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Viral Coefficient is the number of new users that can be generated by an existing user in the network. This metric measure the exponential referral cycle - sometimes called virality. Virality is the possibility for current users to refer the product to people in their network
Viral coefficient = C x R x CR / C C = Number of customers R = Average number of referrals per customer CR = Average conversion rate for referrals
A social media app have one 1000 users in their network. Each user will likely refer 10 friends. Out of those 10, 2 sign up. So your conversation rate is: 1000*5*20%/1000=1
So for every new customer join in the network, there will be likely one successful referral
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