What is Viral Loop?
Definition
A growth mechanism where existing subscribers naturally invite others to join, creating a self-reinforcing cycle of user acquisition.
Understanding Viral Loop
Viral loops are the holy grail of subscription growth. They occur when using the product naturally leads to inviting others. Dropbox's referral program (give/get storage), Zoom meeting invites (non-users experience the product), and Slack workspace invitations are classic examples.
The viral coefficient (K-factor) measures how many new users each existing user brings. A K-factor above 1 means exponential growth. For consumers, viral loops often come with referral bonuses — both you and the person you invite receive benefits like free months, extra storage, or premium feature access.
Related Terms
Product-Led Growth
A business strategy where the product itself drives customer acquisition, retention, and expansion through free tiers and self-serve experiences.
Customer Acquisition Cost
The total cost of sales and marketing efforts required to acquire a new paying subscriber, calculated as total acquisition spend divided by new customers gained.