might be a pop up message immediately after logging in: "Hey, share your experience with FOCUS!" This would obviously interrupt their work flow - they have logged in so they can validate a component of their business model, not to share FOCUS with others. That means immediately after login is not the right time to inspire them to share.

Now, think about when you could change the timing of the Intrusive prompt so that it could be considered accelerating.  An accelerating prompt is one that actually helps the customer solve their problem faster.

In my case, a much better time to prompt someone to share their experience would be at the end of a chapter. By asking them to share at the end of the chapter, I've not only avoided interrupting their work flow, but I'm accelerating their progress by giving them a prompt to share their success and mark their achievements.

The positive feedback they get from sharing may increase their motivation, accelerating the speed with which they achieve their Victory. Instead of interrupting and annoying them, I'm accelerating and celebrating them - just by changing the timing of my prompt.

Finally, write in the copy (i.e. message) you will use in your prompt. In my case, it might be "How's your FOCUS?"

This is copy designed to inspire people to share whatever their experience may be - to start a conversation with their peers on Facebook or Twitter about what they're experiencing. If they're feeling good, hopefully share their excitement with others. If they're feeling down, perhaps they'll ask their network for help. Either way, sharing their experience will help them achieve their goal faster.

Notice, my copy is not something like:

"Please share FOCUS with your friends."

That's not going to accelerate them solving their problem. Instead, I want to focus on why sharing their experience with my product is going to help them, not me.

Leave the Emotional Delta section for now, you'll fill that in later.

Step 2

Let's talk about what an overbearing prompt might look like - a prompt that is repeated so often it becomes counter-productive.

Note: this is a separate prompt from Step 1. Feel free to explore an entirely different sharing scenario.

In my case, that might be a prompt to share at the top of every single exercise. This would be way too much and probably start to irritate my customers.

What would be an overbearing prompt in your product's workflow? Write that in the first blank for Step 2.

Instead of an overbearing prompt, think of a situation when you could create an intriguing one. An intriguing prompt is one that inspires your customer to consider, "Who could I help by sharing this product?"

In my case, that might happen immediately after their purchase of FOCUS. It may be intriguing to congratulate them on taking the first step toward building their company, and in doing so, offer them an opportunity to help their friends take the next step in their journey.

In this case, I could use copy like as "Congrats on finding your FOCUS!" By congratulating them, I'm giving them a positive experience to share - one hopefully they want to enable their peers to have as well.

Offers

If your prompt is what reminds a customer to share, your offer is the incentive for sharing:

What will they get out of the experience?

Remember, your Offers are not about your product. No one cares about your product. They care about finding a solution to their problem.

Your Offer should also not be focused on bringing you customers. No one wants the additional problem of helping you solve your problem of getting more customers. A happy consequence of your Offer is likely to be more customers, but don't make your Offer focused on more customers.

The focus, as always, should be on helping your customer solve their problem better.

Also, importantly, the Offer should help the referee - the new person who is being told about your product.

If there's nothing in it for the person your customer is referring your product to, you're turning your customers into sleazy salespeople. That doesn't help anyone.

Think back to the days of some of the social media games. You may remember being asked by your friends to "feed my pigs", or "get me weaponry." These requests became very annoying very quickly. That is because there was nothing in it for you.

Make sure you're helping your customer, as well as the person they are referring to you. Everyone should get a benefit from the sharing of your solution.

To brainstorm your potential Offers, below you'll explore a series of opportunities where sharing your product with others may help your customers. You'll brainstorm several Offer Triggers - situations that arise which makes the Offer to share applicable - as well as Offer Copy - the message you will convey encouraging your customers to share their experience.

As you'll see, Offers don't necessarily require that you literally give away free product to your customers. Of course you can, and that can be very effective, but there are lots of potential benefits your customers can receive from sharing your product.

Step 3

For example, you can help your customer by enabling them to celebrate a success they've achieved using your product. Everyone enjoys achieving victories, even if they're small.

How can you help your customer celebrate their success, and in doing so, enable them to share your product with others?

In my example, if someone completes one of the FOCUS workbooks, they have cause to celebrate! I can capitalize on this by offering them a way to celebrate, such as sharing their accomplishment on Facebook.

By creating an opportunity for them to celebrate (note: this is about them, not about me), I can help them on their emotional journey. Celebrating their success publicly will earn them likes and positive encouragement to keep going from their friends and family. In this case, sharing is a win for everyone involved.

Go ahead and leave the circle in the top right corner of this step blank for now. You'll use that later to prioritize your ideas, and pick one that you want to implement.

Step 4

Encouraging your customers to ask their friends for help is another great way to offer an opportunity for sharing that will also benefit your customer.

For example, in my case, during the Solution Ideation exercise, my customers will benefit from asking friends for help with the brainstorming exercise. This will not only benefit them, but will also encourage them to share FOCUS with others.

How can your product encourage your customers to ask their peers for help? What copy would be most effective in doing so?

Step 5

Most of us enjoy demonstrating our expertise. It makes us feel valuable and helpful, and can support connections with others.

If your customers have developed expertise using your product, you might offer them a chance to share that expertise with their friends. Again, everyone - your customer, their network, and you - can benefit if they share a skill or knowledge they've developed.

In my example, I might use this after someone completes a Currency Testing experiment. Running a currency experiment offers a wealth of knowledge in terms of pricing and human behavior. Once someone completes a Currency Test, my Offer might look like:

"What did you learn? Share it with your community!"

It feels good to share something you know especially when it could help others around you. When can you encourage your customers to share what they've learned?

Step 6

Another way to create an intriguing Offer is to focus on something that improves interactions with others. A lot of virality comes from having a better interaction with someone else.

