Viral Coefficient
Viral Coefficient
Loyalty
The number of new customers that each existing customer generates through referrals. A coefficient above 1 indicates viral growth.
What is Viral Coefficient?
Viral coefficient (K-factor) measures how many new customers each existing customer brings in. It determines if your referral program drives exponential growth.
Viral coefficient formula:
K = Invitations Sent × Conversion Rate
Interpreting viral coefficient:
- K < 1: Growth is declining (need paid acquisition)
- K = 1: Growth is stable
- K > 1: Viral growth (exponential)
Improving viral coefficient:
- Increase referral rate (more customers refer)
- Increase conversion rate (more friends convert)
- Improve incentive attractiveness
- Reduce friction in sharing
- Target high-referring segments
Example:
If each customer invites 5 friends and 20% convert, K = 5 × 0.2 = 1.0
Formula
K = Number of Invites per Customer × Conversion Rate of Invites
Example
If customers send 10 invites and 15% convert, K = 10 × 0.15 = 1.5 (viral growth).
Why Viral Coefficient Matters
A viral coefficient above 1 means you can grow without proportionally increasing marketing spend.
Explore More Terms
Browse our complete glossary of e-commerce and subscription terms.
