Referral marketing is our thing.
We’re always on the look for amazing campaigns that we feel like they change the game for business.
Recently, a colleague sent me a case study about how Morning Brew’s referral program built an audience of 1.5 million subscribers.
We got even more fascinated when we realized that Morning Brew used the Milestone Referral approach to build their program.
We decided that we had to contact Tyler Denk- the mastermind behind Morning Brew’s referral program and interview him to get a deeper insight into what made this campaign a success.
I’m thinking to live stream the next interview on Facebook. If you like the idea, let us know in the comments.
Let’s do it!
Who’s Tyler and how he got involved with Morning Brew.
In college, I started my own company with a few buddies called Venture Storm. Basically that’s what allowed me to teach myself computer programming.
After graduating college, I was doing some freelance opportunities so we kind of shut down that company. And I actually know the co-founder of Morning Brew from my hometown in Baltimore and he was like, “Before you start your other full-time job in the fall, do you just want to work and do some freelancing opportunities for Morning Brew?”
At the time, they didn’t have a developer, anyone tech-wise in house.
So I started off by building these different social sharing links in the newsletter so you could share a story on Facebook or Twitter and then I built out the website, started to look at the referral program a little bit, and after working for three to four months, he was like, “Do you just want to join Morning Brew?”
And I was just going to work at Deloitte, like a big consulting firm, and I was like, “Yeah. I obviously don’t want to work at a big consulting firm.”
So I joined Morning Brew in 2017 as the only engineer on the team with the focus in growth.
The way I’d few most of my product development is growth-based product development. So anything … B-being the only engineer, we get … we weren’t just building cool features for the heck of it, it was more of if we saw an opportunity to grow, whether it’s the referral program, or sharing content, or building out the website or partnerships with these like third party platforms, I would only build things on the tech side that would help us grow. And a big portion of that became the referral marketing program.
We didn’t do any paid advertising until early 2018, so the first I’d say seven to eight months was solely just … we had a daily newsletter at six AM every morning about 100,000 people, how can we get as many of those people to share the newsletter with other people for free?
So that was really like the big problem that we’ve started with. And obviously, as we’ve started to grow and make more money, we ended up putting a lot of our revenue and profits into paid acquisition, which now we have like a pretty large paid acquisition budget.
But it … I think what helped us a lot was the fact that we didn’t have that paid acquisition budget at the beginning, so it forced us to be able to have this organic growth driver in the referral marketing program and really optimize that before we really focused on, you know, Facebook, Instagram, Google and everything else.
That’s kind of like my background. I guess a little bit more specifically, I was the only person on engineering and growth for the first I’d say 18 months when I joined.
We since joined … have now two people in growth and another developer on the team. So I’m kind of … I’m still involved in all of the growth meetings and initiatives, but I’m most … more of my focus is on the product side now, so the tech, the roadmap of where we’re going from here, we’re gonna launch a podcast soon we have a bunch of internal to-tools for our team, so our content team has a custom-built CMS that we created.
We have custom tools for the sales team and everything else. So a lot of the product that I’m building is both internally and externally for the consumer. And still a lot of growth dependencies, but that’s kind of like where I started and kinda where I am now.
Morning Brew uses an in-house solution for referrals. Does it work?
I’ve always been a fan of using in house solutions just because we can tweak whatever we want.
We obviously outsource and use third-party tools, so at least for the referral marketing program– which isn’t like that heavy in tech, we wanted something that we could tweak.
Even last night, or this week, if you see in the newsletter we have a back to school promotion where we’re donating a dollar for every referral that comes in this week for this nonprofit charity.
Last night at like 11 o’clock, I change all the referral links to now have back to school in them rather than our normal referring page.
So if you click on the share page at any time this week, you’re actually landing on a different page, the things that you see are different, the landing page that people are taken to is different for the referrals.
And that’s like a very quick tweak that took me 20, 30 minutes last night where if we had to go through a third party, I don’t know if it’d be possible, it might have to be a feature request, you might have to go through support.
In general, if I can build something or have a team in house build something, I’d prefer to own the entire tech stack and make the tweaks as necessary versus relying on some sort of third party tool.
Sharing Morning Brew’s stories for referrals.
There are usually five or six stories in the newsletter. Each one of those you can share on Twitter, LinkedIn, email, or Facebook, and that’s just like as simple as sharing a story, a piece of content with your audience.
Then we have the share section towards the bottom of the newsletter, which is not a specific piece of content but it’s sharing the newsletter as a whole.
We have like prefixed messages in there like “I read Morning Brew every day. It’s a quick, email newsletter with the top business stories. You can sign up here for free.”
We’ve tested a bunch of different messaging–we continue to tweak that.
We’ve actually been having discussions about if it should also count as a referral credit when someone shares a story and someone else signs up on that page.
I’m in the camp of like I think it should be a referral cause you shared a story and that person signed up. Other people in the team don’t think it should be the case, so we’re kind of hashing that out right now.
Why referral marketing?
I think the biggest incentive was that we saw that people were sharing it anyway before we had an official program.
