This is the 3rd addition to the “How the hell did they pull this” series- it’s not official, I like to name things.
In the past we wrote about:
- How the Hustle’s milestone referral program earned them 300k fanatics.
- How Harry’s gathered 100K emails in a single week with a milestone referral program.
- How a small cosmetics brand got 4K+, and a few thousand in sales in 5 days.
It’s already a cliche to try to convince you if referral marketing works or not (of course they do) and why, so instead, this article is solely focused on the how.
Numbers are important
Dropbox’s referral program is possibly one of the most famous cases of referral marketing.
Almost a decade later, it’s still used in numerous case studies showcasing how referral programs can contribute to a company’s growth engine- or even be the engine itself.
Let’s have a quick dive into Dropbox’s metric history:
- September 2008: 100K registered users
- December 2009: 4M registered users
- September 2017: 33.9M registered users, 10B evaluation + 1B revenue.
What happened between 2008 and 2010? Well, Dropbox managed to double its user base every three months, resulting in its users sending 2.8M invites in April 2010.
People, we’re talking about a 3900% growth in 15 months!
Somebody was kind enough to upload a presentation of Drew Houston (Cofounder & CEO, Dropbox), on how they used the lean startup approach to grow Dropbox.
OK, enough with numbers. Let’s get straight to the chase: how did they do it?
It’s not all due to the referral program; they gathered a ton of feedback, they continuously improved their product and they kind of put a battle for VC’s to trust their money to them.
Since I’m not the best dude to talk about business development, I’ll have to put this aside and try to explain the factors that set this referral to the pantheon.
How the Dropbox’s referral program functioned
The philosophy of Dropbox’s referral program was very understandable. Since the product offered storage space in the cloud, they decided to reward people with more free space not only for referring to their friends but also for accepting an invitation.
In order words, we’re talking about a 2-side referral program for a compelling product, that rewarded both sides for completing the desired task; registering for Dropbox.
The details that made a champion
It was part of the onboarding process
Onboarding users can be such a pain. When people go on to start using a software or a service, they expect they’ll have to fill out some details.
I don’t know about you, but when the onboarding process of a product I’m dying to use is easy, a smile carves my face.
Dropbox knew this and not only made the whole onboarding a six-step piece of cake, but Dropbox integrated their referral program in it, as a final step.
Just like saying ‘thank you’ by offering more of the product.
People had a clear view of the benefits
According to Dropbox’s founder/CEO Drew Houston, Dropbox’s referral program got inspired by Paypal refer-a-friend program.
Paypal rewarded referrals with cash (as this is what their business was about), so Dropbox had to use their product’s primary value in their rewarding system.
When someone decides to use a product, they exactly know what they want from it (whether they get what they expected or not is another story). In Dropbox’s case, people wanted cloud storage; the more, the better.
I get always asked what one of the top 5 skills in marketing is. I’ll be damned if copywriting is not one of them because context beats content.
That’s why instead of ‘Invite your friends’, Dropbox framed the referral program as ‘Get more space’.
The ridiculously easy invitation process
After the user got hooked with ‘getting more space’, the next step was to make it as easy as possible to get it. It was clear that they had to bring their friends on board.
They could do so via social media sharing or by just sending their unique referral link in whatever way they wanted (messenger apps, email, SMS, handwritten cards, etc.)
But here lies one of the best invitation hacks I’ve ever witnessed. Email is powerful, but sending your invitations to your contacts one by one isn’t so, Dropbox offered the option to sync your contacts from Gmail, AOL, Yahoo!, etc.
People knew their referral status
If you’re planning to create a referral program like Dropbox, listen to me, and listen to me good. You want to push users to make enough referrals to attain a prized goal.
How do you do it?
The easiest way is to make it visible to them how close they are to attaining this goal. I see this in a lot of referral campaigns; I complete the steps, invite my friends and then…Nothing!
No notifications or no email, informing how many of my friends successfully registered from my referral link. This is a colossal mistake, people!
Dropbox included a panel that was accessible anytime by users, so they can see how the invites performed.
A Viral Loop on steroids
I became a member of Dropbox from a referral (what a surprise, huh?). I received an email from a friend, signed up, and then I received another email informing me that I was given 500mb for accepting my friend’s invitation.
“Sweet”, I thought. In the very same email, there was a P.S.; ‘To get even more space, invite your friends or upgrade your Dropbox’, with two links placed respectively.
Dropbox grabbed the opportunity in my WOW moment and offered me additional value by prompting me to get more without paying a dime. The goal of Dropbox’s referral program was to attain a more significant audience reach, not a boost in their revenue.
It was a chance to open their funnel in a very cost-effective way by just showcasing their will to offer more for less.
Let’s recap all the essential info from the Dropbox story. First, they managed to attain 3900% user growth in 15 months. They did so, by continually improving the product, coming head to head with VCs, and by building a legendary referral program
Dropbox’s referral program had 2-side rewards and was an overall success because:
- Offered an extended version of the same product.
- It was part of the onboarding process.
- People had a clear view of the benefits.
- It made it ridiculously easy for people to invite their friends.
- People knew their referral status at any given time.
- They managed to build a Viral Loop.
There you have it! Now, I’m going to step back and think what the next addition to the ‘How the hell did they pull this’ series (the name remains fictional, but I’ll fight for it).
In case you’re interested in building a Dropbox-style referral program, we have your back! Save yourself some time.