Today is Wednesday. That means it’s time for an inspiring growth hacking example.
Here’s what you can expect:
Grab yourself a cup of coffee and get comfortable. Here we go!
A – About the company
This week’s growth hacking case study is about one of the most famous online startups in the world. I’m sure you know it. Dropbox.
Dropbox is a file-storing platform that allows users to store and share files. Some key facts:
→ Dropbox initially spent $388 on advertising to sell a $99 product. Fail.
→ Now Dropbox is worth over $10 billion. Yet, they don’t spend a lot of money on advertising anymore.
→ Every day, 1 billion files are saved on Dropbox
B – The challenge
When Dropbox launched its product, it tried paid advertising.
Their first campaign cost them $1,164,33 and got them 706 clicks. Yet only 3 people signed up.
That’s $388 to acquire one paying customer. Considering that Dropbox was $99 at the time, they were losing a lot of money on every sale.
That’s why Dropbox needed to figure something out. They needed to find another way to acquire new customers.
C – The growth hack
Instead of using paid advertising to target a cold audience, Dropbox decided to switch gears.
Instead of promoting Dropbox themselves, they offered a reward to their customers to do so.
They offered their customers 500 MB extra storage for every friend they invite to the platform.
This strategy is pretty much free. Sure, Dropbox still needed to pay for the hosting, but these costs are negligible.
Using your current customers has an additional benefit over traditional advertising. Friend referrals instill more trust than an advertisement ever could.
Dropbox has been leveraging this strategy ever since and is growing every day.
D – How to implement it yourself
So how can you implement this referral program yourself? There are a couple of ways:
→ Use free referral software
I’m a big fan of Viral Loops. It’s a tool you can use for free to give rewards to your customers if they perform specific actions.
→ Create personalized landing pages
If you’re comfortable with adding new pages to your website, you could create unique pages for your most loyal customers. For example, every time somebody purchases your product after landing at yourwebsite.com/mark, Mark will receive a reward from you.
→ Create personalized coupon codes
You could do the same with coupon codes. Simply create a unique coupon code for your customers, and track how many people use them. Has the coupon code ‘mark2021’ been used 3 times? You know Mark deserves 3 rewards!
E – Growth hacking tool of the week
Now usually I would recommend a powerful growth hacking tool in this part of the email. However, I felt in this email I already talked about referral software you probably want to explore.
Is your website ready for explosive growth? Or does your website make your visitors feel like it’s 1990? If so, get in touch with our web design team. They can help you out!
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