When we did surveys or market research, people just hit ‘reply’ all the time and just dropped their thoughts.
It’s usually a lot of crazy people and what they think about the stories, but it’s also a lot of people saying like, “Hey, my friend told me about this newsletter. I’m so glad I signed up.
Once we saw a lot of people responding in that, “Hey, my friend,” or, “My teacher,” or, “My colleague, sent me this newsletter”.
It became pretty apparent that the way that we were growing was people enjoying it and just sharing it with other people organically.
So that kinda built the philosophy of if people, out of the goodness of their heart, they enjoy the content and they’re sharing it, what would happen if we also incentivize them with rewards that kind of super-charge this referral marketing process?
That’s where that started, and we’ve tested a bunch of different types of swag, we’re constantly kind of working through that. But like as I mentioned in the case study, the biggest thing is just getting from zero to one (referrals).
It’s really just like a behavioral thing in terms of some people love certain products but they’re never gonna share a link with someone else.
How can we get as many people as possible to see how easy it is to share and it not be like a spammy type thing. If we can just build that behavior into the product and into our audience, it becomes a lot easier to incentivize everything else downstream.
Rule #1: Make your product valuable. But how do you know it’s valuable.
I don’t know if it’s super quantifiable–it might be more qualitative in terms of, like for the example I just gave, people would email in all the time, like, “I can’t start my day without reading your newsletter.”
If you get a certain threshold of those comments, you kind of pick up on this is actually a valuable product through the audience that we’re targeting.
I wouldn’t replicate the exact referral marketing program on top of a shitty product to make up for the lack of the product being quality.
That’s a pretty good indicator that there’s some value there before trying to like game-ify and you know make your product the most viral referral product loop possible.
I’m sure I could create the referral and make it just as good in terms of mechanics, but that doesn’t mean I could just put this on top of me writing a newsletter once a week that’s like really not quality and expect the growth to take off.
Why Morning Brew chooses the Milestone referral approach.
We saw a very wide range of people sharing. A lot of people just have one referral because it’s super easy and they tell their spouse or their best friend. We’ve also seen people have over 1,000 referrals.
We have people who are all over the spectrum and kind of pushing them along to the next milestone has worked extremely well for us.
That’s kind of the thought process behind some of the rewards of the milestones.
e.g. Light Roast– our premium newsletter needs three referrals.
Basically the whole thing is how can you get people from zero to one. Three is low enough that it seems very achievable for you to turn around in your office and find three coworkers, it’s very easy to do.
If you’re our core-demographic and you enjoyed reading our newsletter six days a week, giving you the option to read exclusive content in exchange for three referrals is a very good incentive for you.
And then to take it one step further, from an ROI perspective on our end, it doesn’t cost any more money to ship that product cause it’s an email.
Right now we have about 75,000 people at three referrals, they get additional content and it doesn’t cost us anything.
75,000 times three, I mean, it’s not an insignificant amount of referrals that we’ve gotten from just that.
At five referrals we have stickers, which are like one of the cheapest rewards that you can possibly give out. I’ve never been a fan of stickers but apparently a lot of people are.
I always thought that it was kind of a dumb reward, but people really like it, and they’re so cheap.
I did the breakdown on the cost, I think they’re like between five and 20 cents per sticker. It’s very cheap to ship them.
And then the next reward.
If you’re already entrenched in this community, you obviously like the content, you’ve got stickers, you’re very involved with the Brew, we give you access on this Morning Brew insider group at ten referrals- which is like an exclusive community.
And so at ten referrals, the only thing we’ve shipped and paid for is stickers, yet we’ve kind of hit three different pillars of content, which as a media company it’s really important to us.
Beyond that, we’re constantly tweaking the other rewards.
The most sought after is probably the coffee mug, because our name, Morning Brew, and coffee, goes hand in hand. And a lot of people get to that 50 referrals tier.
But our focus is to get people first from zero to one and then from one to ten.
Once you get to ten, once you’re surrounded by this community, getting notifications from other people in the community, which is honestly more of a constant reminder, like, “Oh, yeah. Morning Brew’s great.
That’s kind of our big goal, from zero to one and then from one to ten.
Deciding how people are going to share about the referral campaign.
There wasn’t too much thought put into it. It was really just every social media channel that makes sense like some people are very active on LinkedIn, where other people have a big audience on Twitter. Some people love Facebook.
Providing all of those it made sense. Sending email invites was also directly in line, and those are one of our highest quality subscribers because if you send an invite via email, the person who accepts it obviously checks their email, they’re in their inbox frequently.
It’s more of a double opt-in,–there are more steps for the email. So it actually makes a lot more sense than they’re higher quality.
We’ve moved email above social share. Email rules are a little bit more of like you have to know people’s email, you have to import your contact list. For this option we use CloudSponge.
I don’t think people are super actionable on Twitter. How many people actually have that large of an audience?
I think when you’re on Twitter as a user, you’re just scrolling kind of aimlessly. For you to see something, click on it, sign up, is a lot.
