===== How can I model the viral growth engine? =====

  - First, make sure you are modeling your sales using "customer acquisition." To do this, select assumptions/revenues/sales models in the menu. If the top of your screen does not read "Sales Model » Customers by Marketing and Sales Effort," press the blue "Select a New Sales Model" button at the bottom of the screen and then select "BU 3: Use Marketing and Sales to Drive New Customer Acquisition."
  - In the viral growth engine, emphasis is on customers referring other customers. Therefore, you should set the assumptions on this page as follows. In general, to focus on a viral model of growth:

  *   Expense Item or Employee Type: Any sales or marketing expense item or any employee type that drives sales (but make sure you have some dollars allocated to these to get the viral engine started).\\ \\
  *   Customer Acquisition Cost (CAC): Usually can afford to be relatively high because you expect each acquired customer to spawn many other customers.\\ \\
  *   Sales Cycle: Obviously the shorter the better, but like CAC, you might be able to survive with a longer cycle.\\ \\
  *   Average Order Size (AOS): Obviously the higher the better, but your business is likely going to flourish on massive numbers of small transactions. So this will probably be a small number.\\ \\
  *   Periodicity: Most likely monthly, but could be anything.\\ \\
  *   Retention Rate: This could be a secret of your success. Higher the better (but //some//  viral businesses (like open heart surgery), have zero retention rate but high viral coefficiency.\\ \\
  *   Viral Coefficient: This is critical for your business. Must be greater than 1 for viral growth to work without constant influx of new cash.\\ \\
  *   Viral Cycle Length: This is important for your business. Values less than 30 days create incredibly large growth numbers, and are extremely unlikely.

{{keywords>sales model, viral growth engine, lean startup, eric ries}}

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