Intercom’s Viral Growth, LTV Expansion and Network Effects 

From the Reforge Alumni Weekly

Recently, Intercom shared some of its numbers in a company blog post, revealing that it’s one of the fastest growing SaaS co’s of the past few years (growing from $1 to $50M ARR within 3 years).

Intercom says they currently have 100,000 monthly active users, ranging from startups to small businesses to mid-sized and larger tech companies. Those 100K MAU make up the 17,000 companies that are paying for Intercom.

Most are using more than 1 of its 4 total products:

  • Acquire, live chat that leads to email capture
  • Engage, in-app messaging and event-based emails for onboarding and retention
  • Educate, a knowledge base product where companies and their customers can create their own help content
  • Resolve, a helpdesk and ticketing system

Intercom's Viral Loops

Intercom presents a good example of the casual contact viral loop in action across each of their products. 

1. Intercom link in the knowledge base articles created via their “Educate” product

Intercom customer (example, creates a knowledge base article using Intercom Educate => Users of visit knowledge base article => CTR on Intercom branding and link => Some percentage of clickthroughs become a new trial user of Intercom Educate

2. Intercom logo and link in a chat window of their Acquire product

Intercom customer (example, sets up livechat using Intercom Acquire => users of SixCycle engage with on site live chat => CTR on Intercom branding => Some percentage of clickthroughs become a new trial user of Intercom Acquire

3. Intercom reply-to address in lifecycle emails and messaging

Intercom customer (example, Buzzsumo) sends an onboarding email to their customers with “Hit reply to let us know!” as its CTA => Reply-to address is [email protected] => Some percentage of Buzzsumo subscribers navigate to Intercom and start a free trial

4. Intercom reply-to address in support tickets

Intercom customer answers a support ticket with their customers => Reply-to address contains Intercom domain => Some percentage of support ticket creators navigate to Intercom and start a free trial

Each of these loops seems small — and probably is — but contributes important incremental growth via (non-paid) casual contact. 

Mixpanel is another company that leans on the casual contact viral loop for growth. Can you think of others? Have you yourself become a trial user (or a customer) from the casual contact viral loop?

Related Lecture: Different Types of Viral Loops  

Intercom's LTV Expansion

As they wide the top of their funnel, Intercom has also expanded LTV by adding additional, high lock-in products.

Intercom Educate increases buy-in from customers not only by offering another product they can buy, but also because those customers (and their customers) create content for the Educate knowledge base. 

Content creation increases investment into the Educate product — your company has now “personalized” its version of the Educate platform, and that makes it that much harder to quit.

In addition to hanging on to customers for more billing cycles, another way to increase LTV is to simply sell your existing customers more stuff. By bundling more products that complement each other and integrate to the same customer database, Intercom is able to simultaneously increase lock-in and per-transaction value. 

They’re now hinting at expanding LTV further by building more features for larger companies (scale as their customers scale), so that the customer-facing life of your business can live on Intercom.

We’ve discussed previously how difficult it can be to scale downward from enterprise-level pricing and complexity, but somewhat more feasible to move from SMB upward (we’re now seeing this in Slack, Mailchimp and others).

Network Effects in SaaS

A final point worth noting is the company’s expansion of its APIs to build out its ecosystem of integrations and apps.

If successful, this could increase network effects to acquire new customers and further drive lock-in with existing customers.

Other Growth Reads

2017 Mobile Growth Stack by Andy Carvell

The Real Value of PR for Startups by Casey Winters

Funnel Hacking: More Crucial than Growth Hacking by Audrey Melnik