I think a majority of people probably have under 500 followers, so these people who might have 27 followers think that they’re gonna like grow their referral network by hitting ‘share on Twitter’ where actually they’re not really sharing with anyone.
So that’s why we’ve kind of moved social sharing down. I think a lot of the social networks are being a little bit more saturated where like the one–to–one connection with email works a lot better.
But then the other thing is like we’ve seen SMS and WhatsApp work really well.
I just think the one–to–one relationship makes a lot more sense where if you receive a text message from a friend recommending something, you don’t know that they also sent it to ten other people.
I think like the social stigma of like wanting to respond to that and at least acknowledge it, is pretty high. The data just shows that those convert a lot better than Facebook, Twitter, or LinkedIn.
Making the referral visible.
Because with our referral marketing program, the share section is kind of towards the bottom of the newsletter, so some people just don’t read the entire newsletter on a day to day basis. Others may just get once they get the last story they may consider at the end of the newsletter so they don’t read all the extra stuff at the bottom.
So educating subscribers for the referral is a big thing. We try to add it at the very top of the newsletter every few weeks just to draw attention to it. I wouldn’t be surprised after a week or two of being a subscriber if you didn’t know that there was a referral program.
That’s obviously our fault, we need to do a better job of doing that, of relaying that information.
But at least when subscribers go from zero to one, they are fully aware that there is a referral link and some sort of referral and rewards program where if they share, it will add credit.
They’ve gotten some gratification from the email alerts. That’s why the zero to one is-is by far the biggest thing.
Morning Brew’s referral funnel.
Our main point of contact with all of our readers is the daily newsletter.
So that’s kind of where it starts and ends for some people, but we provide through our share section the ability to escalate to a page dedicated to sharing the newsletter with other people.
If we can get people to the referral page, or what we call like the referral hub, it provides all the information of every single reward that you can get. It shows all the different mechanisms in which you can share, so social share, email, copy and paste, it shows your network of who you’ve already invited and who’s still pending confirmation and it shows your updated referral count and how many referrals away you are from your next reward.
Within an email, you’re restricted by space and functionality.
That’s how I view the first two stages of the funnel.
It’s newsletter first– we try to educate you there, and then we try to get you to our referral page.
Once you get to the referral page, you can choose how you want to share the newsletter. The final step of the funnel is the landing page that the person you referred gets to. So it’s kind of like a multi-user funnel.
We’ve just done a lot of testing on our landing pages of different language, different colors, different images different calls to action. Just anything we can do to optimize the conversion rate knowing that the referral program’s a massive driver of growth for us.
So if we can increase one to two percent on any of our pages, it just increases everything downstream.
Referral boosters & reminders.
In the emails, we’re constantly rotating what is being shown.
For example, one day in the newsletter it might say, “You have seven referrals. You’re three away from the Insider.” But knowing that not everyone’s the next day it’ll say, “You’re at seven referrals. Only eight away from a phone wallet.”
We’re cycling through our different rewards that you haven’t yet got, to incentivize you.
After a week of you signing up, we send a transactional email saying, “I hope you’ve been enjoying Morning Brew. It looks like you’ve been reading a lot. Would you be interested in our referral? ”
If we send a transactional email just about it, you can’t miss it essentially.
We also run occasional giveaways.
We have a massive amount of new referrals that come in, because who doesn’t want a Mac book or T-shirts or whatever we’re giving away?
But what it also does is to get a lot of people from zero to one referral. Maybe a lot of people don’t care about any of our rewards at all but they would love a Mac book.
And so if we incentivize them with like a new Mac book Pro, they’ll actually use the referral link, they’ll send it to all of their friends, they’ll get like seven referrals.
Even if they don’t win, they now know how easy it is to share the Brew with other people, and we’ve created that behavior and knowledge around how to do it.
So then the next time they’re like, “Oh, I’m only two away from becoming an Insider,” it’s a no-brainer for them. They know how easy it is.
So it’s really just like an additional incentive, and every referral coming from the giveaway adds up to the normal milestones.
How to keep a 40% open rate in a daily newsletter.
We have like a pretty strict email regiment in terms of getting rid of subscribers who aren’t engaged.
If you don’t open in two months, we send a re-engagement email saying, “You haven’t opened in a while. Do you still want our emails?” And if you don’t respond to that, we get rid of you.
So that’s a two-month window in terms of like if you’re not engaging for two months, you’re gone.
Also, if you’ve signed up today and you haven’t opened in three weeks, we’ll say, “Hey, you just signed up. You haven’t opened at all. Do you still want this email?”
And the same thing, if you don’t opt-in, we get rid of you. So those are two different areas where we’re constantly getting rid of users who aren’t engaged. So we only keep the most engaged users on our list, on a day to day basis.
For those that want to launch their own referral program.
Make sure the product is good and people are actually getting value out of it.
As you transition into building a referral program, do the customer discovery and understand what your customer actually wants.
Don’t just choose pens and T-shirts cause they’re cheap and easy, but like for Dropbox for example, if your customers are coming for storage, maybe you should offer them storage.
I think that’s probably a pretty good place to start.