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6 Growth Loop Examples You Can Learn From

6 Growth Loop Examples You Can Learn From

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What is a growth loop?

A growth loop is a system that brings in new users or customers each time an existing one takes a particular action.

Every business wants to grow their audience, sales, and revenue. There are a lot of different ways that you can do that, most of which involve marketing strategies like search engine optimization (SEO) and paid advertising. But a method you might not have heard as much about is a growth loop.

Growth loops are becoming more and more popular, so it’s probably a good idea to see if there’s a way to harness them for your business. The basic idea is to create a system that will keep new customers coming in even without direct action on your part.

Below, we’ll define growth loops in more detail and explain why they matter. After that, we’ll go over six different examples of growth loops used by real businesses. Keep reading to learn more, and then subscribe to Revenue Weekly — our email newsletter — to learn about more ways to increase sales!

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What is a business growth loop?

A growth loop is a business system where users or customers take actions that directly bring in other users or customers. Those actions could consist of any number of things, as we’ll see from the examples in a moment. But the idea is that they bring in new customers without any direct action by the business.

What is the benefit of a growth loop?

The reason for using a business growth loop is that it’s an effective way to bring in new customers and revenue without as much work on your part.

Of course, you still have to do the work of setting up the loop in the first place. And even once it’s up and running, you can’t sit back and let it do all the work — you still need to run marketing and advertising campaigns alongside it. Having a growth loop doesn’t exempt you from needing to market your business.

That said, growth loops are great for building on your existing marketing efforts and bringing in more customers without requiring too much extra money or energy from you.

6 real-life examples of growth loops

We’ve established the definition of a growth loop, but it can be hard to understand what that means without concrete examples. That’s why we’ll be going over six different real-world examples of businesses that use growth loops to bring in new users and customers:

  1. LinkedIn
  2. Dropbox
  3. Louis Vuitton
  4. Venmo
  5. Loom
  6. Yelp

Keep reading to find out about each one.

1. LinkedIn

Probably one of the most well-known examples of growth loops comes from LinkedIn. If you’ve used LinkedIn before, you may know what I’m referring to.

When you create a new LinkedIn account, the platform will offer to sync with your list of email contacts so that you can find and connect with all of them on the site. For any contacts not on LinkedIn, it will give you the option of inviting them to join the platform.

That means that when new users join the site, they commonly end up inviting others to join as well. Then those users do the same thing, and so on.

2. Dropbox

Another great example growth loop comes from Dropbox. Dropbox uses a referral program, where it encourages people to refer their friends to the service. To incentivize referrals, it gives users more storage space for referrals they bring in.

This system is perfect for drawing in a steady flow of new customers automatically. An existing user will refer a friend, who will then refer friends of their own, and so on. Users benefit from the upgraded storage space, and Dropbox benefits from getting more business.

3. Louis Vuitton

Louis Vuitton, the famous luxury brand, uses yet another type of growth loop. When people buy this brand, they’re buying it as much for the name as for the actual products. There’s a certain prestige associated with having a Louis Vuitton product. For that reason, the company features their logo prominently on everything they sell.

As a result, every product Louis Vuitton sells is a source of free advertising. Louis Vuitton customers walk around displaying the company logo everywhere they go — not unwittingly, but with deliberate intent to show it off. This free advertising inevitably brings in more customers over time.

4. Venmo

If you’re not familiar with Venmo, it’s a money transaction app owned by PayPal. It’s a handy alternative to giving someone cash or writing them a check. Here’s the catch, though — you can only send someone money on Venmo if both of you have the app. That system means that in order to use the app, you need other people in your life to use it, too.

The result is that people commonly encourage their friends to download the app and create an account so that they can transfer money between them. It’s a great strategy on Venmo’s part to draw in lots of new users with minimal effort.

5. Loom

Loom provides one of the simplest growth loop examples on this list. It’s not as complex as the others listed here, but it still works.

Basically, Loom is a service that lets you easily record videos on your computer and then share them with others via a link. It’s a great way to communicate information best explained visually or audibly. So, how is this a business growth loop?

Loom is the perfect example of product-led marketing. Someone sends someone a Loom video, and the recipient gets to experience Loom’s product firsthand. Seeing how useful Loom is, they might then go create an account themselves so that they can do the same thing.

6. Yelp

Our last example growth loop comes from Yelp. You’ve probably heard of Yelp, which is a website where people can leave reviews of local businesses. Yelp’s growth loop was crucial to it becoming as big as it did.

It started out small, but as more customers left business reviews, those reviews started to take on more and more weight. When that happened, businesses started recognizing the impact of those reviews, so they started encouraging customers to leave positive reviews.

The encouragement worked, and even more people started leaving Yelp reviews. That made even more businesses encourage people to use the site, and so on. Yelp just kept getting bigger and bigger due to the positive feedback loop between customers and businesses on the site.

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Our digital marketing services are ideal for promoting your company online and driving new customers to your site. Interested in partnering with us? Just give us a call at 888-601-5359 or contact us online today to get started!

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