This is why social networks are viral when they are successful: people want to share photos more easily, they want to communicate more effectively, they want to talk to each other for less money, etc.

What is a way that you could create a better interaction between your customers and their network?

In my case, I might take advantage of this during the Declaring Victory exercise by saying: "What are your co-founders' victories? Ask them." This is an opportunity to start a real interaction among team members because the exercise will unite the team behind a common goal.

Again, this is an Offer to share where all parties benefit.

Step 7

If there is a way that you can get your customers to help each other, it will get people talking.

A great example of this are the Uber and Lyft promo codes where if you refer a friend, you'll both get free rides.

In my case, an example of this is built into the Failure Protocol. One way that founders can help each other process through a failed experiment is by sharing their difficult experiences with each other.

This benefits the founder, it benefits their friends - who can be supportive, learn from their experiences, etc. - and it also gets people talking. In this case, an interaction that is intrinsically helpful to my customers may also have a byproduct of more people talking about my product.

How can you can enable your customers to help one another?

Step 8

One other situation that presents an opportunity for sharing is when accountability can help your customer solve their problems.

Accountability can be extremely helpful when your product is helping your customer make a behavioral change - in particular when they are being held accountable by a person they respect.

In my example, after the Utility Test Design exercise, I may invite my customer to ask a fellow founder to review their experiment and give them feedback. Again, this is another way to encourage conversations between those who are currently your customers, and those who are not yet your customers.

Are there any opportunities when your customer could benefit from being held accountable?

Referral Bonuses

You may have noticed that in my examples, I haven't given anyone anything in exchange for referring.

I did that to emphasize that it is possible to encourage sharing and referrals without actually giving anything away.

That said, giving something away works really well. Here are a few things to think about when you go this route.

Avoid giving actual money for referrals.

By paying someone cash for referring your product, you are turning them into an affiliate marketer. It's a way to increase growth, but that is a marketing strategy and not a K Factor improvement strategy.

By giving direct cash, you are also creating an equation in your customer's head that says: "If I do this amount of work, then I'm generating this amount of money..." which inevitably results in an hourly rate calculation in their minds, that they will ultimately decide is not worth it.

Instead, you want to help them improve their own standing by helping other people.

You can give indirect cash.  As mentioned previously, Uber and Lyft do this very well: by sharing their app, you give someone a free ride, which has a cash-equivalent value.

This is an indirect form of payment which translates to a "free ride", not as "free cash."

Even better is to provide a referral bonus that is not about cash at all.

Dropbox does this very well - giving you extra space in exchange for a successful referral. There is no cash value in this case, rather a relative value to what you already have. For example:

"Get 20% more storage by sharing with a friend."

Even though to Dropbox the actual value of this might be about one cent per year, the perceived value to the customer is high.

Additionally, great referral bonuses are not focused on bringing you customers. The focus of the bonus is on helping the referrer and the referee.

The examples above - Uber, Lyft, Dropbox - are all great demonstrations of referral bonuses that:

1. get people talking about the product
2. help the customer get more of what they need to solve their problem and
3. help the referee to solve a problem they have as well

Personally, I love telling people about Uber whenever I'm asked to drive someone to the airport: it saves me time and stress because I don't have to drive them; it gets them a free ride there, and I get a bonus too! Win, win, win.

Also, the idea that I am "helping" Uber to get more customers never enters my mind. But I'm sure it does theirs!

When your focus is helping your customers, you will win.

Finally, everyone gets bonuses.  If only the referrer gets a bonus, they end up feeling like a sleazy salesman; if only the referee gets a bonus, there's not much motivation to share. Everyone - because they are all your customers - must benefit for referral bonuses to have maximum effect.

Which One Should You Test?

Now that you have all of these ideas for improving your K factor, which should you test?

Of course, you'll want to test one at a time which means you'll need to prioritize them. To do that, you'll want to estimate which Offer will create the highest positive Emotional Delta.

On your worksheet, you left several fields blank that you'll now fill in with some Emotional Delta estimates.

In these spaces, you'll write in a number between 1 and 5 to indicate how much Emotional Delta you hypothesize each sharing opportunity will create.

To do that, it can be helpful to look back at the Utility Testing Feature List exercise, where you listed the emotions you wanted to help your customers move from and to.

For me, my Emotional Delta is going to be the measure of how likely I am to take my customers from the negative emotion of Overwhelmed to the positive emotion of Pride.

For example, in the first prompt, "How's Your Focus?", I imagine this prompt may be useful but not necessarily improve my customer's positive feelings: it is not likely to give them much "pride", so I will give this a 2.

For my second prompt, I'm guessing this one would be even less successful in increasing my customers' pride. I'll give it a 1.

Now, in Step 3, I'm using the opportunity presented when they complete a book, which is a significant achievement. This is a good reason to be proud. I'll give it a 4!

Go through and score each one of your own.

When you're done, pick the idea that has the best chance at creating a high positive Emotional Delta, and that is the first sharing opportunity you should test to increase your Viral Coefficient!

In my case, I'll leverage the "Better Interactions" scenario and modify the Declaring Victory exercise to encourage founders to collaborate with their co-founders to develop a team-wide Victory.

What's Next

There you have it! Those are the steps to increasing your K factor/Viral Coefficient.

You now know how to create better sharing Prompts and Offers to increase your K.

The #1 way to increase your K is to help someone solve their problem better.

It's important to remember that your Prompts and Offers are not predicated on getting more customers for you: they are based on improving the experience for your customer, which in turn will improve your product and increase your K.

Congratulations! It's time to celebrate! Share your success with your friends :)

Next, you will learn how to know when you're done with Utility Testing and ready to move on to Scaling.