“Today I am your champion, I may have won your hearts. But I know the game, you'll forget my name, and I won't be here in another year, if I don't stay on the charts.” That’s one of the catchy lyrics from Billy Joel’s, The Entertainer, and it doesn’t only apply to musicians. If anything, it applies just as strongly to casual gaming companies. This is why gaming companies are always on a relentless pursuit to achieve, and maintain virality.
We know, we know, virality can’t be guaranteed by following a certain set of rules. One size does NOT fit all. But the chances of getting there increase drastically by putting a good amount of care into certain elements. These elements include focusing on the discoverability of the same itself, wow moments, and social sharing. The general design element is also important, such as storyline, characters, graphics, rewards—but you don’t need us to tell you that. It’s obvious that games should be designed to be appealing enough to sell themselves.
So what else can be done, beyond the basics?
Well, UA managers behind leading gaming brands are beginning to shift their strategies for 2022 and beyond. They are going from funnel-thinking, to growth-loop thinking. Not only is this more rewarding in terms of sustainable growth, but it also targets the best users from the get-go… the ones that will really keep the engines running.
Allow us to explain.
Let me start off by saying that we’re not hating on the funnel approach. When the funnel approach is done right, your most passionate fans will make more in-game purchases over time, thereby increasing their lifetime value. They will also be on the lookout for new game releases from your brand and be the first to subscribe to your content. It’s a pretty sweet deal in theory, but the process is a whole other story. When you consider advancements in UA, plus shifting consumer expectations, the funnel process has become dated.
Putting aside the fact that this approach doesn’t define a clear relationship between how the output of new users is re-invested through certain processes to generate other users—things get complicated when you want to grow faster using a funnel.
This is because it calls for more resources at the top of the funnel: from more people, to money, and of course channels. Also, the fact that you added a new channel or another person wouldn’t necessarily ensure an output that creates compounding growth.
It’s needlessly complicated, and this is definitely one of those cases where less is more.
Unlike the traditional funnel approach, the growth loop is more of a closed system where the input (through a series of steps,) leads to an output that is naturally re-invested as the input of the next cycle of the loop.
Okay, that sounded more complicated than it actually is. Let me walk you through an example of a growth loop.
User invites serve as a great example of this approach, because of its circular nature. I mean, think about it. It starts with a user installing the app, and using it. Once they love it, they will invite a certain number of friends to also install the app and get in on the action. A certain percentage of those users will accept the invite, install the app—and there you have it! Growth loop! The cycle continues!
Then in the next cycle of the loop, two users will be the input to the next cycle, which will create four new installs in the next cycle… etc etc.
This is the type of stuff we geek out over.
There are usually between one to three parties that fall within growth loops: those who receive value; those who generate value; and those who distribute value.
As Simon Sinek says, “Start with why.” Ask yourself why someone should want to perform the next action in a loop. The answer usually lies between one of three types of gain: personal, social, and financial.
The lovely little graphic below explains the differences between each type of gain.
Of course, elements within the growth loop aren’t all cut and dry. There are numerous variables you would need to consider, which directly affect growth loop metrics.
For instance, you would want to know how long it would take for a growth loop to complete a cycle. However, that depends on the speed in which a user would be able to generate value within the game, to the point that they will agree to invite their friends.
On that note, you would also want to know how long it would take for the growth loop to exhaust itself, and this depends on how concentrated the audience is. A group of friends may be quick to invite each other, but how long will it take till they run out of new people to invite? That might run dry in less than a week for some groups, and could be pretty ongoing for the influencer-types, or anyone that runs popular Discord channels.
As far as the backend is concerned, that’s a whole different ball game. It would be ideal for your team to know how much investment is needed to get the growth loop spinning in the first place.
There’s no hocus pocus here. Those initial building blocks depend on the size of the user base at that given point, and your ability to make the invite mechanics as effortless and straightforward as possible. Speaking of being straightforward, you should bear in mind that the user experience and motivation behind inviting new users plays a direct role in how high/low the conversion rates are between steps within each loop.
There are a few different types of virality growth loops that can help motivate your users to refer. For instance, there are loops that revolve around friends assisting one another by joining. There are also value-oriented loops, which offer a perk for the original user, and each friend that joins.
The most efficient virality growth loops are those that have the backing of data, especially data that stems from previous engagements and paid campaigns. That’s because the targets would be the users who engaged with your brand the most, and demonstrate higher LTV. They are the ones that are more inclined to share your app and promote vitality, both in the short and long term.
And that’s where the magic happens. The installs will grow exponentially, your number of engaged users will increase dramatically, and your app store rating will also grow, thereby raising the exposure of your game, and growing your audience of organic installs. That’s what it’s all about!
In a nutshell, it’s important for you and your team to target the cream-of-the-crop users, encourage them to share your app, and make it easy and worthwhile for their friends to join. The latter needs to be done in as few steps as possible.
For best results, you might want to conduct frequent A/B testing on this front. It really shouldn’t be a one-time-thing. For example, maybe different positioning might lead to more invites, or maybe different incentives might be more enticing for your targets.
When done right, you will see significant ROI, considering those users tend to purchase more than "regular installers", even if at a later stage. I’m not pulling this claim out of thin air, it’s actually based on our own findings.
As a gaming marketer, you may also want to build your campaigns around purchases and/or installs and oversee how much value can be gained in optimizing for virality.
As I’m sure you know (or definitely know by now) data is king, and in the case of user acquisition, it can help ensure the success of growth loops.
Predictive based UA requires a small amount in initial investments, and you can use the data to bring in more users like those who will increase your growth and virality. After all, most funnel-minded marketers optimize their UA campaigns either for installs or for purchases. While those are great in their own right—optimizing for social share is a strategy that supports growth. Your CAC would be pretty low, in the realm of the cost you pay for installs, and the value you’ll receive in the long run will tremendously increase.
Using predictive models takes growth loops to the next level, and enables marketers to streamline this strategy, considering there is a higher tendency to late purchase (outside the conversion window)—so there is a second meaningful benefit here—targeting users that demonstrate greater LTV!
All in all, it is worth your while across all fronts to make the big switch, from funnel-thinking, to the growth loop approach, and predictive based UA will help you get there faster and more strategically.
That’s a wrap! If you made it to the end of this post, you are:
Highly deserving of our virality growth loop cheat sheet, which offers up the insights from this post in a more condensed form.