In his book, The Lean Startup, Eric Ries introduces 3 main models of user and customer growth for any business: PAID, VIRAL, and STICKY.
These strategies are not independent and can be applied in parallel. However, it’s important to identify your primary growth engine, as it will yield the best ROI and produce results more quickly. Also, you don’t need to attempt everything simultaneously.
Here is a table with explanations and examples for each:
| Growth Engine | Explanation and Examples |
|---|---|
| PAID | A form of push marketing. Interruptive, designed to get prospects to notice you. Works well if prospects easily understand the inherent value of your solution without needing to experience it first. |
| Most common in the form of advertisements. Product placement in movies and booths at trade shows also falls under Paid. | |
| VIRAL | VIRAL isn’t about content that gets distributed widely. VIRAL is primarily a reference to how something gets spread from person to person, like a virus. And like viruses, Eric mentions, the spread is not optional. Suitable if your solution needs to be experienced firsthand in order to understand its value, is in a competitive market, and it’s hard to communicate how you’re different, or is something that prospects aren’t aware of. |
| Consultants, coaches, agencies, and education programs most commonly fall under this category. Other examples include: a new flavor of wine, a life-changing personal development program, a level of service that exceeds expectations, doing the same thing but with better quality, a new technology, or a novel/innovative/better way of solving a traditional problem. | |
| STICKY | Growth through retention and increased word of mouth (WoM). Solutions that generate recurring revenue benefit the most from focusing on this engine. |
| Examples include memberships (gym), subscriptions (Netflix), refillable products a.k.a sunk money consumables (Brita replacement water filters), rentals, and products that require servicing (car). |
Growth Engines Summary
It’s important to understand the differences between PAID, VIRAL, and STICKY Engines of Growth because when growth stagnates, most companies default to pushing more money into sales and marketing (PAID ENGINE), which isn’t effective for every type of solution.
And although VIRAL seems identical to WoM, they are distinct. The former involves passive transmission while the latter encourages active sharing. The metrics you track and campaigns you create for VIRAL vs. WoM are different, utilizing varying resources and approaches. In addition to WoM, the STICKY ENGINE includes other elements such as negative churn and retention strategies, which are relevant primarily to businesses with recurring revenue.
As Eric says in his book, it’s possible to implement multiple Engines of Growth simultaneously; however, it’s beneficial (especially for newer companies) to focus on the one that best applies to your business.
| If you | Engine of Growth | Initiatives |
|---|---|---|
| • Have a product • or a service that is unique and easily describable/visual. | PAID | • Traditional marketing • Visual ads |
| • Are in a relatively competitive market, have a unique and hard-to-understand solution, • or require people to experience your offering firsthand before they recognize its value. | VIRAL | • Explore SOCIAL CURRENCY, EMOTION, PUBLIC, and PRACTICAL VALUE from STEPPS. • Is there an inherent network effect to leverage for your platform? • How can you give prospects a sample of the experience? • Is there an element of status or sense of identity that you can speak to? |
| Your offering generates recurring revenue | STICKY | Improve WoM: • Proactive solicitation • Sharing stories • Partnerships Improve retention: • Brand identity • Community • Integrate Other: • Polish your solution & customer experience. • Explore relevant value-add upsells and cross-sells. |