The Skimm walked so the Morning Brew could run. Is it your turn to take the baton?
The History
With the launch of the Skimm in 2012, publishers were introduced to a whole new competitor: newsletters-as-a-product. This new editorial product did not have a content-filled website, print products to pull stories from; it was just a newsletter built to be entirely engaged with within the inbox (🤯).
Fast forward 9 years, standalone newsletters like the Skimm and Morning Brew are the industry gold standard in email marketing. They have changed the appetite for how news and information are presented (enter: news with personality) and have introduced marketers to a modern take on an old tactic—referral marketing programs.
The crux of a referral program is simple. Provide the motivation for your audience to share your product with their friends to:
Inform and share content with their friends
Win prizes like swag or discounts
Be an ambassador for your brand
All of the above
Morning Brew's subscriber growth has steadily increased despite an ever-changing digital landscape. With brand trust at an all-time low and living in an age of mis/disinformation, where do consumers go to find the information they trust? They ask their friends.
As brands, the micro-influence of your most loyal readers can increase your subscription base. For example, if 5% of your readers make a referral, how much larger would your list be. What if it was 20%?
Take that small sphere of influence, multiply that by your addressable audience, and incremental numbers turn to exponential numbers.
Getting Started
Stepping back from the inspiring pep talk above, let’s ensure your brand is ready to take on a referral program by asking yourself these questions:
Does your newsletter regularly receive a CTR of 15% or above?
Is your newsletter designed with engagement in mind?
Is the newsletter staffed and curated well?
Does your newsletter regularly receive positive feedback?
Are you able to monetize growth to your newsletter?
Is your newsletter providing real value to your audience?
A good newsletter growth strategy is centered around the idea that you have a good newsletter! Or that you are willing to put in the work to build one. Focusing on improving your newsletter engagement should be your first priority. Any investment in upfront costs will be in vain if your unsub rates are high and share rates are low. So prepare to make it tremendous and postpone until you’re ready.
Determine Value of Growth
There is a cost to running a referral program. However, for a referral program based on a product or membership, the benefits of adding a new product may be obvious:
Price of Membership - Fulfillment Costs = Net Value Per Order
For our clients focusing on newsletter growth, sometimes that value isn’t as obvious. Check out handy chart here on how to calculate the value of an email. Having a number in mind will make the costs more sensible and give your C-Suite a good idea of what adding 5,000 emails could mean to the company's bottom line.
Build Your Budget
The main components of your budget (not including staff or your marketing automation tool) come in three main areas:
Functionality
Incentives
Fulfillment
Let's break them down.
Referral Tool - We scoured the internet looking for an affordable tool to foster a referral program. Finally, we found Sparkloop, a TFD preferred partner and the same tool Morning Brew uses for their referral program. With a tool that integrates with HubSpot and most other major ESPs, and a price tag starting at $99 a month, this option is the best bang for your buck. And keeping costs low on functionality will be important, considering we’ve yet to discuss the most significant investment you’ll need to make...
Incentives - This is where much of the referral budget will go depending on your incentive. Brainstorm ways your audience may be inspired to share your newsletter. Most of the time it takes less effort and reward than you might think. For example, your audience may be motivated by public acknowledgment (i.e., a shoutout in your newsletter section: Ash, Natalie, and Melissa - Thanks for referring us!) Or perhaps, you’ll also want to consider swag like coffee mugs, journals, a new tote bag. Plan on spending anywhere from $5 - $20 per item, which depending on your supplier, may include fulfillment costs, or you’ll need to factor those in separately.
You’ll want to order ahead of time as well. Anticipate a 2 - 4% conversion rate on your existing audience and order accordingly. Pro tip: Stay away from incentives that require sizing like clothing; ordering a minimum in various sizes can add up and kill your budget.
Fulfillment Solution - Getting the reward in the hands of your consumer is the final step. For our magazine clients, you may be able to enlist the help of your fulfillment company, or you can consider a fulfillment partner like Printfection–another TFD preferred partner. Keep in mind, shipping is a challenging space right now, so you may want to make sure your program is stocked with digitally served options as well. Getting your referees their products quickly will be vital in their likelihood to refer you again. Promise a good, and deliver on that ASAP.
We created a referral calculator to help you predict the costs associated with your own referral program, which you can access here.
Marketing Plan
If you have an email platform with automation functionality, this should be relatively simple, with only a few key steps necessary to get started.
Announce It - Let all of your existing newsletter subscribers know about the opportunity to refer a friend and score awesome perks and swag from your brand. Put the ask at the footer of every email newsletter you send that reminds the user about the program (and their current referral count).
Automate It - Automate a referral request email when users have been on the newsletter list for at least 60 days and regularly engage with the content. Experiment with this timing to determine the sweet spot for your audience. Also, consider adding to any of your existing nurture campaigns like your welcome workflow and engaged user campaigns.
Before you iterate on the plan above, measure the performance to understand how your audience responds to your initial reward offerings. If you aren’t getting enough engagement and referrals, you may want to re-evaluate your rewards.
Ready for More?
Join us next week as we demo the SparkLoop tool and show you how easy it will be to integrate this into your marketing strategy. In the meantime, check out the pricing calculator to help you justify the effort and expense to your C-suite. And keep an eye out for running a successful rewards campaign, part two, as we’re just getting started.
Register for the webinar here.